CBI report: "No one is ready for no-deal Brexit"

Neither the UK nor the European Union are ready for a no-deal Brexit on 31 October, according to the findings of a report by an influential business lobby group.

The Confederation of British Industry (CBI) report, entitled 'What Comes Next? The Business Analysis Of No Deal Preparations', has tabled a host of recommendations for the UK, EU and businesses to help speed up preparations for a no-deal scenario.

Having analysed 27 key areas of the economy, the report found that, even taking into consideration existing mitigations,there would be likely disruption in 24 of these areas in the immediate aftermath of a no-deal Brexit. 

"At the moment, this analysis shows there are no areas of relevance to the economy where the UK, the EU and the business community are all prepared well enough for no deal. In all 27 areas analysed, negative impacts are anticipated in either the short or long-term," the report said, adding, "But that can change."

The CBI report acknowledged that: "The UK has made many welcome proposals for reducing the impact of no deal". These include the allocation of £4-billion (€4.4-billion) to mitigate any negative impact, the laying down of hundreds of Statutory Instruments, and the publishing of more than 100 pieces of advice for citizens, businesses, local authorities and universities.

However, it also pointed out that the advice has not been well communicated or understood. Furthermore, many of the plans laid down by the government delay the negative impacts but do not remove them, with a priority put on short-term stability, leaving a longer term gap which feeds the continued uncertainty.

In order to improve its readiness, the CBI has made a raft of recommendations for the UK government. These include putting the civil service on a no-deal footing, bringing forward a plan for business engagement immediately, review and update Brexit advice by mid-August, making additional Parliamentary time by the beginning of September, and scaling up trials of IT systems by mid-October.

For the EU's part, the report found that: "By some way, the EU has taken fewer steps to reduce the damage of no deal than the UK has, having taken a noticeably less generous, more limited approach to reducing the disruption of no deal, with only a small number of limited temporary measures made – such as allowing UK HGV licenses to be valid for 9 months from no deal and permitting UK aeroplanes to continue flying for 6 months."

The CBI also made a host of recommendations to the EU. These include moving forward to early September the ability of UK companies to apply for essential licenses as a third country, allowing preparations to move quickly into no-deal negotiations to be brought forward to the start of October, and encouraging the authorities and member states to take a pragmatic approach to citizens and liability if a no-deal comes to pass, amongst others.

The report also found that despite billions being spent, the business community has also not made sufficient preparations. Small businesses in particular have been unable to divert often precious resources to Brexit preparations.

"Larger companies, particularly those in regulated areas such as financial services, have well-thought-through contingency plans in place, though smaller firms are less well prepared," the report found.

Recommendations to the business community included the immediate resumption of no-deal preparations, making plans to communicate additional needs for mitigations to both the UK and EU by early September and, should a no-deal Brexit occur, prioritising people above all else.

The CBI compiled the report based on thousands of interviews with companies of all sizes and in all sectors, as well as trade associations, and covered all sectors of the UK economy.

In an interview with the BBC's Today programme, the CBI's deputy director general, Josh Hardie, said: "A deal is absolutely essential if we're to manage the economy in the best way that we can."

"If you see a storm coming, you put down the sandbags," he said. "It doesn't mean you're going to stop all the flood water, you'll probably still lose the kitchen but you might save the bedroom and that's where we are right now," he added.

A spokesperson from the UK government said of the report: 

"This is a constructive contribution from the CBI, acknowledging the importance of all businesses preparing for no deal on the 31 October.

"While we have done more to prepare than this report implies, since the new prime minister was appointed the government has stepped up the pace of planning for no deal. The chancellor has confirmed all necessary funding will be made available for vital no deal preparations. This includes funding for a major nationwide communications campaign to ensure that people and businesses are ready.

"Crucially, while there is more to do, the CBI observes that the UK is ahead of the EU in planning for no deal."

The UK's new Prime Minister Boris Johnson has appointed Michael Gove as the minister in charge of no-deal planning. Mr Gove said that he and his team had the aim of coming to an agreement with Brussels, but in an article in the Sunday Times, he said: "No deal is now a very real prospect."

Back to Homepage

Back to Politics & Economics