Business in Wales unprepared for the effects of a no-deal Brexit says Federation of Small Businesses

New figures from the Federation of Small Businesses (FSB) on levels of business preparedness among SMEs for a no-deal Brexit have revealed that 42% of firms in Wales think that a no-deal Brexit will have a negative impact on their business.

This is compared to 19% of Welsh businesses who think it will have a positive impact and 31% who think there will be no impact at all.

FSB’s survey also found that only 17% of businesses have currently undertaken any planning for the possibility of a no-deal Brexit, whilst a further 37% of businesses have not yet planned but think that Brexit will impact upon their business.

Commenting on the research, Ben Francis, FSB Wales Policy Chair, said:

“With the narrative on a no-deal Brexit changing on a daily basis, this makes concerning reading for the business community in Wales. There are 250,000 SMEs in Wales who provide jobs and wages to over 700,000 people and generate £48bn in sales every year.

The ability of our SMEs to weather a no-deal Brexit is critical for the onward success Welsh economy.

 “UK and Welsh Governments can help businesses be in the best position possible to prepare for the potential of a no-deal Brexit through organisations such as Business Wales providing guidance and advice to SMEs, and this data also makes clear the need for engagement to be significantly stepped up.

With just over 6 months to go, businesses must be supported to plan for Brexit and what it means for their business.”

 In Wales, 31% of those who felt that they would be affected by Brexit also felt that they might postpone major business decisions or innovation as a result. 24% said they would decrease investment, 26% stated they would cut staff or expenditure, 17% stated they would increase their reserves of working capital or build up a reserves account, and 18% stated they would stockpile inventory.

However, 19% of businesses stated they would seek to grow their domestic business (e.g. taking advantage of import substitution opportunities), 9% stated they would seek to grow exports to non EU countries and 12% stated they would invest in upskilling themselves and their staff.

Ben Francis added:

“The numbers of businesses considering postponing business decisions, innovations or investment demonstrates just how crucial it is that UK and Welsh Government work together to provide the clarity that businesses need to chart a way forwards.

 “One first step would be to roll out the Welsh Government’s Brexit portal as a matter of urgency in order to effectively advise and signpost and give businesses the time to utilise it to support decision making and take action.

 “With each release of the UK Government’s technical notices, we get a clearer picture of how dangerous a sudden no-deal Brexit might potentially be for our small businesses.

The UK Government must consider what it can do to translate these notices to make them more understandable and accessible for these businesses.

 “What the technical notices have highlighted is the risk in particular to exporting and importing small firms which will be hit with additional cost burdens and complicated levels of compliance that will be complex to handle.

We therefore want to see UK Government working harder to provide businesses with as much information and support possible to plan for a no-deal Brexit.”