One in five European business leaders feel ‘unprepared’ for the UK to leave the EU

Amelia StevensResearch Executive
November 16, 2020, 3:35 PM GMT+0

Most firms say they have had bad guidance on Brexit, if they’ve had any at all

The clock is ticking on a UK-EU free trade deal, with the Brexit transition period set to expire on 31 December. With negotiations running down to the wire, it is no surprise than many British and European businesses feel unprepared for what is to come, according to a recent YouGov survey of 2,110 European business leaders in the UK, France, Germany, Spain and Italy.

One in five business leaders surveyed (22%) say they believe their business to be only “slightly prepared” or “not prepared at all” for the change. This figure is highest in the UK (31% of all firms, rising to 36% among firms that trade with the EU), with the government coming in for criticism for not having provided businesses with enough detail on its plans.

In France, a quarter of firms (25%) don’t feel prepared, rising to 39% among those trade with the UK. It is a similar story in Germany and Italy, where 22-23% of all firms don’t feel ready, rising to 36% of Italian firms that trade with the UK and 34% of German firms with British trading partners.

Spanish firms are the least likely to feel unprepared: 18% of business leaders in Spain say they are unprepared, including 24% of those with trading ties with the UK.

Nevertheless, most business leaders in the UK (58%) and almost half of their continental counterparts (47%) feel “very” or “reasonably” prepared.

Most business leaders say government guidance on the impact of Britain leaving the EU has been poor or non-existent

It is perhaps no surprise that many business leaders feel underprepared for Brexit, given so many feel their governments aren’t giving them the information they need.

As many as 43% of French firms and 40% of Italian ones say they have not received any government guidance at all. This falls to 27% for German and Spanish firms, and 19% for British companies.

Being more likely to have received guidance does not make it more likely that that guidance was positively received, however. Fully four in ten British business leaders (41%) say they received “poor” or “very poor” guidance, compared to 32% who think the advice was “very good” or “reasonable”.

Spanish bosses are similarly likely to say they’ve had low quality guidance (39%), 10 points lower than the 29% who have had decent advice. Italian firms are split 25/26% on the quality of the advice they received, while French and German firms are slightly more likely to think their advice has been good or reasonable (29% and 36% respectively) than poor or very poor (22% and 30%).

Across all countries, it seems that bigger businesses have been getting better advice – while 29% of SMEs say they have received poor guidance, only 9% of large companies say the same.

Business leaders most likely to think a trade deal that closely resembles the status quo will be good for their business

Although the nature of the free-trade agreement between the UK and EU is still to emerge, business leaders in all five countries were most likely to say that one which “broadly ties the UK into EU rules and standards in areas including environmental and workplace standards plus state aid” will have a positive impact on their business. More than six in ten business leaders in France, Germany, Spain and Italy whose firms trade with the UK (62-66%) feel this way.

British business leaders for trade with the EU are markedly less likely to feel the same way, at 46%. This is nevertheless the outcome the most British bosses think would be good for their firms, but only just – 45% also think that “a trade deal which is broadly the same as the current European Union deal with other countries such as Canada or Norway” would have a positive impact on their company. Many continental bosses also feel positive about such an outcome: 56% in Italy, 50% in Spain, 44% in Germany and 40% in France.

In the event that the two sides fail to reach an agreement and end up having to trade on World Trade Organization (WTO) terms, far fewer firms see a positive impact – particularly in Britain, where just 19% think it would be good for business.

That said, almost twice as many business leaders in the continental countries (35-38%) think their firms would do well out of a no-deal Brexit. Overall, relatively few (22-31%) said it would actively be bad for their firms, with most of the rest saying it would have a neutral impact.

It seems that Britain leaving the EU will not have much impact on many firms. Among those European business leaders with international competition, most (52-61%) feel there will be no change in the level of competition they receive from UK companies. Similarly, a majority (54-60%) of those in each European country with international customers think there will be no change in the number of customers they get from the UK.

Likewise, the most common response among European firms who buy goods or services from the UK was that Brexit would have no impact on their buying levels (46-54%).

However, where firms do anticipate a change, on every measure in every country they were more likely to expect a negative change (from the UK’s perspective) than a positive one (i.e. buying less from the UK, fewer UK customers and less competition from the UK).

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