Lack of clarity around the Brexit process is hitting preparations for business after the UK leaves the EU, with only a third of finance professionals in large businesses reporting their organisation has started scenario planning and just 20% of those in small organisations, according to a poll
The Institute of Chartered Accountants of Scotland (ICAS) Brexit tracker survey, conducted with law firm Brodies, is based on a poll of over 600 members of the Scottish institute following publication this summer of the government’s white paper on the future relationship between the UK and the EU.
Around eight out of 10 of the respondents in smaller organisations (below 250 employees) said their organisation has taken ‘no action’ as regards hiring/HR, supply chain/logistics and reviewing contracts.
Of those in larger organisations (250 employees or more), a minority had started scenario planning for hiring/HR (36%), supply chain/logistics (36%) and regulatory change (43%).
Even fewer had so far sought external advice on hiring/HR (21%), supply chain/logistics (16%) and regulatory change (25%).
ICAS says lack of clarity as to what the environment will look like following Brexit Day on 29 March next year could be a factor holding back preparations. Its research found several of the key elements in the UK government’s negotiating position are not well understood by business.
For example, only a quarter (27%) were ‘very or fairly clear’ about what is meant by the ‘maximum facilitation’ arrangement for customs duties, and only 32% had a similar level of understanding about a ‘customs partnership’ whereby the UK would collect EU duties on imported goods bound for customers in the EU.
Similarly only 26% were ‘very or fairly clear’ on what constitutes a ‘common rule book’ covering trade in goods.
The survey found respondents’ preferences regarding the future UK-EU relationship are in line with its earlier findings, with 62% preferring that the UK remains in the single market, 5% preferring the UK to remain in the EU customs union and 26% favouring participation in a UK/EU free trade agreement.
However, regarding what ICAS members expect will actually happen, the number who believe that the UK will reach a free trade agreement with the EU has fallen to 29% from 36% in the autumn 2017 poll, equal to the number that believe the UK will have no free trade agreement (autumn 2017: 29%). The number opting for ‘don’t know’ has doubled from 9% last autumn to 18% this summer.
Bruce Cartwright, ICAS chief executive, said: ‘ICAS members’ concern over the outcome of the Brexit process is understandable, since there would appear to be some fundamental areas of disagreement with only a few months to go.
‘There is, however, a clear shared objective to reach agreement and deliver much needed clarity.’
Report by Pat Sweet
