As Boris Johnson strives to take the UK out of the EU on Halloween, many companies are suffering from Brexit fatigue, with some smaller businesses even wondering whether they need to prepare.
The UK was originally meant to leave the bloc on March 29, and then April 12, so October 31 will be the third time of asking — and the prime minister insists it must happen, with or without a deal.
But some smaller companies are not convinced, in what could be a setback for the government’s efforts to get business ready for Brexit.
“Its like studying for an exam you don’t know if you will need to take. You don’t know what you are preparing for now — deal or no deal,” said Chris Wolfe, director of Southeast Flowers, a flower wholesaler based in Ashford, Kent. “Or is it no Brexit at all?”
Business confusion stems partly from how parliament this month approved a law aimed at averting a no-deal Brexit on October 31. The law requires the prime minister to seek a Brexit delay until January 31 if he does not secure a withdrawal agreement at an EU leaders’ summit next month and gain parliamentary backing for it or a no-deal Brexit by October 19.
Rowan Crozier, chief executive at Brandauer & Co, a Birmingham manufacturer of components for several industries, said: “Is [Brexit] going to happen this time or not? Some are saying we were ready before and it didn’t happen.”
The apprehension of companies over different Brexit possibilities has been exacerbated by the split in business ranks about what is the best outcome.
In an Institute of Directors poll of members, a slim majority said a no-deal Brexit would be the most negative, but almost a third stated that further delay to the UK’s departure from the EU could have a worse impact.
Data published by industry trade bodies have warned that business was still far from ready for a no-deal departure, even if companies are generally better prepared than in March.
In separate surveys, the IoD and the employers’ group CBI found that smaller businesses were less likely to be fully prepared than larger companies.
A majority of distribution companies are not ready to trade with the EU in a no-deal Brexit, according to a survey by the Chartered Institute of Procurement & Supply. The same poll found that one-fifth of companies have imported Christmas stock early to avoid the risk of not being able to do so because of border disruption after October 31.
“We are rammed to the gunnels,” said John Nollett, chief executive of Pressmark, a metal pressing company in Atherstone, Warwickshire. “It’s a guessing game of how much stock we need but we are looking at a worst-case scenario. It’s frustrating and costly. We didn’t do the investment we wanted as that money instead went into the stock.”
Other companies are looking to stockpile, but they are constrained by how warehousing space is limited because inventories are already swollen by preparations for Halloween and Christmas.
This is having an impact on retailers, for example. Giles Hurley, chief executive of Aldi, said there were “some elements of stockholding within the business”, pointing to kitchen staples such as chopped tomatoes and olive oil.
“There is clearly a limit to what we can do,” he said. “I can’t guarantee that there won’t be shortages on some products, nor can anyone else in the industry.”
Pharmaceutical groups, which rely heavily on mainland Europe for drugs, have stockpiled, with GlaxoSmithKline, Switzerland’s Roche and France’s Sanofi reporting weeks or even months of extra supplies.
Financial services groups mostly said their Brexit preparations were complete, but there has been concern from regulators that banks have not yet moved assets needed for capital purposes in the event of a no-deal departure.
Some sectors expressed grievances with the government’s Brexit plans. Miles Beale, chief executive of the Wine and Spirit Trade Association, complained that the industry faced additional costs of up to £70m because the government had dropped a previous proposal under which companies would not face additional paperwork when importing wine for the first nine months after Brexit.
Despite the government’s attempts to spread the message about what businesses need to do to prepare for Brexit — including a £100m advertising campaign and a £10m fund to support trade associations — some companies said information was still lacking about sector specific rules.
A study by the British Chambers of Commerce showed that 31 of 36 business-critical areas still lacked sufficient government information to plan thoroughly for a no-deal departure.
One government official admitted that information covering all Brexit eventualities could not be published for companies but added that he was “reasonably optimistic” that most businesses were as ready as they needed to be.
Large companies were no longer a concern given their efforts so far, while smaller businesses were less prepared but better than some surveys suggested, added the official.
For the companies that have done what they can to get ready for Brexit, they are left with a nervous wait until October 31.
Tim Rundle-Wood, founder of online retailer Twoodle, has moved as much sourcing into the UK as possible and taken a business loan to provide a financial cushion if needed. “I am definitely more prepared than in March, so it’s just the uncertainty now,” he said.
Additional reporting by Jonathan Eley, Cat Rutter Pooley and Donato Manchini