Only 2pc of British businesses support a 'no deal' negotiation option
Only 2pc of companies in the UK support leaving the European Single Market and Customs Union without a deal and relying on World Trade Organisation rules for trade, according to a survey from the British Chambers of Commerce (BCC).
The survey, which was carried out one month after the UK general election, found that just over one in three businesses in the UK would prefer that Britain remain in the Single Market and Customs Union.
Meanwhile 28pc said that they would prefer that Britain negotiate a comprehensive Free Trade Agreement and a customs agreement.
"There is near universal consensus that a deep and comprehensive agreement is needed. 'No deal' isn’t seen as a viable option," Dr Adam Marshall of the BCC said.
Should the UK leave the EU without an agreement in place then WTO rules would apply.
Under WTO rules, the UK would be forced to pay tariffs on goods and services which it exports to the EU. For items such as beef and dairy, the tariffs can be as high as 50pc or 60pc.
When respondents were asked about what type of transition period would be best for their business, almost one in two said a transition period of three years, while 22pc said a transition period of longer than three years.
Only 17pc said that no transition period was needed.
"By more than three to one businesses want a transition period on the way to a final agreement with the EU. This is critical to prevent firms facing the prospect of repeated, costly adjustments to new trading conditions," Dr Marshall said.
Dr Marshall concluded by saying that getting transition arrangements on the negotiations agenda as quickly as possible would give business confidence to press ahead.
Over 2,400 companies took part in the survey, 91pc of whom are small and medium size enterprises. Of those surveyed, 25pc operate in the manufacturing sector, while 75pc operate in the services sector.