The Institute of Directors says its members have failed to take advantage of seven-month delay

Britain’s businesses are being urged to step up their preparations for a no-deal Brexit amid signs that Theresa May’s successor could be prepared to leave the EU without a deal at the end of October.

The Institute of Directors – one of the UK’s employers’ groups – said its members had so far failed to take advantage of the seven-month delay to Brexit and warned that companies should not put faith in politicians to produce an agreement.

The IoD produced figures that showed less than half of businesses had Brexit plans, and said firms should be considering all reasonable preparations for no deal.

Some Tory candidates for prime minister – including the frontrunner, Boris Johnson – have said they would be prepared to leave the EU without a deal but an IoD survey of almost 1,000 companies found the proportion that had activated contingency plans between January and April rose from 18% to only 23%.

Only 4% of those questioned said they would be using the extension period to pick up the pace.

Edwin Morgan, the IoD’s interim director general, said: “This week’s vote won’t be the last twist in the Brexit saga but it made clear how real the possibility of no deal is. Business can have no absolute reassurance that an agreement will be reached, particularly given the commitment of some Conservative leadership candidates to leaving the EU in October, with or without a deal. It feels like the extension is at risk of being wasted.”

The IoD said there had been very limited financial support from central government for small businesses to prepare, despite repeated calls from the employers’ group for Brexit planning vouchers to help small and medium-sized enterprises (SMEs) receive professional help for complex trade and legal issues.

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Morgan said that getting a deal would be “by some distance” the better outcome, adding that it would prolong the uncertainty if Britain had to trade with the EU on the same World Trade Organization terms as countries such as China and the US.

“If businesses can’t have faith in politicians that means they have to look out for themselves. With business costs rising in many quarters, and management time precious, it’s understandable that firms don’t want to put resources towards preparing for something we still hope won’t happen. But the risk of no deal is very real and so we’d urge all businesses, if they haven’t done so already, to carefully consider their exposure and draw up mitigation plans now.”

Speaking on Thursday, Tesco’s chief executive, Dave Lewis, said it was harder for supermarkets to prepare for a no-deal exit from the EU in October than it was in March because they will be storing more products for Halloween and Christmas in their warehouses, leaving limited space for Brexit stockpiles.



“October will be much more challenging than March was,” Lewis said. “We’ll be coming out of Halloween and building stock for the Christmas peak, so the capacity in the supply chain will be much more challenging. It’s about sheer physical capacity. It’s not just the availability – it’ll be the space.”