August 30, 2018 Deal or no deal: Be prepared
For or against; fed up with all the discussions or still feel you are lacking in information: whatever your outlook it is hard to avoid the topic of Brexit. Even if you see yourself as a purely UK entity, such is the nature of international trade nowadays that there will be some part of your business which will be affected by the eventual outcome of negotiations.
With that in mind, and with the requirement for directors to continually review potential risks to the business, how far should organisations go in preparing for Brexit? After all, the countdown clock has reached the seven month stage and that doesn’t give a lot of time to potentially renegotiate the business model.
Admittedly there will be a transition period to allow businesses time to adjust to the new regime. However, that doesn’t mean organisations should simply sit back and wait. Nor, however, does it mean that businesses should chase every rumour and expend vast resources in planning for every conceivable outcome. Either way risks long term business viability.
So what are the options? Recognising the dilemma facing business, on 23rd August the Government published the first in a series of papers [1]outlining the likely scenario in the event of a no-deal Brexit. Covering a number of areas including workplace rights, product labelling, and importing & exporting; the papers aim to draw together technical notices and updates on the current level of negotiation in order to “ensure the smooth operations of business, infrastructure and public services and to minimise any disruption to the economy.” It is envisaged that further papers will be issued covering other business issues and sectors.
Whilst welcoming the move the CBI has called on the Government to treat these technical notices purely as a starting point in providing assistance to business. Commenting that “Smaller businesses in particular will need a one-stop-shop where they can get the information and support they need to better understand the issues they would face” the CBI has highlighted the challenges facing smaller businesses which may not have the resources to adequately assess probable outcomes and actions.
Echoing the CBI’s comments the FSB has also called for the notices to be followed up “with guidance that every small business owner can understand.” Highlighting the vital nature of the transition period in the event of a deal, the FSB also comments on the potential vulnerability of smaller firms should they be faced with a “cliff-edge moment” in the event of a no-deal Brexit.
[1] https://www.gov.uk/government/collections/how-to-prepare-if-the-uk-leaves-the-eu-with-no-deal
