The Institute of Directors released a survey on Friday showing that one-third of its members expect to shift operations abroad after Brexit – and the proportion is two-thirds among those with an EU-facing export business.
Around 16 per cent of the 1200 company directors surveyed have already triggered relocation plans or are close to doing so, and another 13 per cent are actively considering it.
Meanwhile, the trade body Luxembourg for Finance reported that 48 financial institutions – banks, insurers, asset managers and payment services providers – had publicly announced a Brexit-fuelled relocation to Luxembourg. A number of others had shifted without making their plans public, the lobby group said.
On the domestic front, the January edition of the Purchasing Managers Index, released on Friday, showed that supply-chain worries were prompting companies to stockpile goods in warehouses at a record rate, with inventories accumulating at the fastest pace in the survey’s 27-year history.
Companies arestockpiling their own products, to try to meet contracted demand, and also their inputs, fearing supply-chain disruptions on roads and ports in a no-deal Brexit.
Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, reminded a press conference last week of a statistic from Honda’s UK operation: to hold just nine days’ worth of inputs from its supply chain, the car maker would need a warehouse of 300,000 sq m – which would be one of the largest buildings on earth.
The public mood is also shifting gear, settling into preparation mode amid much talk of consumer stockpiling.
“Some people are stockpiling hysteria; I’m stockpiling optimism,” journalist Camilla Tominey said onQuestion Time, the BBC’s equivalent ofQ&A.
The program’s live audience usually cheers the anti-Brexit line, but one punter got loud applause when he said: “There will be some disruption, but we’ve got companies and corporations who have already found ways not to pay taxes in this country – are you telling me they are not going to find a way to get a few lettuce from Spain to England?”
The government has warned local authorities they may need to be flexible about the menus for hot school lunches if there are food shortages, according toThe Guardiannewspaper – the latest in a growing flurry of stockpiling scare stories that could well become a self-fulfilling prophecy.
Both Britain and the EU have stepped up the tempo of announcements and guidance for business about what to expect from a no-deal Brexit.
Financial regulators have whipped up an accord for Britain’s £7.7 trillion ($14 trillion) asset management industry, ensuring that fund managers can continue to oversee portfolios from London even if the fund is domiciled and regulated in the EU.
The previous slow progress of negotiations had reportedly prompted many fund managers to start planning the relocation of portfolio managers to New York, because the US already has a similar deal with the EU.
The European Commission on Friday issued a provisional regulation on aviation safety certification, to prevent disruption to flights between Britain and the Continent. And it has reportedly given British airlines a seven-month grace period to restructure their ownership to ensure majority EU control.
The EU also set out its new visa requirements for Britons, which contained a footnote on Gibraltar – describing it as a British colony – that triggered a fresh bout of cross-Channel controversy and ill-will over the contested territory.
The British government released a slew of no-deal Brexit planning information on Saturday (AEDT). Businesses, charities and universities were told how to apply for continuity funding from the British government to cover the loss of grants from the EU. Business was also notified of a new public procurement process to replace Britain’s involvement in the EU-wide tendering system.
The government also confirmed that in a large number of areas, red tape and regulatory compliance or approvals carried out in Britain – whether in labelling, safety certification, or company auditing and reporting – would no longer be recognised in the EU.