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Thursday, February 28, 2019, 10:52
UK businesses warn too late to prepare for no-deal Brexit
By Xinhua
Thursday, February 28, 2019, 10:52 By Xinhua

A European Union supporter tries on a new beret which shows the starts of the EU flag, as he take part in a demonstration outside the Palace of Westminster in London, Feb 27, 2019. (ALASTAIR GRANT / AP)

LONDON — British businesses feared that a no-deal Brexit will disrupt trade and cause damage despite government mitigation, and warned that it was too late to prepare for a no-deal scenario. 

The uncertainty of Brexit was forcing firms to plan for contingencies that might not happen, at great cost

Implications 

The British government has published a paper, Implications for Business and Trade of a No Deal Exit on 29 March, which warned that "the impact of a no-deal scenario is expected to be significant in a number of areas", despite government mitigation. 

The paper explained the government's latest assessment of the implications for business and international trade in Britain, if it leaves the European Union (EU) without a deal, and said that a no-deal Brexit "would have a variety of effects on business, trade and the economy". 

The British government also said in the paper that part of the mitigation for the effects of a possible no-deal Brexit that it would take unilateral action to maintain as much continuity as possible in the short term, for example allowing EU road haulers to drive in Britain using EU licenses, and recognizing EU safety tests for medicines sold in Britain. 

The government said that the Treasury has made more than 4 billion pounds (US$5.3 billion) available for EU Exit planning since 2016, and allocated 2 billion pounds in December to support core EU exit preparations for the 2019-2020 financial year.

ALSO READ: UK lawmakers vote to hold PM May to Brexit promises

Britain's Prime Minister Theresa May leaves 10 Downing Street to make a statement to the Houses of Parliament in London, Feb 26, 2019. (MATT DUNHAM / AP)

British Prime Minister Theresa May bought herself more time Tuesday to strike a better Brexit deal with the EU by offering rebellious MPs the chance to vote against leaving the bloc with no deal or extending the departure date. But she insisted that "an extension cannot take no deal off the table". 

Talking about the paper assessing readiness for a no-deal Brexit, May told MPs, "I believe that if we have to, we will ultimately make a success of a no deal. But this paper provides an honest assessment of the very serious challenges it would bring in the short-term, and further reinforces why the best way for the House of Commons to honor the referendum result is to leave with a deal." 

'In despair'

But British businesses are still critical of the lack of a clear path for Brexit. 

The Confederation of British Industry (CBI), which represents businesses employing nearly seven million workers, told Xinhua Wednesday afternoon that a no-deal Brexit must be avoided because it would be damaging for businesses. 

"British firms are in despair. The government's own analysis shows just how damaging a no-deal scenario would be to the economy," a CBI spokesperson said. 

"Businesses have lived with crippling uncertainty since the 2016 Brexit referendum, and a no-deal exit is still not off the table." 

The uncertainty of Brexit was forcing firms to plan for contingencies that might not happen, at great cost. 

"Some firms are spending millions on contingency plans they might not need, and more worrying still, four in five small firms have taken no action at all," the CBI spokesperson said. 

The spokesperson warned that continued uncertainty would see the situation deteriorate, to the detriment of businesses and trade. 

"No deal must be averted. Every day without a deal means less investment and fewer jobs created. Until politicians can agree a deal that commands a majority in parliament, is acceptable to the EU and protects our economy, business despair will deepen," the spokesperson said. 

Small businesses suffer 

Small British businesses are also suffering because of Brexit uncertainty. 

The Federation of Small Businesses (FSB), a representative group, said that its membership of small and medium-sized businesses needed an end to the "Brexit stalemate". 

Leave the European Union supporters march in protest outside Houses of Parliament in London, Feb 27, 2019. (MATT DUNHAM / AP)

Mike Cherry, FSB chairman, said, "Our small firms want an end to the Brexit stalemate; small businesses are trying to get on with the job, they now need all politicians to come together and do the same." 

Cherry welcomed that a no-deal Brexit would not go ahead unless parliament backed it. 

"A no-deal Brexit on March 29 will only happen if parliament chooses it. If MPs are presented with this choice, I ask them to recognize the damage a no-deal Brexit would cause the UK small business community," Cherry said. 

However, Cherry warned that it was "already too late to prepare" for a no-deal Brexit, and that half of small firms had said they would be impacted by a no-deal Brexit.

READ MORE: British PM offers MPs choice to vote on no-deal or delayed Brexit

They told us they needed at least two months to prepare, a further third won't be in a position to be ready whatever happens." 

"No deal problems don't just start on 29 March. Container ships travelling from the UK to East Asia, Oceania, or South America take weeks to arrive," said Stephen Phipson, Chief Executive of Make UK, the British Manufacturers' Organization. 

"Sea-freight is leaving the UK as we speak with no idea of the trade rules and tariffs that will be in place when the goods arrive," Phipson added.

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