Nearly one in three British businesses are planning to relocate some of their operations abroad or have already shifted them to cope with a hard Brexit, according to a leading lobby group.
The Institute of Directors (IoD) warned that 29% of firms in a survey of 1,200 members believed Brexit posed a significant risk to their operations in the UK and had either moved part of their businesses abroad already or were planning to do so.
More than one in 10 had already set up operations outside the UK as the prospect of a no-deal Brexit becomes more likely amid Westminster gridlock. Most firms considering a move were looking to open offices inside the #European Union, said the IoD, which represents 30,000 firms.
Edwin Morgan, the IoD’s interim director general, said: “We can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies.
“Change is a necessary and often positive part of doing business, but the unavoidable disruption and increased trade barriers that no deal would bring are entirely unproductive.”
Large companies such as Sony and Panasonic have relocated their European headquarters from the UK to the continent, but the IoD said smaller companies were also enacting plans. Morgan said a surge of smaller firms had activated their plans in the last week.
“While the actions of big companies have been making headlines, these figures suggest that smaller enterprises are increasingly considering taking the serious step of moving some operations abroad. For these firms, typically with tighter resources, to be thinking about such a costly course of action makes clear the precarious position they are in.”
The survey of company directors found that 11% had already executed relocation plans and 5% were planning to relocate in connection with Brexit, while a further 13% were “actively considering” a move out of the UK. Exporters were more likely to consider a move, with two-thirds looking to shift overseas.
Business leaders are becoming increasingly concerned over a build-up of uncertainty while the government attempts to negotiate changes to the Irish backstop, which would keep the UK inside the European customs union in advance of a trade deal being reached.
At the weekend the British Chamber of Commerce (BCC) said thousands of firms were gearing up to move operations abroad or stockpiling goods to combat the worst effects of Brexit. On Wednesday Carolyn Fairbairn, head of the Confederation of British Industry (CBI), Britain’s most powerful business lobby group, warned that businesses were “accelerating” their plans for a no-deal Brexit
“I don’t think there will be a single business this morning who is stopping or halting their no-deal planning,” she said, adding: “I fear they may even be accelerating it.”