Brexit. How many words have been quite so controversial in recent times?
Its supporters are fired up with optimistic predictions for British business in a new era of more control. Yet sceptics still forecast disaster. Each group seems to be shouting as loud as each other.
According to some commentators, business feels it has been ignored for much of the past year. Now it is fighting back
It has been a troubling time for many British businesspeople. Most chose to stay in the EU just 12 months ago. They accepted defeat, but then they grew more worried as Theresa May appeared to opt for an extreme form of “hard Brexit”, pledging to quit the single market.
But away from all the political bickering, we’d like to know what it actually means for British industry. Like everything, part of the argument for leaving Europe hinges on cost. We will no longer have to pay £9 billion towards a European Union budget every year.
Even that fact is opposed by those who would have preferred us to stay. Economists point out new costs linked to leaving would inevitably outweigh the saving.
What we know for sure: Theresa triggered Article 50 in March this year with Britain set to leave the EU by 2019
As a company that prides itself on a global outlook, we wanted to get to the bottom of how Brexit was shaping British prospects. Since last year’s referendum, it’s fair to say home-grown businesses have faced a lot of uncertainty.
Of course when researching this topic, you’re bound to encounter differing opinions. Facts would be preferable.
It was recently reported that such is the lack of clarity about Brexit that two thirds of UK businesses aren’t prepared enough for all the red tape that withdrawal from the European Union will bring. Unsurprisingly, a third of those quizzed also said Brexit was the biggest challenge they faced.
Meanwhile five leading business organisations have urged the government to keep access to the Single Market and Customs Union until a Brexit deal is reached.
It’s feared that if the EU decides to change policies after Brexit, it may mean we will lose our access to the single market.
That means the challenge now is for the UK to negotiate free trade agreements with the EU and other countries across the world. Economists have predicted Britain will lose some £75 billion if we are excluded from the single market.
That’s why bosses from the British Chambers of Commerce (BCC), the Confederation of British Industry (CBI), manufacturing trade group the EEF, Federation of Small Businesses (FSB), and the Institute of Directors (IoD) are all calling on the government to “put the economy first.”
The groups, who represent hundreds of thousand businesses, oppose the government’s stated position that “no deal is better than a bad deal” for Brexit.
They believe this would mean we would crash out of Europe in two years’ time with no sound regulations on how to trade with the EU bloc.
So back to the facts.
According to experts at HSBC, it remains important that business leaders don’t halt plans to grow as we all wait to see how our departure from Europe unfolds.
They point out that with Article 50 now invoked, we do definitely have a suggested timeline for Brexit.
And this brings with it a degree of clarity.
HSBC says: “Brexit undoubtedly brings risks but it also presents opportunities. Many businesses continue to look at ways to turn the situation to their advantage.”
After the ‘leave’ vote, there were a lot of doom-laden reports about how our economy was going to take a nosedive.
But for every pessimistic pundit predicting tougher times ahead, there was another, wildly optimistic commentator saying the negativity was not only uncalled for but damaging in itself.
So what has actually happened?
Here are some statistics from HSBC about how the economy has fared in the wake of exit developments.
Stock markets recovered quickly after a short-lived fall and the FTSE100 actually ended last year 13% up compared to a pre-referendum level.
The OECD’s prediction for UK GDP growth in 2017 is 1.6%. This is slightly lower than before the referendum but it’s also an improvement on the previous prediction of just 1.2%
At Hobut, we continue to work closely with clients across the globe.
Another widely-quoted ‘benefit’ of Brexit is that it’s predicted to boost business with other parts of the world.
One fast-growing market continues to be China.
Internet business resource Market-Inspector reports what could be known as the bad news.
They say: “UK exports will take a hit.
“In 2015, the UK exported £133 billion worth of goods to the rest of the EU, which is almost equal to half of global goods exports. It is predicted that the UK will experience a loss of at least £4.5 billion a year, if they leave the EU without negotiating a new trade agreement with the EU.
“This could take a major hit on export businesses in the UK, as their costs will hike up with the increased tariffs. It will result in UK businesses being less competitive in the EU markets and globally, as well.
“Even if the businesses choose to maintain a competitive edge by decreasing prices, it would mean lower profits for them.”
Yet it doesn’t take long to find a directly opposing opinion.
Elsewhere, a drop in the pound is hailed as good news for exporters.
Alex Edwards, head of the dealing desk at UKForex, told www.startups.co,uk: “Exporters could stand to make serious gains from the pound’s performance. Many of them are busily locking in forward contracts.”
It’s always going to be interesting to monitor opinions expressed about Brexit – good or bad.
For us, too many facts are missing. Then none of us has a crystal ball.
The only thing certain about Brexit is how uncertain it still all seems.