Too many UK businesses remain dangerously unprepared for Brexit
13 March 2017
Our new survey, Making sense of Brexit: The views of UK business, reveals that “…too many UK businesses remain dangerously unprepared for Brexit.”
The survey is a wide-ranging look at what UK businesses think about Brexit. 175 key decision makers contributed: CEOs, chairmen, managing directors, finance directors and GCs from organisations of every type and size. They represent a key cross-section of the UK business community, including some of our largest companies.
One of the survey’s most concerning conclusions was that, since the vote, 80% of respondents say they have not taken any further steps to prepare for Brexit, opting instead for a ‘wait and see’ approach. This is despite 96% of them saying Brexit is an agenda item at their senior/board level.
Ros Kellaway, Head of EU and Trade Law, Eversheds Sutherland (International) warns:
“Brexit is about to begin for real. Article 50 is due to be triggered. Businesses need to start preparing and planning now: on trade, people, transition and timing. The two-year Brexit negotiation period will burn-by very quickly. The Dutch, French and German elections, and the final ratification process, are expected to shorten the time for substantive talks.
“Our survey shows too many businesses – with the notable exception of those in the financial services sector – are letting time go by without getting ‘Brexit-ready’ and remain dangerously unprepared. They need to wake up to the changing world and begin informed Brexit planning. The Brexit bus is leaving the stop, and businesses must be on it with their plans to hand.”
UK businesses’ key concerns
Since June 2016, very little detail has been given on what Brexit will look like for UK business, making the terms of the UK’s exit from, and its future relationship with the EU, unclear. This lack of clarity is a major cause of concern for a number of organisations.
Businesses said areas of particular disquiet include:
- economic uncertainty – specifically, the continuing stability of consumer confidence and property prices
- HR and immigration issues – not just UK-based workforces, but also UK nationals working in other EU countries (more than 50% of respondents had such staff)
- regulatory issues
- trade issues
- contracting issues
- currency fluctuations
For financial institutions, the potential loss of passporting and shift of business from London’s financial markets were alarming.
The majority of respondents said emphatically that the UK government’s three main negotiation priorities should be:
- continued free movement of goods and services between the UK and EU
- continued free movement of workers between the UK and EU
- clarity on the duration and nature of negotiations
“Our report shows the concerns and challenges for businesses, but it also highlights opportunities and wins UK businesses feel Brexit can bring if it is done well.”
Top things businesses need to be doing now
Eversheds Sutherland (International) advises in the report that, despite the continued uncertainty, there are still many things businesses could and should be doing now to mitigate their risks, in particular:
Due diligence your workforce, its origins and status. Plan for a variety of post-Brexit outcomes, including a more restrictive immigration policy and the need for different approaches to training and recruitment.
Analyse your business’ trading networks, both customers and supply chains, and plan for post-Brexit outcomes, including a WTO world.
• Contractual and Counter party Audit
Review all cross border contracts and counterparty arrangements. Amend and adjust them (so far as possible) to cater for post-Brexit changes.
“Businesses want to be heard, and as the UK government prepares to leave the EU, it is critical that the government listens: doing its best to secure the continued free movement of goods, workers and services between the UK and EU and providing much needed clarity on the duration and nature of negotiations could make the difference for the UK between growth and economic struggle.”
The full Making sense of Brexit: The views of UK business survey, as well as details of how we can help and advise you on your business plan for Brexit, are available on our Brexit hub.