UK businesses not ready for Brexit
Firms critically exposed by lack of preparations
ONLY 20 per cent of small businesses are prepared for Britain’s departure from the European Union in March, according to consultant Ready For Brexit.
The consultancy, which is staffed by former trade negotiators, said that unlike large multinationals, who have the money, staff and resources to prepare as best they can, the vast majority of Britain’s army of small businesses cannot.
Ready For Brexit chairman Paul Hodges said that the challenges posed by Brexit for small to medium size enterprises (SMEs) is compounded by the lack of clarity and reliable information from the Government. SMEs account for 99 per cent of all private sector enterprises in the UK.
He said that unlike its European counterparts, the Government did not properly engage with business groups at an early enough stage to find out what they need. It has also failed to help businesses in general by not collating all the information people need in a single, easily accessible place.
Hodges said: “Eighty per cent of small businesses are not ready for Brexit and the reason for this is, unlike big businesses which have lots of support, SMEs do not have the resources. People do not know what to do, many are in a state of panic. What they want is knowledge – information – but they are getting it from the Government departments in a random way. It is chaos. There’s no central information source.
“The devolved administrations have been more proactive in trying to address the needs of business, but the guidance people need from Westminster is not there. The trade associations have not really been told anything, but what they have been told makes no sense.
“We are not at all ready for Brexit. People just do not know what will happen and that is the fundamental problem. They cannot just guess, they cannot rely on political promises that everything is going to be fine.”
Over 145,000 British companies officially do business with Europe according to HM Revenue & Customs, but 100,000 more are believed to do so as well.
Another problem for businesses that trade with Europe is that their senior managers and executives generally have little to no experience of dealing with trade tariffs, import and export duties, rules of origin, letters of credit and other international trade requirements, which were required before the single market was established in 1993. Hodges added: “Most people in business now, who came in after 1993, have never had to deal with any of that, no one under 50 has.”
This week the Office for National Statistics is expected to say that deficit reduction is on track. On Friday, it is tipped to say that official borrowing for November came in at £7.7 billion, compared to £8.2 billion a year earlier. On Wednesday, economists believe the ONS will say inflation, as measured by the consumer price index, fell by 0.1 per centage points to 2.3 per cent. The following day, the Bank of England is expected to keep the base rate at 0.75 per cent.