British businesses have already started setting up shadow units on the continent and shifting investment to the other side of the UK border in Ireland, according to a new report on Brexit from Britain’s leading business lobby group.
The British Chambers of Commerce (BCC) found that companies are growing increasingly concerned about the impact on their business from Brexit, and are already taking action to guard against it.
In a report based on a survey of its members, the BCC found that in the face of Brexit uncertainty, “a minority of companies have even taken mitigation strategies, such as setting up new receiving companies or their own logistics infrastructure on the continent, in order to ensure the same level of service to their customers and suppliers.”
It also said that some businesses “reported instances of scaling back investment in Northern Ireland and shifting investment to the Republic of Ireland.” It added: “Some companies are already exploring setting up production in the Republic of Ireland and other EU countries.”
The report, released in full later, is likely to cause concern in the Treasury and the Brexit departments, which are engaged in a long process of discussions with businesses about how best to manage the departure process.
It underlines the degree to which businesses are taking early steps to shift activity out of the UK. Although recent statistics suggest the economy remains strong, business investment has started to weaken, and some economists suggest this weakness will worsen in the coming months and years.
The BCC concluded that its members remained particularly concerned about the impact on the labour market, with clarity needed about who they could hire – and a call to guarantee residency rights for existing EU workers.
It urged the Government to push for a trade deal with as few barriers as possible, as well as ensuring the continued harmonisation of UK product regulations with those of the EU.
Its members also expressed some concern about “the capacity for HMRC and the Border Force to deal with any changes to customs arrangements”, raising the spectre of long queues and delays getting goods in and out of the country.
They added that they needed more action from the new Ministry for International Trade, saying the “current trade mission programmes are too small and slow – and focus too much on ministerial deal-signing rather than supporting businesses on the ground.”
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Source: Sky News