Six Month Anniversary Of Brexit Vote

Six months after the political curveball that was Britain’s EU Referendum a lot of water has passed under the bridge but businesses are generally none the wiser about what the reality of Brexit means.

Since the shock referendum result, which was announced on June 24, David Cameron resigned and was replaced by Theresa May who told the nation that ‘Brexit means Brexit’ and plans to trigger Article 50 by the end of March 2017.

Although the pound was severely weakened by the result and there was widespread fear of an imminent recession the UK economy has defied the predictions and held strong, illustrating the strength, innovation and grit of British business.

While we do now know more about the proposed timeline for Brexit, which experts are predicting will allow between 14-18 months for negotiations, we still know little about the actual strategy which the government plans to reveal in February.

So considering that the buzzword of 2016, ‘uncertainty’, looks likely to pass over into the New Year, what can businesses do to prepare for Brexit?

Vicky Brackett, C.E.O. of business legal services, at Irwin Mitchell discusses.

Expect the unexpected

“While the UK economy has proven to be robust and resilient this year in the face of global political upheaval in Europe and the US, business leaders will need to keep their seat belts firmly buckled as 2017 promises to be yet another bumpy ride. 

“We’ve already seen during the Autumn Statement that Brexit is starting to cost us, with the Chancellor revealing that Britain will borrow an extra £122bn for Brexit.  The Government are due to reveal their plans in February and negotiation talks are likely to begin in earnest, next Summer. Ministers and industry leaders have put pressure on the Government for a transitional deal, to be in place 12 months before the official Brexit happens, to help soften the blow to the economy and help businesses make the necessary changes. 

“It’s vital that businesses have good short term and long term plans in place to deal with uncertainty. This might mean analysing your company’s vulnerability to changes in the market, reducing your order sizes, reviewing the currency you deal in and seeing if forward contracts, spot trades and limit orders could be beneficial should exchange rates fluctuate.

“Looking at the bigger picture you can access the skills pool and how changes to immigration law might affect you, and thinking about location and where might be best for your business to be based in the future should the Government be unable to negotiate favourable trade deals, access to the single market or freedom of movement.”

Make 2017 the year of exporting

“While the weaker pound has made holidays abroad more expensive, the drop in the value of Sterling has been great for British companies who export and sell their goods and services overseas.

“According to a FedEx Express report on UK exports, only a quarter of small companies are currently “internationally active” but a third (35%) of UK businesses say gaining access to new markets will be paramount to their success in 2017.

“Although the pound is predicted to regain some of its strength next year, and regardless of what trade deals come out in the wash, this is still a prime opportunity for firms to look at boosting and revitalising themselves by selling world-class expertise, services and products outside of the UK.

Increase productivity 

“Make productivity your priority in 2017. Earlier this month we sponsored the CBI's Unlocking Regional Growth campaign which looked at how businesses and the Government can work together towards a £67bn uplift in GVA.

“Business leaders should look at ways they can increase productivity by looking at better management practices, investing in education and apprenticeship schemes to ensure that skills shortages are dealt with and work with local authorities to improve transport links which will offer greater access to labour.

“Businesses who offer employees performance-related bonuses and flexible benefits tend to be more productive, so look at ways you can retain talent. Businesses outside of London who suffer from a lack of graduates to fill roles should look at working with a local university or education providers who may have set up innovation centres or business hubs to help turn world-class research turn into innovative products.”

“Firms who expose themselves to the pressures of foreign markets tend to become more competitive which in turn forces them to become more innovative, so the benefits of exporting can be seen in more than just boosting profits.”

Our business lawyers can provide legal advice on a range of matters surrounding the UK’s exit from the EU. For more information visit our Brexit page.