Survey shows small UK firms unprepared for no-deal Brexit

ONLY one in seven small firms have started planning for the UK leaving the EU without a deal in place, while many say they would have to cut staff, a new study finds.

Half of the firms polled by the Federation of Small Businesses (FSB) believe a no-deal Brexit will have a negative effect on them, rising to twothirds among those trading with the EU. One in three smaller firms said they would postpone major business decisions and one in five would cut staff or spending.

The survey of more than 1,200 FSB members showed that smaller businesses are not prepared for a “chaotic no-deal Brexit”, said the report.

In Wales, 42% think a no-deal Brexit will have a negative impact on their business. This is compared to 19% of Welsh businesses who think it will have a positive impact and 31% who think there will be no impact at all.

Ben Francis, FSB Wales policy chair, said: “With the narrative on a no-deal Brexit changing on a daily basis, this makes concerning reading for the business community in Wales. There are 250,000 SMEs in Wales who provide jobs and wages to over 700,000 people and generate £48bn in sales every year. The ability of our SMEs to weather a no-deal Brexit is critical for the onward success of the Welsh economy.

“UK and Welsh governments can help businesses be in the best position possible to prepare for the potential of a no-deal Brexit through organisations such as Business Wales providing guidance and advice to SMEs, and this data also makes clear the need for engagement to be significantly stepped up. With just over six months to go, businesses must be supported to plan for Brexit”

In Wales, 31% of those who felt that they would be affected by Brexit also felt they might postpone major business decisions or innovation as a result, while 24% said they would decrease investment, 26% would cut staff or expenditure, 17% would increase their reserves of working capital or build up a reserves account, and 18% would stockpile inventory.

However, 19% of businesses stated they would seek to grow their domestic business (eg taking advantage of import substitution opportunities), 9% said they would seek to grow exports to non-EU countries and 12% stated they would invest in upskilling themselves and their staff.