No-deal Brexit and how businesses are planning for it

We’re still no clearer on what will happen on 29 March when the UK is set to leave the European Union.

The prime minister doesn’t seem any closer to getting a deal finalised and leaving without one remains an option.

If that happens it means the UK would leave the EU and cut ties immediately, with no agreement at all in place.

Some economists warn that it could mean businesses have to pay more to send their products to countries in the rest of EU.

The government says it’s planning for a no deal and told businesses to do the same.

Radio 1 Newsbeat has been chatting to people who run their own companies to find out if they’re preparing.

‘Keeping things local’

Harvey Hodd is 23 and runs Matcha Works with his friend Rory Jeffries.

They’re a range of iced lattes containing matcha green teas with plant-based milks, including almond, coconut and oat milk.

Harvey says the main thing they’re trying to do is keep everything they do in the UK.

“A lot of manufacturing, especially for beverage companies, is in Europe or further afield.

“We had an option of working with a manufacturer in Austria but decided to stay in the UK because of the worries around Brexit.

“We thought if we can get something closer to home, yes, it’s more expensive but it would safeguard against any future supply issues.”

The drink’s main ingredient is plant-based milk, which Harvey says is hard to find in the UK.

“We formulated our own range of milks, but obviously we have to source the almonds, the coconuts and the oats.

“It’s all well and good working directly with someone, but that doesn’t create a supply chain, so we’ve had to find partners we can work with in the UK but it’s really hard.”

Harvey says keeping things local means the cost goes up but there are benefits to keeping things in the UK

“There’s more control over the manufacturing if it’s closer to home which is a benefit and is a strategic move and we can work in smaller quantities.”

‘I’m optimistic about future deals’

In Leeds, Leave voter Jack Thompson and Amelia Watson, both 22, have a make-up company called MEMI.

It’s an online business that started in 2017, which has most of its customers in Europe.

These two aren’t preparing for a no-deal Brexit – they’re going to wait and see what happens instead.

“In Parliament there might be a new development that can alter the direction of Brexit.

“We’ve taken the decision to wait and see before we restructure any of the business as one wrong decision could be costly.”

Jack told Newsbeat there are some things they’d have to consider if the UK left the EU without a deal.

“At the moment we have the free trade deals so we can depend on quick and reliable delivery, that’s why we can have a shipping cost of £5.99.

“If we leave with no deal and we leave the customs union we would have to increase our shipping rate for international sales by about £3.

“We could end up paying a lot to ship large amounts of stock to Germany or France – that would impact our margins as we would have to factor in the cost customs checks.”

But he is optimistic about Brexit and any trade deals the government can do with other countries.

Jack told Newsbeat: “I voted to leave and I stand by my vote.

“Depending on what trade deals we get outside of the EU, that could potentially be a massive help for us so we are hoping for free trade deals with the US and Australia,” he adds.

‘It’s a constant worry for me’

Jocelyn Evans is 28 and runs a manufacturing company in Birmingham called Hook and Eye UK.

She helps new or small clothes brands turn their designs into real products – she says she’s helped set up more than 40.

She voted to stay in the EU and says she’s thinking out of the box to prepare for Brexit.

“Instead of offering the customers physical goods I am trying to offer more digital support.

“I think that’s the only way people can get through a no deal Brexit – think of innovative ways to provide a business and still avoid costs.”

Joss told Radio 1 Newsbeat she thinks about Brexit a lot and worries about it too.

“I don’t know what the full effects of a no deal Brexit will be to my business.

“If we come out of the EU and there are no trade deals that is going to put the price up on everything – it’s a constant worry for me.”

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