Business groups hit out at no-deal Brexit moves

They say although some businesses have already started planning for a no-deal, there are others who haven't and feel let down they are even having to consider it.

It comes as the country's five main business groups have issued a strongly worded warning about a no-deal Brexit, saying many firms are now reaching "the point of no return".

Contingency plans are being put in place for the UK leaving the EU without a deal, which are a "significant drain" on companies' time and money, the Government was told.

Firms are pausing or diverting investment that should be boosting productivity, jobs and pay, said the British Chambers of Commerce, CBI, EEF, Institute of Directors and Federation of Small Businesses.

Richard Sheehan, chief executive of Shropshire Chamber of Commerce, said: "No-deal is not an option I have come across that businesses would like or support. Those who are against it feel let down we are even considering it.

"No-deal is not an option we should be looking at. We should be negotiating strongly to ensure we have frictionless trade, and pushing hard on the immigration bill to ensure businesses, which are telling us they can't get people with the right skills, have access to the pool of talent which is spread around the world.

"The larger companies who trade internationally have been investing a lot of time in what they would do in all scenarios. But small businesses have been focussing on the day job, saying they will worry about the outcome when they know what it is.

"Obviously there is a lot of concern, particularly of the unknown and what it would mean.

Stockpiling

"It is up to the politicians to sort this out. As you can see from what the main business groups have said, we are running out of patience!"

Chris Plant, director at Chase Chamber of Commerce, covering Cannock and south Staffordshire, said: "Firms are pausing or diverting investment that should be boosting productivity, innovation, jobs and pay into stockpiling goods or materials, diverting cross border trade and moving offices, factories and therefore jobs and tax revenues out of the UK.

"While many companies are actively preparing for a no-deal scenario, there are also hundreds of thousands who have yet to start – and cannot be expected to be ready in such a short space of time."

Black Country Chamber of Commerce chief executive Corin Crane said manufacturing, particularly in the Black Country, needs a transition period from April 1.

"That is absolutely essential. A no-deal option is very scary for a lot of our manufacturers," he said.

"The automotive industry is already being hit from many angles with the slump of diesel engine car sales, rising fuel and energy prices and Jaguar Land Rover going on a three-day week.

"The implications for suppliers is huge and if this uncertainty over what is happening to the supply chain extends beyond April 1 it will be really difficult to manage that."

The cabinet met this week to ramp up preparations for a no-deal departure.

Uncertainty

Anton Gunter, managing director of Telford-based shipping firm Global Freight, which supports businesses with their overseas trade, said he remained optimistic that a deal would be struck on Brexit but in the meantime urged businesses to prepare for both outcomes.

He said: “What’s proving difficult for businesses at the moment is the level of uncertainty over whether we are going to walk away with a deal on Brexit or not.

“A no-deal outcome however, could potentially have quite serious consequences for customers who trade in Europe because of uncertainties around customs clearances. Should such a scenario arise, businesses should be planning for delays and extra costs at border posts.

“They also need to be looking at their foreign currency reserves and making contingency plans should a no deal exit serve to weaken the pound.”

A joint statement on behalf of the five main business groups said: "Businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward.

"The lack of progress in Westminster means that the risk of a no-deal Brexit is rising.

"With just 100 days to go, the suggestion that no deal can be 'managed' is not a credible proposition.

"As a result of the lack of progress, the government is understandably now in a place where it must step up no-deal planning, but it is clear there is simply not enough time to prevent severe dislocation and disruption in just 100 days."