Firms gear up for EU relocations amid Brexit fears

The latest survey by the UK Institute of Directors has found that many UK companies are - because of lack of clear Brexit guidance from the government - unprepared for Brexit, with 10% of those companies seriously considering relocating to EU27 countries.

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One in ten of UK companies is "seriously considering" relocating operations to the EU27 after Brexit, and the figure could rise to 20 per cent if negotiations on a deal become deadlocked, according to a survey by the Institute of Directors (IoD).Calling on the government to accelerate publication of its ‘no deal’ guidance, the IoD said its survey of 800 businesses found fewer than a third had embarked on any form of Brexit contingency planning.

Many UK companies are unprepared for Brexit

Stephen Martin, director-general of the IoD, said: "Many companies are still unprepared for Brexit, and it’s hard to blame them. When it comes to knowing what to plan for and when, firms have been left in the dark. Trade associations like the IoD are doing their best to fill the information void, but the reality is that many companies feel they can only make changes once there is tangible information about what they are adjusting to."As long as no-deal remains a possibility, it is essential that the government steps up to the plate and provides advice on preparing for such an outcome. We therefore urge them to speed up publication of the technical notices. This should also help make companies more alert to the need to prepare now for all eventualities."Any transition period must take account of the fact that many businesses feel they can only adjust once there is clarity about the direction of travel. Given full negotiations on the future relationship can only begin once we have left the EU, both sides should ensure there is a proper implementation period once a new agreement has been concluded. This is after all what would happen following the conclusion of any other trade deal.”

Results of the IoD survey:

  • Internationally active firms, trading with both the EU and non-EU countries, are somewhat further ahead on contingency planning than the average, with 41 per cent reporting they have already actively engaged in this area.
  • Manufacturing firms are much less likely than financial services to say they do not intend to draw up any plans (31 per cent against 59 per cent), they are behind financial services on implementation. ICT is the sector furthest advanced, with ten per cent having already triggered contingency plans.
  • IoD members with a local branch or subsidiary in the EU have a particularly large share engaged in some form of planning (53 per cent), higher even than EU goods or services exporters.
They are also more likely to be looking at shifting operations from the UK to the EU - ten per cent have already done so, a similar percentage say they are actively considering it, and another ten per cent are waiting to see how negotiations go.
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