Brexit border delays could lead to wave of bankruptcies
Even just half-hour delays at UK ports and the Irish border post-Brexit could lead to a wave of British firms going bankrupt, new research warned on Wednesday.
An extra two minutes of checks in a Brexit no-deal scenario could lead to 30 minutes delays and cause one in 10 UK firms to go bankrupt, was one finding of a survey by the Chartered Institute of Procurement and Supply.
John Glen, economist at CIPS, said: “It’s such a potential car crash. Common sense has got to prevail. We need to have a two-year transition period and to get something sorted out during that. The idea of day-one no-deal is just crazy.”
“The UK economy could fall of a cliff on Brexit day if goods are delayed by just minutes at the border. Businesses have become used to operating efficiently with exceptionally lean, frictionless supply chains, where quick customs clearance is a given. Customs delays would not only affect businesses but would also lead to a shortage of products on shelves and an increase in prices for consumers as well,” he added.
Companies warning of the risks of crashing out of the EU without a deal include Next, Honda and Jaguar Land Rover, who are already preparing for the worst case scenario.
Jaguar Land Rover recently cut staff working hours, while Honda has said a no-deal Brexit could add 60,000 extra pieces of paperwork for imports and exports to the UK and cost the firm tens of millions of pounds.
Around 4% of firms are already stockpiling goods, fearing the border delays and the CIPS found that around a quarter of UK businesses plan to do so.
Border delays, tariffs on imports and other trade barriers could risk an economic meltdown since businesses are used to frictionless trade across the border. The disruptions in trade could cost the economy around £1bn per year, said economists at Oxera earlier on this year.