CBI: no one is ready for no-deal Brexit

Out-Law News | 30 Jul 2019 | 10:43 am | 2 min. read

Business group the CBI has told firms to start preparing immediately for a no deal Brexit as it warned that “no one is ready” for the UK to leave the EU without a withdrawal agreement.

In a wide-ranging report (128 page / 7.8MB PDF), the CBI has given 200 recommendations for actions that it says business, the UK government, the European Commission and EU member states should take to prepare for a no-deal Brexit.

It said businesses should resume preparations for no deal immediately, and prepare to prioritise their employees in the event of a no-deal Brexit happening. The CBI said communication with staff and with government would be key for firms.

Brexit expert Clare Francis of Pinsent Masons, the law firm behind Out-Law, said the report’s publication in the wake of the election of Boris Johnson as the new Conservative Party leader and prime minister was appropriate.

“With the risk of a no-deal Brexit heightened again the CBI’s report is a timely reminder for business of the potential consequences and the actions that should be taken. Whilst the report may seem daunting with some 200 actions for businesses to take the key will be to prioritise and for businesses to focus on those areas where they are likely to be most heavily impacted – such as supply chains, cross border trade and data flows. Taking proactive steps now will help businesses maintain competitive advantage as we approach the end of October,” Francis said.

businesses should focus where they are likely to be most heavily impacted, such as supply chains, cross border trade and data flows. Taking proactive steps now will help businesses maintain competitive advantage 

The report also recommended that the UK government needed to put the civil service back on to a no-deal footing and resume engagement with business stakeholders; review and update by the middle of August all the technical notices and advice previously published; plan for additional parliamentary time to complete necessary legislation; and scale up trials of IT systems needed to put no-deal arrangements in place.

It said the EU should bring forwards the ability for UK firms to apply for essential licences as a third country before the UK leaves; and match temporary mitigations which the UK has adopted to mitigate issues such as disruption to trade.

The CBI also said the UK and EU should prepare to cooperate in the event of a no deal, and attempt to re-open negotiations about the future relationship between the two.

The report noted that many of the plans made by the UK so far would delay negative impacts but not remove them. It said the EU had taken fewer steps to reduce the damage of no deal than the UK, and there were very few joint actions so far.

As a result, the CBI said businesses’ efforts to prepare had been “hampered by unclear advice, tough timelines, cost and complexity”.

“The CBI also puts a call to the UK government in the paper encouraging them to update technical notes, scale up IT provision and afford sufficient parliamentary time. With the clock firmly ticking time is running short and businesses need to act now to ensure that they are on the front foot,” Pinsent Masons’ Francis said.