Business Priorities for Brexit assembles leading figures from business and journalism to discuss the implications of the referendum result with St. James’s Place Wealth Management
A picture is gradually emerging about the challenges and opportunities for small businesses ahead of the UK’s departure from the European Union. Above all, business owners need to think ahead in order to be able to respond nimbly when the time comes.
There are several issues worth monitoring when assessing the business priorities for Brexit…
In July, George Osborne suggested the rate could be cut from 20 per cent to 15 per cent. His successor as chancellor, Philip Hammond, could yet choose to follow through with this cut to encourage investment when he makes his Autumn Statement later this year.
Single market access
Hammond has said the UK will leave the single market before negotiating fresh access to it. When access ceases, the cheaper pound will help to offset new tariffs – helpful for British exporters, but not for those importing EU goods to the UK.
Skilled workers and training
The EU insists that single market access requires the free movement of labour, but Theresa May has called for more control over UK border policy. If free movement of labour is reduced, companies that rely on skilled EU labour (whether they are employees or contractors) might need to turn to domestic or non-EU alternatives – in some technical employment areas, supply is limited. Any new government training schemes will take time to replicate current skilled worker numbers.
Several prominent pro-Leave business figures argue that the EU imposes too many rules on UK business. The significant exception is financial services – the UK has one of the world’s strictest financial regulators. But the government may cut ‘red tape’ in other areas including employment rights and environmental protections.
The UK has not negotiated its own trade deals for decades but there may be potential for significant deals in Asia, Australasia and the Americas. This could open up markets in countries that businesses had not previously considered viable as retail focuses. Perhaps the greatest threat to such deals is delay; technically, the UK is not meant to begin negotiating until it has agreed its exit arrangements with the EU.
Earlier this year the European Investment Bank agreed to lend £100m to small businesses in the UK through Funding Circle. Funding Circle’s co-founder now believes that future plans may be jeopardised, so it will be up to others – the government, the British Business Bank et al – to decide whether to take up the slack. Meanwhile, some companies may turn to cost cutting or mergers.
A recent survey by the Business Growth Fund found that nine in ten business leaders expect the referendum result to lead to a short-term dip in economic growth, while 54 per cent said that continued access to the EU single market must be a priority for the UK in negotiations.
Nevertheless, 74 per cent of the 450 people surveyed said that the UK remains an excellent country in which to do business. That confidence will be important in the months ahead; so too will the ability to adapt.
The Business Priorities for Brexit
St. James’s Place Wealth Management is delighted to announce a Special Brexit Business Briefing with Simon Walker, director general, Institute of Directors, and Jim Pickard, chief political correspondent, Financial Times, on 21 September 2016. Our two outstanding keynote speakers will share their expert views on the implications of Brexit.
Simon Walker will outline what business leaders want from government, both in terms of the UK’s future relationship with the EU and its trading links with the rest of the world. He will also outline the IoD’s priorities for domestic reform to make the UK economy more competitive.
Jim Pickard will share his unique insights into a tumultuous year in British politics along with his views on the future of a rapidly changing geo-political landscape.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.
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