UK government warns firms of Brexit crunch, with just 25% ready

Edmund Heaphy
Finance and news reporter
A significant proportion of UK firms are not prepared for the end of the Brexit transition period. Photo: Kirsty Wigglesworth/AP

The UK government on Monday launched an advertising campaign to alert firms to step up their Brexit preparations, the same day that new research revealed that only 25% of them are ready for the end of the transition period.

The “UK’s new start: Let’s get going” adverts — which will appear on TV, radio, and on the internet — will also alert other groups, such as holidaymakers, about post-Brexit changes.

On 31 December, the UK will leave the European Union’s single market and customs union, introducing a series of hurdles for firms whose businesses rely on access to the bloc.

But just one in four companies are prepared for the end of the transition period, according to a survey conducted by the Institute of Directors.

READ MORE: UK launches adverts to alert holidaymakers of post-Brexit changes

Around half of respondents said that they were not currently in a position to implement the necessary changes, while around one-third reported they would only be able to start preparations once the nature of the UK’s post-Brexit relationship with the EU is clear.

The second week of “intensified” trade negotiations with the EU last week failed to break the Brexit deadlock, with the bloc’s chief negotiator warning that “significant divergences remain” between both sides.

Michel Barnier told other EU stakeholders in a communique that “inevitable disruptions” will occur after the Brexit transition period ends on 1 January even if a trade agreement is reached, referencing the imposition of customs checks, trade in services, and changes to travel arrangements, among other things.

But more than two-thirds of UK firms said that securing a trade deal was important for their businesses.

Cautioning against a crash-out of the bloc, the Institute of Directors said that a phased implementation of any new trading relationship would be preferable.

“With so much going on, many directors feel that preparing for Brexit proper is like trying to hit a moving target. Jumping immediately into whatever comes next would be a nightmare for many businesses,” said Jonathan Geldart, director general of the institute.

But Cabinet Office minister Michael Gove said that the UK will be leaving the single market and customs union “regardless of the type of agreement we reach with the EU.”

“This will bring changes and significant opportunities for which we all need to prepare,” he said.

READ MORE: UK government to spend £4.5m on ‘shock and awe’ Brexit ad campaign

Last month, it emerged that the UK government had signed a £4.5m ($5.6m) deal for a public information campaign to use “shock and awe” tactics to prepare citizens and firms for the end of the Brexit transition period.

The campaign, devised by media agency MullenLowe London, is set to warn about “the consequences of not taking action” ahead of 31 December.

During July and August, the campaign aims to “inform” about the consequences and “nudge” residents into taking action now.

But from September, the campaign will move into what a tender document called the “shock and awe” phase, using terminology typically used in military settings to describe overwhelming power and spectacular displays of force on the battlefield.

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