Research carried out by the Institute of Directors (IoD) last month found that 62% of the 750 business leaders surveyed believed having a preferential deal with the EU was very important (38%) or important (24%).
As IoD director general Stephen Martin makes clear, “While the government may be ending free movement as we know it, a preferential deal with the EU on what replaces it simply must be on the table.
“The principle of treating all countries equally is laudable. However, in practice our close geography and interwoven supply chains make continued access to EU talent an urgent matter for British businesses.”
He says that such an approach is not unusual, pointing to the Common Travel Area, the Nordic passport union and the trade accord between Australia and New Zealand.
“Access to our labour market is no doubt attractive to other countries, and it makes sense that this should factor into negotiations as the UK seeks access to the European market. But the prime minister must keep in mind the benefits a deal would bring British firms too.
“The EU is not only our largest trading partner, but also the place where IoD members report the most recent export growth for their business. It’s also where they are most likely to begin their exporting journey,” Martin adds.
While most business leaders are keeping their fingers crossed that the government can negotiate a softer Brexit, an increasing number of them are being pragmatic and making preparations for no deal at all.
Although the level of those feeling “very” prepared for a no-deal Brexit remains unchanged since December last year, at 14%, there has been a slight rise from 34% to 41% in the numbers who now feel “somewhat” prepared.
Similarly, there has been a slight pick-up in contingency planning since May. The survey found there were fewer directors contemplating not bothering to make contingency plans (down 12 percentage points to 37%). Only 8% had actually implemented such plans.
Martin finds businesses’ state of unpreparedness worrying. “It goes without saying that a no-deal outcome would have a significant impact on many businesses, and as crunch time in the negotiations is looming, our politicians must work hard alongside the EU to avoid it,” he says.
“The truth is still, however, that firms must be ready for a range of possible outcomes. We’ve seen an uptick in preparations – but there’s still a long way to go.”