The majority of businesses in the UK are not prepared for a no-deal departure from the European Union, the Confederation of British Industry has warned.
The CBI sounded the alarm yesterday (July 28) in its report 'What comes next? The business analysis of no deal preparations', in which it made 200 recommendations in a bid to "help accelerate" no-deal plans for companies in the UK and EU and mitigate any fallout.
The business body collated the report based on "thousands" of conversations with firms across all sectors in the UK, in which it warned even with mitigation 24 of 27 areas in the UK economy would experience disruption if the UK left the EU without a deal on October 31.
The CBI said despite businesses having spent billions on contingency planning for no-deal they remain "hampered by unclear advice, timelines, cost and complexity".
However, the business group commended larger companies in the financial services sector for having "well-thought through" contingency plans in place.
But this did not extend to smaller firms, which the CBI said were less prepared.
Josh Hardie, deputy-director general at the CBI, said businesses were now "desperate" to move beyond Brexit.
He said: "They have huge belief in the UK and getting a deal will open many doors that have been closed by uncertainty.
"There is a fresh opportunity to show a new spirit of pragmatism and flexibility. Both sides are underprepared, so it’s in all our interests."
He added: "It cannot be beyond the wit of the continent’s greatest negotiators to find a way through and agree a deal.
"But until this becomes a reality, all must prepare to leave without one. It’s time to review outdated technical notices; launch an ambitious communications campaign for every firm in the country and rigorously test all government plans and IT systems."
In its report the CBI recommended businesses should have agreed communication plans with government by the middle of October, to allow for "any crisis information sharing".
The businesses body also said companies should prioritise people in the event of a no-deal Brexit, seeking to reassure employees and having communication signed off in advance of a no-deal to send out quickly to a workforce.
Mr Hardie added: "While the UK’s preparations to date are welcome, the unprecedented nature of Brexit means some aspects cannot be mitigated. We can reduce but not remove the damage of no-deal.
"It’s not just about queues at ports; the invisible impact of severing services trade overnight would harm firms across the country."
rachel.addison@ft.com
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