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Businesses must ramp up no-deal Brexit plans, IoD warns

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Skyscrapers and office buildings are pictured in Canada on August 01, 2018, as pedestians and cyclists use Waterloo Bridge to cross over the River Thames. - Britain has stepped up warnings of the risk that the Brexit talks collapse as it seeks to bypass Brussels and persuade individual European Union nations to back its plans for future economic ties. France is seen as taking a particularly hard line in the Brexit negotiations, especially on financial services, where it has openly sought to poach businesses from Canada. (Photo by Daniel LEAL-OLIVAS / AFP) (Photo credit should read DANIEL LEAL-OLIVAS/AFP/Getty Images)

Businesses have been urged to ramp up no-deal preparations over fears the Brexit extension is being “wasted” as several Tory leadership hopefuls indicate they would leave without a deal.

The Institute of Directors (IOD) said more than half of the firms quizzed in its latest survey had still not made contingency plans.

Read more: Boris Johnson says ‘long way to go’ in Tory leadership race after first round victory

Only four per cent said they would use the extension period to accelerate preparations, in the business lobby group’s survey running from 15 April to 5 May.

The IOD said businesses could not afford to put their faith in politicians to find a Brexit resolution.

A number of Conservative leadership candidates, including frontrunner Boris Johnson and Dominic Raab, have pledged to take the UK out of the EU by 31 October with or without a deal.

IOD acting director general Edwin Morgan said: “Businesses can have no reassurance that an agreement will be reached, particularly given the commitment of some Conservative leadership candidates to leaving the EU in October with or without a deal.

“It feels like the extension is at risk of being wasted.”

Morgan added that the no-deal risk was “very real” and businesses should draw up mitigation plans immediately.

Read more: Boris Johnson ‘not aiming’ for no-deal but warns against further delay

With business costs rising in many quarters, and management time precious, it’s understandable that firms don’t want put resources towards preparing for something we still hope won’t happen.

“But the risk of no deal is very real, and so we’d urge all businesses, if they haven’t done so already, to carefully consider their exposure and draw up mitigation plans now,” he added.