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Firms still paralysed by Brexit uncertainty three years after UK voted Leave

Tom Belger
·Finance and policy reporter
Leave and remain protesters outside the Houses of Parliament, London, ahead of the latest round of debates in the House of Commons concerning Brexit issues.
Leave and remain protesters outside the Houses of Parliament, London, ahead of the latest round of debates in the House of Commons concerning Brexit issues.

British firms are still suffering from politicians’ failure to resolve the Brexit crisis three years to the day since the EU referendum, a leading business group has warned.

Allie Renison, head of EU & trade policy at the Institute of Directors (IoD), told Yahoo Finance UK both the Brexit process and its endpoint remained “mired in uncertainty.”

She called for Tory leadership rivals Boris Johnson and Jeremy Hunt to take responsibility for preparing firms to cope if they lead Britain out of the EU without a deal.

The IoD is calling for government-funded vouchers to cover the costs of Brexit contingeny planning, amid widespread evidence many firms are under-prepared.

READ MORE: NHS could face ‘critical shortages’ of medicines under no-deal Brexit

Experts have warned a no-deal Brexit could be catastrophic for the UK economy, causing widespread disruption, delays and even shortages.

Sunday marks three years to the day since Britain went to the polls in the EU referendum on a rainy day on 23 June, 2016.

The UK voted to leave the EU by a 52:48 margin as the campaign led by Nigel Farage, Boris Johnson and others won the day, in a seismic decision with far-reaching consequences for decades to come.

Nigel Farage, the leader of the United Kingdom Independence Party (UKIP), votes in the EU referendum, at a polling station in Biggin Hill, Britain June 23, 2016.   REUTERS/Dylan Martinez  TPX IMAGES OF THE DAY
Nigel Farage on 23 June 2016. REUTERS/Dylan Martinez TPX IMAGES OF THE DAY

The past three years has seen Britain plunged into what has been called the biggest political, economic and constitutional crisis since the second world war.

Renison said: “Three years on from the referendum, both the Brexit process and its endpoint remain mired in uncertainty.

“Firms have had one hand tied behind their backs trying to plan in advance, and the IoD has repeatedly called for financial assistance to help them access the specialist help they need to properly prepare. Despite this being provided in other EU countries, the Government has made little such offering.

“Given their willingness to countenance no-deal, we would strongly urge both leadership candidates to consider introducing a Brexit planning voucher system.

“Even if no deal were averted, such a scheme would still be highly beneficial throughout the transition period, helping firms get to grips with the challenge of trading with the EU under a new set of circumstances.”

READ MORE: Most exporting firms still lack right paperwork for no-deal Brexit

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The IoD’s interim director also sounded the alarm over new figures showing just 40% of firms that export to the EU had completed the necessary paperwork from government.

Around 150,000 firms could be left unable to keep trading with European partners on Brexit day if they fail to register before Britain’s departure.

Boris Johnson and Jeremy Hunt, the two remaining candidates in the Tory leadership race, have both talked up their willingness to lead Britain out of the EU without an agreement if necessary.

READ MORE: EU says next UK leader can’t re-open Brexit withdrawal talks

The IoD urged firms to step up planning for a no-deal Brexit earleir this week, saying they could no longer trust politicians to solve the crisis.

A recent survey of almost 1,000 members of the IoD showed fewer than one in four had activated their Brexit contingency plans in April. More than half had not engaged in any contingency preparations at all.

Almost one in three firms said they were still waiting for the shape of Britain’s future relationship with the EU to become clear before drawing up contingency plans.

READ MORE: Bank of England governor slams Boris Johnson’s Brexit plans