LONDON — The vast majority of British businesses believe that dropping out of the European Union without an agreement would be an unacceptable outcome of Brexit, a new survey from the British Chambers of Commerce shows.
The BCC surveyed 2,400 firms around the UK about their expectations and hopes for Britain’s exit from the EU with only 2% saying that leaving the bloc without a trade deal and reverting to World Trade Organisation rules is a feasible and beneficial outcome for the country.
By contrast, more than one-third of those surveyed said they favoured Britain remaining in the European Single Market, thereby retaining full access to trade with EU countries and businesses.
“Our results make it clear that there are a range of business views on what the UK should be seeking in a final deal with the EU, but there is near-universal consensus that a deep and comprehensive agreement is needed,” Dr Adam Marshall, the BCC’s director general said in a statement alongside the findings.
“‘No deal’ isn’t seen as a viable option. Businesses want a pragmatic settlement on the practical, real-world issues that affect their operations, not arbitrary political red lines.”
Prime Minister Theresa May and Brexit Minister David Davies have continually said that a bad trade deal would be worse than no trade deal in Brexit. They have threatened to walk away from the negotiating table with nothing once talks end in 2019 unless the EU agrees to at least some of its demands.
British businesses are largely in favour of some form of transition period — where Britain has a handful of years to adjust to new rules and avoids a so-called “cliff edge” Brexit — with a combined 68% of respondents favouring some sort of transition. 46% of businesses wanted a transition period of three years, while a further 22% want a transition longer than that.
“By more than three to one, businesses want a transition period on the way to a final agreement with the EU. This is critical to prevent firms facing the prospect of repeated, costly adjustments to new trading conditions,” Marshall said. If companies have to change their business model once in 2019 and again several years thereafter, the competitiveness and investment potential of our firms will be undermined.
“If companies have to change their business model once in 2019 and again several years thereafter, the competitiveness and investment potential of our firms will be undermined.”
The BCC’s findings come just four days after the CBI — Britain’s most powerful business lobbying group — doubled down on its call for a transition period.
In a lecture on Thursday evening at the London School of Economics, Carolyn Fairbairn, CBI director general, and Rain Newton-Smith, CBI chief economist, said the prospect of serious disruption from a “no deal” scenario means businesses are already changing plans and slowing investment.
“Our proposal is for the UK to seek to stay in the single market and a customs union until a final deal is in force. This would create a bridge to the new trading arrangement that, for businesses, feels like the road they are on,” Fairbairn said.