Majority of British companies unprepared for Brexit

The majority of Britain’s companies have not yet made any preparations for Brexit, according to a survey by the Bank of England’s regional agents. The survey asked 369 companies whether they had adjusted their “business plan” since the 2016 referendum to leave the EU, such as by setting up new legal entities, relocating offices or changing their sourcing and supply chains. Just under a third of companies said they had taken any of these actions to prepare for any change to trading arrangements, the BoE agents found.

The survey was carried out between October 22 and November 29. Business services, a category that includes banks, lawyers and fund managers, were the most likely to say they had made any preparations, while construction companies were the least likely. The report also examined industries that would be at the forefront of any Brexit-related disruption.

Airlines said they were increasingly confident that an agreement would be struck to prevent disruption to flights, whereas ports were concerned about a lack of space and manpower to cope with no deal. “At this point in time, the ports are not ready for a move to an administrative WTO [World Trade Organization] arrangement with customs checks on both sides of the border,” Mark Carney, the BoE governor, said on Tuesday, emphasising that this assessment was based on information from ports and logistics companies. He also warned that there were limits to what the government could do to ease the strains on Dover port.

Nor would it help if the UK simply waived new controls until it was ready to implement them, he said. “The issue is if the new standards are applied on the other side. The truck that comes here has to come back.

The truck that goes back empty or has to wait isn’t going to come here in the first place. That’s something you learn in about five minutes [speaking to logistics companies],” Mr Carney told the Treasury select committee. Aerospace and car manufacturers were the most concerned about the impact of no deal on their business.

Giving evidence to MPs on Tuesday, Toyota executive Tony Walker said it would be “very, very difficult for us to cope” with a no-deal Brexit. “Toyota has 50 trucks a day coming through the [Channel] tunnel and hold just four hours of parts. Everything has to be in sequence,” said Mr Walker, who is the carmaker’s deputy managing director for Europe.

Nishma Patel of the Chemical Industries Association told MPs a no-deal Brexit would be “catastrophic” and that 55 per cent of companies in the industry had no plans for that scenario. Peter Newport of the Chemical Business Association said the guidance the industry had received was so broad that “it’s not a helicopter view or a satellite view, it’s a view from the moon”.

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Thursday, 29 November, 2018 A no-deal scenario could jeopardise the supply of the chemical used to provide the odour for household gas, as well as the substance — hydrazine — used in nuclear and gas power stations to prolong their lives, they said.

Re-registering and re-testing all European chemicals for use in the UK in a no-deal scenario could cost up to EUR6bn, said Mr Newport. The BoE agents reported that there was evidence that some freight was being diverted from the Dover-Calais route to ports in the north of England, but that it was unclear whether these had the capacity to absorb all freight if the UK left without a deal. Road haulage companies were concerned about getting the permits necessary for truck drivers to work in the EU.

Warehousing companies reported demand was “the highest it has been for some time” and there were concerns that they were nearing full capacity.

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