Brexit day: Business leaders welcome end to uncertainty but warn ‘real work begins now’
Three years of division, protests, debates and uncertainty will come to an end at 11pm this evening when the UK formally exits the European Union – and the nation’s business community is in bullish spirits about the future despite acknowledging that challenges remain.
The UK’s split from the continent will become official in a matter of hours, marking the end of a 47-year relationship in line with 2016’s referendum result.
Britain’s departure is being described by Prime Minister Boris Johnson as ‘the moment when the dawn breaks and the curtain goes up on a new act’.
The 11pm split will also signal the beginning of an 11-month ‘transition period’ when the UK government and European counterparts will continue negotiations over future trade arrangements.
However, even with much still to be decided, Brexit day has been broadly welcomed by figures across the country’s business landscape.
Carolyn Fairbairn, Director General of the Confederation of British Industry, said: “Today the UK leaves the EU, but our future prosperity remains connected.
“Despite the challenges of the last three years, together we have made progress. No deal has been avoided and a year of status quo gives time to shape that new relationship.
“Now the real work begins. It’s time to focus on the future and build a new relationship with Europe.
“This can reflect our shared values and mutual interest, and support bold global trade ambitions.”
Ryan Tholet, Head of Investec Private Bank, said confidence is up and activity within private equity markets is recovering.
He said: “To quote a famous aside, news of the death of the UK economy has been greatly exaggerated (in our experience). Evidence of this is shown in significantly more activity from HNW clients than in recent years, in spite of the apparent pervading doom and gloom.
“So now that Brexit is (almost!) done I think our clients will likely be pleased the negative conversation and uncertainty is coming to an end and they can look forward to the greater unfolding opportunities that lie ahead as the UK re-establishes itself in a post Brexit environment.
“In the financial services sector, firms with strong European links will still be able to execute on their plans with confidence, be they at home in the UK or overseas.
“The UK has retained its position as a desirable location to live and conduct business, which is evidenced by the fact that demand for property here has not waned in the space our clients operate in.
“Finally, activity from our private equity clients is up, particularly at the top end of the property market where the trends show they are looking for large mortgages to support home purchases and lifestyle choices.
“This appetite for debt reflects a growing confidence among the private equity industry of the certainty surrounding a majority government going forward and the relative value of a UK economy catching up on a ‘lost’ past three years.”
Robert MacIntyre, Head of Wealth Structuring Solutions at Lombard International Assurance, says the coming months will be pivotal in shaping Britain’s longer-term future.
He said: “Brexit has arrived but its lasting impact on the wealth management industry remains to be seen.
“The coming year will be a defining moment for many in the industry as the UK’s future relationship with the EU becomes more clear.
“What is inevitable in the coming months is increased regulatory complexity for companies operating between the UK and the EU, with firms that have focused on mitigating the risk of all Brexit outcomes benefitting from their investment and foresight.
“Front of mind for all wealth managers will be the issue of passporting rights. We have already seen UK-based firms with EU clients move some of their operations to the continent, and vice versa.
“Our HNW clients are increasingly internationally mobile and they will expect their cross-border wealth solutions to be unchanged, regardless of regulatory change. Firms will need to invest significant time and resource to ensure that the impact of Brexit on their client services is muted.
“However, with the Brexit process now in motion and five years of relative political stability forecast for the UK, many firms and their clients are more confident about the prospect of life in the UK than they were this time last year.”
Brexit’s impact will be felt by businesses of all sizes according to Mike Cherry, National Chairman of the Federation of Small Businesses, who believes swift action on unresolved issues must now be a priority.
He said: “The last three years have felt like Brexit purgatory for small businesses. Getting Brexit done will be welcomed by many of these businesses and they can now look forward with more certainty and renewed confidence.
“But as one chapter of Brexit ends, another begins, with little time on the clock to flesh out the crucial details needed to secure an ambitious deal that works for all of the UK. With only 11 months left before the transition period ends, small businesses will need a clear picture of where we are heading as quickly as possible. Time cannot be wasted.
