The South Wales Chamber of Commerce is encouraging Welsh businesses to make the most of resources and insight available, as research shows that a concerningly high number of UK firms aren’t ready for a no deal Brexit.
New research from the British Chambers of Commerce shows that two-fifths of UK firms aren’t ready for a no deal Brexit. Businesses have consistently called on government to avoid a messy and disorderly exit but in light of the political turmoil and relentless uncertainty, clearer and more consistent information is needed to help them prepare.
The survey of over 1,500 firms from across the UK, found that in the midst of conflicting political messages over the likelihood of no deal and remaining gaps in government guidance, two-fifths (41%) of UK businesses have not done a Brexit risk assessment. Those that trade internationally (63%) are far more likely to have carried out a risk assessment on the impact of Brexit to their business than their counterparts that trade in the UK only (35%).
There has been a welcome jump in those that have carried out a Brexit assessment since last year (35% in 2018 and 57% in 2019), but with just weeks until a potential no deal exit, there is still a large proportion of firms that aren’t in a position to prepare for the impact.
Last month, Sajid Javid, the UK chancellor, announced an extra £2.1bn to boost no-deal Brexit planning, taking the total amount allocated by the government to £6.3bn. The South Wales Chamber of Commerce is urging business within Wales to make the most of this funding, as well as other resources and advice available to them, to ensure they have at least a solid Brexit risk assessment in place.
Heather Myers, CEO, South Wales Chamber of Commerce, said:
“We are very aware that it is really difficult for businesses to plan at the moment, and we are very mindful of the difficulties faced by our internationally trading businesses on what action to they should take.
“However, there are some practical steps that can be taken to mitigate risks, irrespective of what the final outcome of Brexit may be, and we are here to help businesses explore these to review what might work best for them.
“Being closely linked to advice from Whitehall, and as part of the British Chambers networks, we are getting answers, gaining the insight needed to ensure Welsh Businesses have what they need to move forward.
“Whilst there are still a number of areas we are seeking advice from UK government on, we are able to offer practical solutions and training to Welsh businesses to ensure that they are as prepared as they can be.
In a no deal scenario, firms that trade with Europe will face new customs procedures at the border. However, awareness of other schemes* to maintain continuity of trade remains low. The results of the British Chambers of Commerce show that even among internationally active UK businesses:
- 63% are not aware of Transitional Simplified Procedures (TSP)
- 62% are not aware of Authorised Economic Operator status (AEO)
- 73% are not aware of Customs Comprehensive Guarantees (CCG)
BCC campaigned successfully for the government to automatically issue EORI numbers, which are critical for trading across borders, to all VAT-registered businesses. Now, the British Chambers of Commerce is calling on HM Government to either automatically enrol or support businesses to access these other important customs and border facilitations.
The business group also continues to encourage all companies – not just those trading across borders – to consider the potential impact of Brexit on their operations. UK-only businesses will face impacts linked to their own suppliers and customers, or to changes elsewhere in the economy, and should take steps to assess these.
Dr Adam Marshall, Director General of the British Chambers of Commerce, said:
“Businesses do not want to see a messy and disorderly Brexit, but ongoing uncertainty means they must prepare for all possibilities as the October deadline looms.
“While more firms have taken basic steps to prepare for change than was the case last year, and government has stepped up communication to businesses, ongoing uncertainty makes business planning with confidence next to impossible. Companies are told to plan but are being presented with a moving target.
“Businesses are facing significant changes on multiple fronts, and need official guidance that is consistent, precise and easily accessible, enabling them to trade in any scenario. Yet, there are many areas where there simply isn’t enough clear and actionable information for businesses to mitigate some of the impacts of an unwanted no-deal exit.
“Low levels of awareness around special customs and trade schemes are of particular concern, as this highlights the potential for disruption at borders in an unwanted no-deal situation. Companies should be automatically enrolled or supported to enrol in these schemes to increase trader readiness.
“Our evidence yet again reinforces the importance of averting a chaotic exit on October 31st.”