Business leaders fear the COVID crisis will magnify the impact of a no-deal Brexit, according to new research from the Institute of Directors.
A survey of almost 1,000 company directors found only one in 10 does not believe the pandemic will magnify the impact of a no-deal Brexit on their organisation.
Just under half of respondents said they are not fully prepared for the end of the transition period, while nearly a quarter reported their company may not be ready in time. Around one in four of those polled said they do not expect Brexit to affect their organisation.
What have business leaders said?
The Institute for Directors surveyed almost 1,000 company directors in the UK and found "Just under half of respondents indicated they weren’t yet fully prepared for the end of the transition period, with nearly a quarter of respondents reporting that their company may not be ready in time."
They also found "Stockpiling could be set to rise, as 12% [of directors] said they intended to do so. Concerningly, many firms still needed to obtain EU licences and authorisations."
Allie Renison, Senior Policy Advisor at the IoD, said "The prospect of no deal would be daunting enough, let alone dealing with it in the middle of a global pandemic. These disruptions won't cancel each other out, if anything they would compound the pain for British businesses."
Deloitte, one of the 'Big Four' accounting firms, released its own analysis of what a no-deal end to the Brexit transition period could look like. They said:
"COVID-19 has provoked some of the steepest GDP declines ever in the UK and other European economies. The path of recovery is uncertain, but it is likely many of the impacts will eventually prove temporary, even if there are may be hard-to-predict, longer-term socio-economic impacts, such as changes to supply chains or in the ways in which people and organisations work.
"Brexit, by contrast, is likely to bring mostly more predictable changes to the way the UK trades with the EU and some of its other trade partners, but these changes will be permanent.
"Both economic shocks will impact supply chains, often in different ways, meaning they may well compound each other. And their largest impacts are often on different sectors; overall leaving very little of the economy unscathed."
This is exactly what Best for Britain and the Social Market Foundation predicted in a report published in May 2020.
Commenting on the Institute of Directors research, Best for Britain CEO Naomi Smith said:
"Far from COVID obscuring the impact of a no-deal Brexit, the dual impact is giving business leaders sleepless nights.
"The industries impacted worst by COVID, such as hospitality, are not the same as those worst impacted by a no-deal Brexit. That means the economic pain is likely to spread further and the crisis we face is deeper.
"On top of that, our report with the Social Market Foundation showed that vast swathes of the north and midlands would see a 'double whammy' effect, with car manufacturers for example having to make costly changes to their supply chains at the same time as production grinding to a halt.
"The best way to soften the double economic blow coming our way this Christmas would be for the the Government to agree a trade deal with the EU as soon as possible. A no-deal Brexit would be disastrous in the current climate."
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