Act now to stop companies moving jobs for Brexit, businesses urge Government
Most businesses have held off so far, but 11pc are acting already, according to a survey from the Institute of Directors (IoD).
The most common of those contingency plans include setting up subsidiaries in other EU countries, and postponing big investment projects.
That means Britain could be losing jobs and business activity across the Channel unnecessarily, as companies cannot yet know what Brexit will actually entail.
The IoD has urged the Government to give businesses more information so that they can adjust their plans with a better idea of the end result of the negotiations.
“Uncertainty over the UK's future trading status with the EU continues to rank among companies' top concerns. While businesses are preparing for Brexit, most have not made any concrete changes yet, so there is still a window of opportunity for the Government to convince them to hold off triggering contingency plans,” said the IoD’s director general Stephen Martin.
“Some changes and costs are inevitable no matter how we leave the EU, but the more information the Government can provide on the process of Brexit, the more companies will be reassured they do not have to jump to relocate staff or operations.”
The survey found that 30pc of firms have started to study the impact of different scenarios and to plan for them but have not implemented those plans.
Another 16pc expect to undertake contingency planning but have not yet done so, while 33pc do not expect to engage in scenario and contingency planning.
The IoD’s survey also found that a large proportion of firms do not fully understand what it would mean if the UK and EU traded using World Trade Organisation rules.
It found 9pc do not understand the implications at all, 23pc do not understand it well, 40pc “somewhat understand” what a move would mean, and 19pc do fully understand it.
“Given the need for businesses to be able to adjust to trade and migration-related changes, bridging arrangements to any new free trade agreement, and a phased implementation of that agreement, are essential,” said Mr Martin.
“We do not expect the Government to reveal its negotiating strategy and recognise that it is not within their gift to deliver full clarity and certainty now. However, we need to have a full and frank discussion with all negotiating parties on what transition looks like, well in advance of March 2019.”