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Small businesses unprepared for chaotic no-deal Brexit, study finds

A road traffic sign is in front of the Union Jack and the European Union flag hanging outside Europe House in Smith Square, London. British citizens should be able to choose to keep various benefits of EU membership including the freedom of movement after Brexit, the European Parliament's chief negotiator has said. PRESS ASSOCIATION Photo. Picture date: Friday March 10, 2017. Guy Verhofstadt said he hoped to convince European leaders to allow Britons to keep certain rights if they apply for them on an individual basis. See PA story POLITICS Brexit. Photo credit should read: Yui Mok/PA Wire

By Alan Jones, Press Association Industrial Correspondent

Only one in seven small firms have started planning for the UK leaving the EU without a deal in place, while many say they would have to cut staff, a new study finds.

Half of the firms polled by the Federation of Small Businesses (FSB) believe a no-deal Brexit will have a negative effect on them, rising to two thirds among those trading with the EU.

One in three smaller firms said they would postpone major business decisions and one in five would cut staff or spending.

The survey of more than 1,200 FSB members showed that smaller businesses are not prepared for a "chaotic no-deal Brexit", said the report.

FSB chairman, Mike Cherry, said: "It is deeply troubling that the prospect of a no-deal Brexit is seeing many small firms shelving business decisions, pausing investment and, more drastically, thinking about cutting staff.

"These businesses are the growth engines of the UK economy and it is critical that the Government listens to their worries.

"At this stage, it is understandable that some small businesses haven't started preparing as they aren't actually aware of what they are planning for. What we need now is the Government to work with the small business community to ensure that they are adequately prepared and supported if a no-deal Brexit becomes a more likely outcome in the coming weeks.

"The concern is that with only six months to go before exit day, we are now in a race against the clock to avoid a situation where we crash out of the EU, causing significant damage to our smallest businesses. This must be avoided at all costs."

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