Ed Balls, the ex-Shadow Chancellor for the Labour Party, is part of the team who have released a new report on the Brexit deal – ‘Deal or No Deal?’. The report is published by Harvard Kennedy School and focuses on the impact of Brexit on small and medium-sized (SME) British businesses.
Previously we discussed separate research into what a No Deal Brexit would mean for SMEs in London and the South-East. That analysis suggested that around 7,900 companies based in London would fail. This latest report provides a greater depth of understanding into the various deal scenarios through 180 interviews of 120 SMEs.
Overall this latest report states: “The vast majority of businesses want to remain in the EU, or to see the Brexit negotiations result in a future relationship that facilitates frictionless trade, access to skilled and unskilled labour and aligned regulation.”
Summary of the report’s main findings:
- The key conclusion of the research is that for a ‘vast majority’ of businesses a ‘No Deal’ outcome would be the worst possible outcome of the Brexit negotiations.
- ‘Blind Brexit’, where the UK leaves the EU without any definite permanent deal in place, is seen as the next least desirable result.
- Many smaller companies lack the resource for sufficient scenario plans.
- There are already signs of the negative impact which uncertainty about the final negotiation deal is having and this would increase with a ‘Blind Brexit’.
- Most businesses ultimately want a ‘closer relationship’ with the EU than the current plans proposed by the UK government.
- The majority of businesses prefer to remain in the EU with the next preferred option being one where the UK remains part of both the customs union and single market – dubbed the ‘Norway-plus model’.
- In preference to No Deal, firms would prefer a ‘Canada-plus model’ where there would not be any single market rules to follow.
All this suggests that, unsurprisingly, from a business point of view frictionless trade, access to labour and aligned regulations are the key requirements for a best possible Brexit negotiation outcome.
Our expert lawyers top 7 Brexit Proofing tips
1. Review contracts – review your existing key contracts, ensure flexibility and include express provisions for potential changes to the likes of costs caused by no deal.
2. Contract-terms – expressly state whether one party or the other can terminate the contract based on the Brexit outcome.
3. Map your supply chain – document and classify it and set up preliminary contingency planning.
4. Contact the specific government agencies for your industry (e.g. Department For Environment, Food, Rural Affairs and Agriculture) to get up to date relevant advice for your business. You should also speak to the equivalent in the other countries you operate in.
5. Customs systems – ensure your employees are familiar with the terminology required for more complicated customs systems. For smaller companies, you may want to consider outsourcing to a specialist third-party to ensure your compliance with any new regulations.
6. Get your trademarks protected before the end of any transition period to ensure coverage in both the UK and the EU. The application to registration process normally takes 4 to 6 months to complete.
7. Keep an eye on our blog for the all the Brexit latest and what it means for SMEs.
Make sure you’re prepared
We would advise that businesses take these points into consideration when considering their plans and budgets for dealing with Brexit, as well as keep a watching brief on how matters develop between the UK and the EU.
The author of this article is LawBite’s Michael Jaiyeola. This content is not a substitute for professional legal advice. To speak to us about Brexit preparations for your business or any other legal matter please do enter an enquiry for a free 15-minute legal consultation. Alternatively our friendly Client Care Team today are ready to help you with your business legal advice issue on 020 7148 1066.