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How UK businesses are preparing for Brexit

With Brexit fast approaching, this month’s Big Question on how UK businesses are preparing for Brexit could hardly be more relevant. Despite delays, the question of preparedness will not go away.

The scale of the response to the latest Big Question, nearly 500 finance professionals from across a range sectors, shows the extent of its importance for business. The headlines are that, by eight to one, respondents think the government has made a bad job of the Brexit process, and by a big majority business wants as close a future relationship with the EU as possible. Within that there was a lot of fascinating detail.

Respondents were asked whether access to the EU market or access to EU workers was the bigger issue for them on Brexit. By 44% to 32% they said access to the EU market. That still meant that a for a third of organisations the availability of EU workers is the key issue. For some respondents to the Big Question, that effect was directly felt. “Having migrated from another EU country, I'm not quite sure how Brexit will affect me going forward,” said Daniel Kalmic, an accountant. “It is quite worrying.”

On this, while the flows of EU workers to the UK have fallen since the EU referendum, and the number of EU nationals working in the UK has fallen, only just over a fifth, 22%, of organisations said they had had difficulty recruiting or retaining EU workers since the referendum, while 56% said they had not.

One thing respondents could agree on was that they have received insufficient help and support from the government on Brexit.

Though 16% said such help and support had been available for them, more than four times as many, 67%, said official advice and support had fallen short

What about a no-deal Brexit, which many organisations are concerned about? How prepared is business for leaving the EU without a deal? The straight answer to that is that they are not prepared very much. Only 9% said they had prepared extensively for a no-deal Brexit, while 37% said they had prepared a little. These two categories were balanced by the 46% who said they had made no preparations at all.If there were to be a no-deal Brexit, many have not prepared for it.

An alternative to a no-deal Brexit is an extension of the Article 50 process for leaving the EU. The survey shows support for such an extension, with 26% saying there should be a short extension because we are not quite ready, and 45% favouring a longer extension because we are nowhere near ready.

Divisions remain on what kind of future relationship with the EU we should be seeking after Brexit. 18% wanted a “clean break” with the EU, so that the UK can build close relationships elsewhere in the world.

The majority – 70% of respondents – favoured a very close relationship with the EU, reflecting existing close ties

The scars remain. “This is the single biggest mistake Britain is making since Suez,” said Mrs Kesh Sharma, managing director of J & K Knitwear. “We are leaving the world’s largest trading bloc in which we have a preferred and special status for unicorns and pipe dreams.” Yasmin Law, a finance director, said: “Brexit is the fault of the people who voted to leave, and it is an absolute shame and a shambles.” But Tony Yoe, financial director of Nimax Theaters, said “What’s happened in parliament is not representative of what the voters wanted.”

Many businesses think the long process of leaving the EU has harmed the country and business. “Working within a global business, Brexit has made things unnecessarily difficult with relationships outside the UK,” said Tom Bray, a senior management accountant. “This needs to be rectified quickly.”

Overall, 80% think that government’s handling of Brexit has been bad, and only 9% good, an overwhelming vote of no confidence. Even here, however, there was a touch of sympathy. “Government acted in the best way they could in a very challenging situation,” said Natalie Guest, a tax manager.