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How will Brexit affect UK Businesses?

July 2016

Britain is leaving the EU. It’s all you hear on the news, all you read in the papers and it’s currently all us Brits talk about. But with so much conflicting information out there, how can we possibly reach a conclusion as to exactly how this will impact us?

Brexit campaigners will tell you that by being free of EU ‘red tape’, Britain will be free to flourish. Remainers will tell you that leaving the EU has destroyed opportunities and will make it difficult for us to trade with other countries.

Exactly how much a business will be affected by Brexit depends largely on the nature of the business. If your business relies heavily on EU trade, then you can expect to notice significant ramifications, and so you will have to adapt accordingly. If your business only sells to or buys from the UK, or countries outside Europe you might be thinking you won’t be affected by the leave vote. However, the reality is that you probably will be affected in some way. It’s the domino effect.

If it’s safe to assume that all business will be affected by Brexit, it begs the question will the impact be positive or negative? Let’s take a look at what organisations that represent business have to say on the matter:

Confederation of British Industry (CBI) – It is quite clear that CBI is firmly against leaving the EU. They produced a paper saying that leaving would cost nearly a million jobs and a loss of £100bn of national income by 2020.

Institute of Directors (IoD) – The IoD carried out a survey prior to the referendum showing that 75% of respondents wanted to remain. While in favour of remaining, the IoD has hosted events that present both sides of the argument.

British Chamber of Commerce – A small minority of the BCC is in favour of remaining. The fact that a fair number of the BCC desired to leave is interesting though, as director-general John Longworth had to resign following comments he made that implied Britain’s long-term prospects could be brighter outside the EU.

You’d be forgiven for thinking that leaving all sounds very negative, but there are some positive elements to leaving the EU. As Brexiters argue, leaving means we would be free from excessive and inappropriate regulation by Brussels. This can be seen as a major drawback to being in the EU, particularly for smaller businesses who see it as a drag on their performance, as well as the cause of much irritation.

Another potential positive is that leaving will force businesses to look for new and faster-growing markets. Long-term, this may actually be better for growth, jobs and earning. Though this is purely speculative and may not actually be the case, there is potential for a bright future for Britain.

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