Tue, Oct 23, 2018 - Page 10 News List

Most UK firms to trigger Brexit safety plans by Christmas, CBI survey says

AP, LONDON

The majority of British firms are poised to implement their Brexit contingency plans by year’s end if there is not greater clarity over the country’s exit from the EU, a leading business group said on Sunday.

The Confederation of British Industry (CBI) said these plans could include cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating production and services overseas.

The warning comes amid growing fears that Britain might crash out of the EU in March without a deal on the future relationship. That could see tariffs placed on British exports, border checks reinstalled and restrictions imposed on travelers and workers — a potentially toxic combination for businesses.

“The situation is urgent,” CBI director-general Carolyn Fairbairn said. “The speed of negotiations is being outpaced by the reality that firms are facing on the ground.”

Discussions between the two sides are at an impasse over how to maintain an open border between EU member Ireland and Northern Ireland, which is part of the UK.

A summit of EU leaders last week failed to yield a breakthrough. December is the next scheduled EU summit, leaving the Brexit process tight ahead of Britain’s official departure date on March 29. Even if a divorce deal is forged, there are doubts over British Prime Minister Theresa May’s ability to secure the necessary majority in the British Parliament, given bitter divisions over the topic.

“Unless a withdrawal agreement is locked down by December, firms will press the button on their contingency plans,” Fairbairn said. “Jobs will be lost and supply chains moved.”

Fairbairn’s warning was based on a survey of 236 member firms tilted toward small and medium-sized companies with up to 500 employees, undertaken from Sept. 19 to Oct. 8. The survey found that 82 percent of firms will have started to implement contingency plans by December if the Brexit process is not any clearer.

The CBI said that 80 percent of firms say that Brexit has had a negative effect on investment decisions, more than double the 36 percent recorded a year ago. The survey found that 66 percent of businesses said that Brexit has had an effect on the attractiveness of the UK as a place to invest, while 24 percent said there had been no effect.

Some big companies are becoming increasingly vexed by the impasse in the Brexit talks.

“Uncertainty is draining investment from the UK,” Fairbairn said.

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