CBI: act now to avoid decade of pain
EVERY part of the economy is severely unprepared for a no-deal Brexit, as industries and governments on both sides of the Channel need to step up planning urgently, the Confederation of British Industry (CBI) has warned.
Its study of all industries, from agri-foods and chemicals, to finance and data, to energy and logistics, has found that they will suffer major disruption and economic pain for “the next decade and more” if Oct 31 arrives without an agreement or an extension.
“There are no areas of relevance to the economy where the UK, the EU and the business community are all prepared well enough for no deal,” said the country’s biggest business group.
“In all 27 areas analysed, negative impacts are anticipated in either the short or long term.”
The CBI praised the Government for committing £4bn to Brexit preparations, making hundreds of legal changes and publishing more than 100 pieces of advice for industries.
However, “not all of this advice has been communicated well, been understood or is yet trusted by business”, the CBI said. Trials of the
new customs systems are a particular concern as a failure on Nov 1 could clog the border and seriously disrupt international trade.
The uncertain future of the Northern Irish border is another key worry, with little clear information as of yet on its post-brexit status.
At the same time, the EU has done far less than the UK to prepare for a nodeal scenario, with only short-term measures in place even for some of the most urgent industries, including haulage and air travel.
Meanwhile, businesses are underprepared, the CBI warned, with small companies unable to spare the funds to get ready for an eventuality that may never occur.
While the CBI called on Europe to take a more flexible approach in the event of a hard Brexit, EU sources said that the no-deal toolbox set out in the European Commission’s planning notices would not change.
The source added that no-deal preparations on the EU side would focus on ensuring that EU member states were “fully prepared to put them to use”.
How fiercely the EU member states would cling to the Commission’s strictures on implementing full tariffs and checks would only become clear in the actual event of no deal. However, senior EU diplomatic sources said that any respite would be temporary.
“Amid all the uncertainty, there is one thing about which I’m sure,” said a senior EU diplomatic source with knowledge of the negotiations. “That is that the EU will protect the integrity of its single market.”
The warnings chime with the Bank of England’s Brexit preparations, which make clear that the UK authorities and banks have done all they can to ready themselves.
The risks that remain come from the EU’S side, raising the possibility that businesses and households on the continent will be cut off from their banking, insurance and other financial services based in London after Brexit.