Almost a third of UK businesses eye EU move

A third of UK business and two-thirds of those who trade with the EU are relocating or "actively considering" relocating some operations to the EU to deal with the impacts of Brexit, at significant cost to smaller firms.

David Sapsted

1 February 2019

Brexit concerns have led to almost a third of UK businesses to relocate or, at least, draw up plans to relocate some of their operations abroad, according to a survey by the Institute of Directors (IoD).

30 per cent of large and small firms relocating or planning to relocate operations

The survey of more than 1,200 company directors found that 16 per cent "had already pressed the button on relocation plans or were planning to" while a further 13 per cent were "actively considering" doing so.Publishing the survey on Friday, the IoD said, "The trend was not restricted to big business. While more large companies had already moved operations, small firms were almost twice as likely to be now actively considering the prospect."Two-thirds of companies exporting to the EU were looking to relocate overseas, primarily - and not surprisingly - to continental Europe, with those involved in trading goods more likely to consider moving than those involved in services.

Two-thirds of companies that export to EU looking to relocate operations with Brexit

Although business groups have long argued that the UK must maintain its trading links with Europe after Brexit, the government insists that Britain must leave both the single market and customs union.Edwin Morgan, acting director-general of the IoD, said, “It brings no pleasure to reveal these worrying signs, but we can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies."Change is a necessary and often positive part of doing business, but the unavoidable disruption and increased trade barriers that no-deal would bring are entirely unproductive.“While the actions of big companies have been making headlines, these figures suggest that smaller enterprises are increasingly considering taking the serious step of moving some operations abroad. For these firms, typically with tighter resources, to be thinking about such a costly course of action makes clear the precarious position they are in.

Cost of planning Brexit relocation puts a larger strain on smaller firms

“We still have a chance to stem the flow, and provide enough certainty to the firms that are considering moving but haven’t yet done so. The UK’s hard-won reputation as a stable, predictable environment for enterprise is being chipped away. Our political leaders must keep this in the front of their minds as we enter this critical phase of negotiations.”The IoD survey came within a week of a similar report from the British Chambers of Commerce, which said thousands of firms were gearing up to move operations abroad or were stockpiling goods to combat the worst effects of a no-deal Brexit.And on Wednesday, Carolyn Fairbairn, director-general of the Confederation of British Industry warned that businesses were speeding up their plans for a no-deal Brexit because of the political logjam in parliament over the Withdrawal Agreement agreed between the UK and EU.

Parliamentary delays over Withdrawal Agreement lead to no-deal planning for businesses

“I don’t think there will be a single business this morning who is stopping or halting their no-deal planning. I fear they may even be accelerating it,” she said.A government spokesman said, "We want to protect jobs and the economy as well as provide certainty for businesses and individuals as we leave the EU. The best way to do this is to leave with a deal, and that's what we're focused on doing."The strong economic foundations we are putting in place through our modern Industrial Strategy are part of the reason the UK was recently rated the best place in the world for business, and saw more than £100 billion of foreign direct investment in the last three years, more than France and Germany combined."Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online DirectorySubscribe to Relocate Extra, our monthly newsletter, to get all of the international assignments and global mobility news.

©2024 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.