There’s been no easing back in gently for MPs returning to parliament this week, or for any of us in business preparing for Brexit. While we still don’t know with any certainty what the outcome of the latest political developments will be, we do know that a no-deal exit from the EU is still the legal default, and the path to changing that are complex and fraught with political hurdles. With less than two months before the UK is due to leave the EU, there is no room for complacency. It is always tempting to wait until the next political date to make commitments, but businesses need to tune out the noise, and press on with their no-deal planning until something else is agreed with the EU.
I get the sense that there is now heightened awareness around the risk of no deal, but many organisations are not as prepared as they could be and urgently need to take action. Our ‘no regret’ decisions set out the key areas organisations should be prioritising as they put in place meaningful plans to preserve the continuity of their business in the short term from 1 November. Preparing for the future border and supporting your people are both critical, but it’s not enough to just get your own house in order. Businesses also need to engage externally with their customers and across supply chains.
Another of our ‘no regret’ decisions is to take advantage of existing government schemes to support your preparations. Behind the scenes of the political drama this week, the government has been pressing ahead with planning to ensure the country is as ready as it can be for a potential ‘no deal’ exit. With the launch of the ‘Get ready for Brexit’ campaign, new resources and funding streams are being made available to business. For example, a second wave of the Customs Intermediaries grant scheme has been announced, with a £16 million investment to support businesses prepare for trading post-Brexit.
However, some of the second order impacts of a no-deal Brexit are unknown, and with a range of political scenarios still in play, central to any planning will be clearly defining triggers for implementing contingency actions. Businesses won’t be able to mitigate everything, but having a strong understanding of the risks, and open channels of communication with key stakeholders, means they will be better able to respond tactically and strategically to potential challenges. Agility and team working beyond traditional organisational boundaries will be key.
Readiness in March is not readiness in October. Businesses who were prepared for a no deal exit in March this year will likely need to rework of those preparations. Exiting on the 31 October brings new challenges. For example, the closeness to Christmas brings difficulties for retailers, while a Thursday exit rather than Friday is challenging for financial services. I know that, with two exit dates already been and gone and further extensions mooted, mustering the energy for planning for another exit date is a challenge in itself. But all businesses must be ready for a no-deal exit on 31 October.
While planning for the short term implications of no deal must now be the priority, however the UK ends up leaving the EU - deal or no deal - longer term uncertainty abounds. If the UK leaves with a deal that will mean a transition period, but this isn’t the case with no deal. Longer term questions about the UK’s relationship with the EU will still need to be addressed. Businesses should be considering how they can respond to the continued uncertainty of the negotiations of the future relationship, as well as political disruption domestically and the longer term shifts in trade globally.
Keeping your sights on the longer term horizon is important, but in the short term, no-deal planning must be the priority.
Partner, PwC United Kingdom
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