“Firstly, attention must turn to negotiating a comprehensive free trade agreement with the EU – small businesses understand there will be some additional friction in trade with the EU after the transition period but want to ensure this is kept to a minimum. They also need time to adapt to new trading arrangements and financial support to absorb some of the additional costs.
“It is vital that the Government releases its negotiating objectives swiftly to give small firms an idea of what a potential deal will look like. This will help them to plan and invest ahead of the changes.”
Nick Leeming, Chairman of national property firm Jackson-Stops, believes agrees work has yet to be done, but says the sector had already seen an upturn since December’s general election provided greater Brexit certainty.
He said: “For many, this marks a day that they thought we would never reach. Yet after almost four years, come 11pm this evening, Britain will finally depart from the European Union.
“There is still much more to be done however, and the next 11 months of the year will be particularly busy for the UK government as we complete our transition out of the EU.
“Encouragingly, with Brexit now in touching distance, many of our branches have enjoyed an electric start to 2020, with an uptick in applicants following the majority government win in the December general election.
“Whilst there are still elements to be ironed out, we expect the certainty provided from our exit from the EU will continue to boost activity in the UK housing market, as prospective home movers gain confidence in the market.”
Rupert Morrison, economist and CEO at workforce analytics firm orgvue, believes it is time for businesses to stop using Brexit as an excuse for indecision or a lack of progress.
He said: “British businesses need to grow up and quit complaining about Brexit as though it’s breaking news and they haven’t had a chance to prepare.
“Large companies in the UK are currently investing more in their telecoms services than they are on understanding their business, the work that needs to be done and the workforce they need to achieve it. It’s no wonder they’re using Brexit as an excuse for growth concerns.
“But one referendum, two elections, three prime ministers and four years later, businesses are somehow still floundering due to ‘uncertainty’ and skills shortages.
“Business leaders need to get over it and model different scenarios for the future. Data can help ensure British businesses are prepared for all eventualities, even Brexit.”
Razat Gaurav, CEO at supply chain logistics company Llamasoft, says Brexit will inevitably mean change, but careful planning can leave companies well-equipped for what comes next.
He said: “Last year, 54% of European manufacturers said they would change their supply chain design as a direct result of Brexit. The majority (86%) of global manufacturers agreed that software would play an important role in protecting against disruption, but there are still barriers that stand in their way.
“Planning for multiple eventualities is a business imperative now that we’ve hit the Brexit deadline. In an age where never normal is the new normal, businesses must prepare themselves for multiple outcomes – especially those they don’t expect.
“Advanced scenario planning, access to data from across the extended supply chain, and the ability to harness data science and algorithms is vital to make this a strategic business advantage for businesses. Armed with a new approach, leaders no longer need to be hamstrung by uncertainty, they can accelerate and automate decisions, predict outcomes and prescribe the best actions. It’s time to empower leaders with the confidence to drive productive and efficient change.”
Phil Smith, Managing Director of Business West, says he hopes government attention can now turn to infrastructure improvements to ensure all UK regions can thrive in the post-Brexit business landscape.
He said: “In our region’s business communities, this historic moment will bring a mixture of regret for some and celebration for others – but this is just the end of the beginning, not the beginning of the end.
“Decisions made during the next phase of negotiations will influence the business environment for decades to come.
“Businesses are likely to face significant changes in the way they trade, both in Europe and across the world. The government must clearly communicate what those changes will be – and provide timely guidance and support to help firms adapt and make the most of new opportunities as Britain sets its own trading policies.
“Our region’s business communities are pragmatic and want to move on from the emotional arguments around Brexit that have stymied confidence and investment for so long.
“They want to work with ministers to get the details right on issues like customs, regulation and immigration – and they are desperate to avoid more of the cliff-edges that have affected their operations in recent years.
“On the domestic front, spades in the ground for new infrastructure, better skills and training, and action to lower the up-front costs facing UK businesses are urgently needed to boost confidence and unlock investment.”
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