Outgoing director of CBI Dame Carolyn Fairbairn said that any buffers to cope with the additional cost and planning of an exit from the EU customs union and single market without a deal had been exhausted by the Covid-19 pandemic. “The resilience of British business is absolutely on the floor,” she said. Firms can’t cope with no deal and virus – CBI boss, BBC, 11 June 2020
Many businesses are fighting to survive as the impact of COVID-19 unfolds. A good deal with 🇪🇺 would be a foundation stone of renewal. Government has ruled out an extension – business have no choice but to plan on that basis. But that means a deal is the only acceptable option.
— Carolyn Fairbairn (@cbicarolyn) June 11, 2020
According to a recent survey, more than one fifth of businesses that furloughed staff are planning redundancies over the next three months to July (Financial Times, 17 May 2020).
Research and development
See statement in ‘Science & research’ section by Unite about investing in skills in a UK space programme now that we have left the EU.
- UK manufacturing is in crisis, as export orders decline to their lowest level in three years. According to the Financial Times, EU customers were cutting their orders from British businesses after we officially left the EU in February (even though we are still part of the Single Market), and this was before coronavirus hit us. Make UK, the manufacturer’s trade association, is predicting a drop of 2.1 per cent in output for this year, contrasting with a previous prediction of growth. UK manufacturing exports fall to lowest level in three years, FT (£) , 15 March 2020
- The question is how resilient will businesses be when they are currently in crisis mode? How much more uncertainty and contingency planning can businesses cope with? CBI Head of EU Negotiations Nicole Sykes does not think there is capacity to deal with more right now:
“At a time when confidence in the business community is as scarce as self-raising flour in Sainsbury’s, these extra questions aren’t helpful. But so long as companies aren’t able to dedicate time to reading thousands of tariff lines and hundreds of pages of legal text as they normally would, politicians don’t need to answer those questions in full (as helpful as that would be).” SOURCE: Brexit and business confidence, Nicole Sykes, Encompass Europe, May 2020
- Many British businesses have so far resisted laying off people by taking up the furlough scheme, but according to a recent survey, more than one fifth are planning redundancies over the next three months to July. SOURCE: More than a fifth of UK employers plan redundancies, FT (£), 17 May 2020
- If business and trade decline, compounded by the dual effect of Covid-19 and Brexit there will be fewer jobs. For example, thousands of jobs will go as major British firms such as Rolls Royce close UK plants as a result of the market decline due to Covid-19 factors.
- One in five businesses said they would plan to move some or all of their business overseas. A business survey last year concluded that many companies would revise recruitment and investment plans downward, rather than up, in the event of a no-deal exit. SOURCE: British Chamber of Commerce, 2019
- The responsibility for coping with the outcome of a no-deal Brexit will be on business not government.
- Based on the available information, the British Chamber of Commerce published a 21 page post-transition Brexit businesses health check to help business map out changes to their new UK-EU trade relationships. Many of their links written in January 2020 have already been superseded, challenging forward planning.
Investment in UK
- The falling value of the Pound Sterling (26 May 2020) has been putting pressure on businesses for much of the past year. It has increased the costs of importing goods into the country. It also makes Britain a less attractive country for foreign investors as diverse as Victoria’s Secret, and Tilda Rice. SOURCE: UK Pound Sterling/Euro FX Cross Rate, FT (£) 26 May 2020 | Victoria’s Secret warns on drop in the British pound, FT (£), 10 September 2019