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Firms told to prepare for no-deal Brexit under next Tory prime minister

Tom Belger
Finance and policy reporter
Boris Johnson is prepared to leave the EU without a deal. Photo: Steve Back/Getty Images

Firms should step up planning for a no-deal Brexit because they cannot trust politicians to solve the crisis, business chiefs have warned.

The head of the Institute of Directors (IoD) said Britain risked wasting the Brexit delay granted by Brussels until October, saying many “seem to have forgotten” the need to secure a deal as soon as possible.

Edwin Morgan, interim director general of the IoD, highlighted the willingness of several contenders to be the next Conservative leader and UK prime minister to leave the EU without a deal.

A 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.

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: Top companies warn no-deal posturing already costing jobs

The IoD warned that company leaders should “use the time left to ensure they understand their potential exposure” from Britain crashing out without an agreement.

It comes a day after top UK business groups launched a stinging attack on politicians for talking up a no-deal Brexit, warning it is already causing job losses.

Representatives for manufacturing, cars, farming and food and drink firms all sounded the alarm at an event in parliament, with one warning it could “consign a generation of highly skilled workers to the scrapheap.”

A business representative warned no-deal could 'consign skilled workers to the scrapheap.' Photo: Press Association

READ MORE: Brexit ‘could see Britain flooded with cheap copycat goods’

Morgan said in a statement on Friday that parliament’s decision not to adopt Labour’s plans this week to block a no-deal Brexit by giving MPs control “made clear how real the possibility of no deal is.”

He said: “Business can have no absolute reassurance that an agreement will be reached, particularly given the commitment of some Conservative leadership candidates to leaving the EU in October with or without a deal. It feels like the extension is at risk of being wasted.

“It shouldn’t need saying, but many seem to have forgotten that getting a deal would be by some distance the better outcome, both for the UK and the EU.”

He attacked politicians who played down the risks of a no-deal Brexit through misleading language, adding: “No deal is not ‘clean’, the mitigations announced so far are temporary, incomplete and untested with industry, and we would then have to enter into talks with the EU all over again.

“If businesses can’t have faith in politicians, that means they have to look out for themselves.”

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