Labour says businesses need clarity as half not prepared for Brexit

Ed Miliband has declared that “businesses desperately need clarity” on post-Brexit arrangements as a new report has found that almost half are not prepared for the transition period coming to an end.

Responding to the publication of a report by the Institute of Directors today, the Shadow Business Secretary has stressed it is “vital that Boris Johnson delivers the oven-ready trade deal he promised” during his general election campaign.

The research released found in its survey of company directors that 45% of all businesses were not ready for Brexit, with 24% telling the organisation that they are not sure they will be prepared by the end of the year.

Commenting on the challenge facing UK companies, Miliband said: “Businesses are experiencing extreme uncertainty, facing the pressures of the coronavirus crisis, a deep recession and the end of the transition period approaching.

“It is vital that Boris Johnson delivers the oven-ready trade deal he promised was ready and then answers the questions so many businesses are asking about the future arrangements they need to plan for.

“Businesses desperately need clarity to prepare for the future – and at the moment, with less than three months to go, many sectors are not being given the level of detail they need.”

The report also found that over half of all those surveyed, 54%, think that the coronavirus pandemic will “exacerbate/magnify a no-deal outcome” in the trade negotiations currently ongoing between the UK and the EU.

Miliband added: “To help them survive in the here and now and protect jobs, businesses across the country must also have access to the economic support they need as public health restrictions tighten to help tackle the virus.”

Labour slammed the government for “short-changing businesses and communities across the North” on Thursday and argued that the vast majority of businesses in areas under Tier 2 and Tier 3 Covid restrictions will receive insufficient support.

Commenting on the combined impact of Covid and Brexit, Institute of Directors’ Allie Renison said: “The prospect of no deal would be daunting enough, let alone dealing with it in the middle of a global pandemic.”

The senior policy adviser added that “these disruptions won’t cancel each other out”, and warned: “Reacting to the pandemic has taken up so much of business leaders’ time and energy throughout the year…

“Brexit adjustments will further add to businesses’ cashflow challenges in the months ahead. The government must look to how it can smooth that process.

“Financial support as seen in other countries, whether through vouchers to help access advice or through extending tax reliefs to facilitate that adjustment, would give small firms a much better chance of coping.”

Analysis published by Labour has highlighted that small businesses forced to shut under the most severe level of Covid-19 measures will receive at most £500 a week of funding from local restrictions support grants.

As a result of changes to government financial aid announced by the Chancellor, this is significantly less than the average £1,666 a week that the same companies received in similar state support during the initial lockdown earlier this year.

Labour’s Rachel Reeves warned earlier this month that the government’s approach to negotiations with the EU is adding to the challenge of the coronavirus pandemic for many sectors across the country.

The Shadow Chancellor of the Duchy of Lancaster argued: “Following the ninth round of scheduled talks, it’s vital that the Tory government and the EU intensify efforts to deliver the oven-ready deal that was promised.”

There are a number of issues outstanding in the negotiations, including the level of access for EU fishing vessels to UK waters. EU leaders sent a letter to Johnson on Thursday, telling the government it must accept the EU’s conditions.

The Prime Minister has declared that he will make a decision today, as the current summit with the European bloc comes to a close, on whether there are grounds to continue the talks.

The transition period is set to conclude on December 31st. Johnson told voters that would deliver an ‘oven-ready’ deal during the general election campaign as part of his pledge to the electorate to ‘get Brexit done’.

The Conservative government signed the withdrawal agreement with the EU in January this year but has since brought forward the controversial internal market bill, which intentionally overwrites sections of that agreement.