The Confederation of British Industry said in a report Monday that the effects of a “no-deal” Brexit would be felt for years, despite the best planning to mitigate the worst of it.
The organization published a plan to help prepare Britain and the European Union in case no deal is reached by Oct. 31. The possibility of a no-deal Brexit increased after the Conservative Party elected Boris Johnson as its new leader and Britain’s prime minister this month, replacing Theresa May.
Johnson had promised to withdraw Britain from the EU with or without a deal but added he wanted to renegotiate the current deal, which has been repeatedly rejected by the British parliament.
The CBI compiled more than 200 recommendations for reducing the impact of no-deal Brexit, gathered from local trade associations and businesses. The report said, though, that it still may not be enough.
“While there are actions that will make a difference, even if every one of these recommendations were implemented, the long- and short-term impacts of no deal are still of great concern,” the report said. “Having mapped all 27 of those areas over time, the CBI has concluded that many of the consequences of no deal will be felt for years to come — acting as a self-inflicted drag on the UK’s economy for the next decade and more.
“The only way to avoid the negative consequences of no deal on jobs and livelihoods is to strike a deal with the EU,” it continued.
CBI’s director general Carolyn Fairbairn warned the short-term effects alone would be “severe.”
“Thousands of services firms will simply be legally unable to fulfill their obligations to their customers across borders — though many large regulated companies have made the changes they need to in order to mitigate no deal, it is prohibitively expensive for many small firms to do so,” Fairbairn said.
“Meanwhile, no deal will mean everything from trucks crossing the Irish border to the free flow of data will be mired in legal uncertainty. The [International Monetary Fund] estimates that, in the long term, no deal could knock 8 percent off the level of UK GDP compared to remaining in the EU. Trade barriers will become permanent, removing a key to the UK’s attractiveness as a place to create jobs.”
The report said that Britain could improve its readiness by creating a plan for business engagement, update technical notices and Brexit readiness, start a targeted communications campaign, provide transparency in government readiness and scaling up critical IT systems.