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News | Published July 29 2019

Aspects of Brexit "cannot be mitigated", says CBI

The lobby group the Confederation of British Industry has said that both the UK and EU are unprepared for a no-deal Brexit on October 31.

Sending a warning to Boris Johnson’s new government, the CBI said: “While the UK’s preparations to date are welcome, the unprecedented nature of Brexit means some aspects cannot be mitigated”.

The CBI has long believed that leaving the bloc with a ratified withdrawal agreement was necessary to avoid economic damage and risk to jobs, with its deputy general Josh Hardie saying that a deal is "essential" for the economy.

Yet, Johnson’s government has now stepped up preparations for no-deal.

Michael Gove has been appointed Chancellor of the Duchy of Lancaster in Johnson’s new cabinet and tasked with the responsibility of contingency planning for no-deal.

Gove has said that the government is “working on the assumption” that there will be no-deal to ensure the country is sufficiently prepared.

Although he and Johnson are both looking to negotiate a new withdrawal agreement, Gove wrote in the Sunday Times that no deal is “a very real prospect”.

The CBI has compiled a report titled What Comes Next? The Business Analysis Of No Deal Preparations in a bid to advise businesses on the practical steps they can take to try and minimise disruption.

The report is based on interviews with businesses of all sizes across all sectors along with 50 trade associations to ensure all areas of the UK economy are accounted for.

Its advice is based on the existing government strategy as well as the current stance of the European Commission, EU member states and businesses.

A UK government spokesperson 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."

Although firms have already spent heavily on no-deal contingency planning, the CBI says that businesses “remain hampered by unclear advice, timelines, cost and complexity”.

The group said: "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 CBI believes that around 24 of 27 areas of the UK economy would be adversely affected in a no-deal scenario, with deputy general Josh Hardie telling the BBC that: ”A deal is absolutely essential if we're to manage the economy in the best way that we can."

Speaking of preparing for no-deal, Hardie added: "If you see a storm coming, you put down the sandbags.

”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.”

The CBI has long lobbied for the UK to leave with a deal and called on the government to “scale up” meetings to advise businesses of what steps to take.

Talks between the government and business on preparing for no-deal have stalled since the Brexit deadline was pushed back from March to October 31 and the CBI is pushing to see these reopened as soon as possible.



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Authored by

Scott Challinor
Business Editor
@theparlreview
July 29 2019

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