Region reacts to Brexit vote

FOLLOWING the UK’s decision to leave the EU this morning, business leaders across the region give their reaction to the historic vote.

Martin Jenkins, practice senior partner at Deloitte in Yorkshire: “The British public have spoken and made clear that they see the UK’s interests best-served by leaving the European Union. While the UK has opted for a future outside the EU, Britain remains a competitive, innovative and highly-skilled economy and an attractive place for business.  

“However, as indicated by today’s market volatility we are likely to see a period of uncertainty.  Businesses need to ensure they are set up to navigate the immediate risks and impacts of an exit, and have the processes and people in place to manage a period of upheaval.  

“Against this backdrop of uncertainty, British businesses must continue to be proactive in finding ways to raise productivity and drive growth. The UK remains a world leader in R&D and a hub for innovation.  This will help businesses capitalise on the opportunities and respond to the competitive threats created by the leave vote. They must also play an active role in setting a vision for a new, post-EU environment which is open, pro-growth and delivers prosperity and opportunity for all.”

Ian Stewart, chief economist of Deloitte UK: “Negotiating and implementing Britain’s withdrawal from the EU is huge task. But in tackling it our nation can draw on great strengths. The UK is in the top tier of the world’s most competitive economies. We have strong institutions and a highly skilled workforce.  Our economy is a magnet for inward investment and enjoys one of the lowest unemployment rates in Europe.  The UK faces a period of uncertainty and of great change. But the resilience and dynamism of our economy and institutions will be huge advantages as we start to navigate a prosperous future outside the EU.”

Clydesdale Yorkshire Bank: “Yesterday’s vote to leave the EU will have no immediate impact on the Bank.  

“There is now expected to be a period of at least two years for the terms of the UK’s exit to be negotiated – during which time we, like all other businesses in the UK, will work with policy makers and regulators to understand and manage any potential consequences for our business.”  

Sarah Phillips, partner at Irwin Mitchell Private Wealth: “Brexit will potentially have a big impact on the people who work in the UK’s financial services industries. Many banks, insurers and fund managers who have large businesses in continental Europe could consider relocating to Paris or Frankfurt and senior staff will either lose their roles or have to move to another country.  Some global investment banks, such as JPMorgan, have said that Brexit would lead to a significant loss of jobs in the UK.”

Andrew Watters, tax partner at Irwin Mitchell Private Wealth: “Now that the UK has voted to leave the EU, it will be interesting to see whether there are any substantive tax changes.  VAT is, of course, an EU tax but it will be surprising if something very similar is not introduced as it generates huge amounts of tax for the Government.  As ever, the tension will be between reducing tax to generate more trade and increasing it to get more money for state spending.
 
“One area of tax where there will be less influence post-Brexit is in the internal EU bodies set up to combat aggressive tax avoidance, that is where the amount of tax payable in any one jurisdiction can be minimised by shifting profits into a lower tax jurisdiction.  Much of the tax planning by large international companies relies on mismatches between the rules of different jurisdictions.  The EU made a statement earlier this year about work being done with national governments to have a more joined-up approach to counter this sort of tax avoidance. A UK which is not part of the EU is likely to have less influence in such initiatives.”

James Roberts, chief economist with property consultancy Knight Frank: “One of the first outcomes from the result of the referendum is that the value of the pound will inevitably fall in the near-term, as will the stock market. The chances of a technical recession, as business investment is curtailed, is high, and exporters and financial services firms will be in the forefront of the downturn.

“In the light of the above risks we expect the Bank of England, seasoned by the experience of Global Financial Crisis, to respond quickly. An interest rate cut of 25 basis points is a strong possibility at the Monetary Policy Committee’s July meeting, or perhaps earlier if required.

“We may also see a return of quantitative easing, if there are signs that investment is deteriorating. This should in our opinion help restore confidence as the summer progresses. Unemployment is a lagging indicator, so any job losses will take time to filter through to the statistics.

“The underlying strengths of the UK economy remain in place, and ultimately real estate is an investment that works best for those who pursue long-term goals.”

Stuart Watson, EY’s senior partner in Yorkshire and the Humber: “The initial impact of the vote to leave the EU may not be felt straight away as we will still likely be full members during the negotiations. There is a risk that we may see investments continuing to be delayed and transaction activity continuing to be put on hold in the face of heightened uncertainty. We do expect significant amounts of volatility in financial markets in these first few months.  As Yorkshire has a strong financial sector, this could be adversely affected in the short-term.

“The longer term picture however is another matter. It will be a long time before we know what the new rules are. Businesses across the region must use the next few months to assess their position in terms of trade, their people and regulation. Europe is a significant investor in the Yorkshire region, as our recent UK Attractiveness Survey shows, in particular from the Netherlands, Germany and France.

“Organisations need to assess their access to key export markets, imports and the relevant impact on their supply chains. Access to skilled staff will be high up the agenda for some sectors. Businesses across the region will also be keeping a close eye on any changes to regulation and to Government policy, particularly around issues such as taxation, EU research funding and potential use of state aid by UK Government to back selected sectors. Although any changes are likely to take time to come through.

“We do not know the exact changes that we will be facing over the coming years, but this time can be well-spent by strengthening current positions and relationships, planning for the most-likely scenarios and looking out for new opportunities that will come.”

Stephen Wright, Chairman of West & North Yorkshire Chamber of Commerce:
“The people have spoken and now the Government must navigate a path for Brexit to be realised.

“In the wake of the electorate’s historic decision to leave the European Union, the immediate priorities for UK business are market stability and political clarity.

“Some businesspeople will be pleased with the result, and others resigned to it. Yet all companies will expect swift, decisive, and coordinated action from the government and the Bank of England to stabilise markets if trading conditions or the availability of capital change dramatically. Firms across the UK want an immediate and unambiguous statement from the Prime Minister on next steps, along with a clear timeline for the UK’s exit from the European Union.

“Business will also want to see a detailed plan to support the economy during the coming transition period – as confidence, investment, hiring and growth would all be deeply affected by a prolonged period of uncertainty. If ever there were a time to ditch the straight-jacket of fiscal rules for investment in a better business infrastructure, this is it.

“Our members will want to see action to maintain economic stability, a timeline for exit, and answers to their many practical, real-world questions about doing business during and after this historic transition.

“Businesses want certainty, clarity and the confidence to invest and we will be reminding Government of the need to focus on those issues which have been sidelined during the referendum.  We need to move quickly back to business as usual and ensure a smooth transition.  The health of the economy must be the number one priority – not the Westminster political post-mortem.”

Jill Thomas, Sheffield Chamber of Commerce president and MD of Future Life Wealth Management: “In the wake of the electorate’s historic decision to leave the European Union, the immediate priorities for UK business are market stability and political clarity.

“Some business people will be pleased with the result, and others resigned to it. Yet all companies will expect swift, decisive, and coordinated action from the government and the Bank of England to stabilise markets if trading conditions or the availability of capital change dramatically.

“Firms across the UK want an immediate and unambiguous statement from the Prime Minister on next steps, along with a clear timeline for the UK’s exit from the European Union.

“Business will also want to see a detailed plan to support the economy during the coming transition period – as confidence, investment, hiring and growth would all be deeply affected by a prolonged period of uncertainty. If ever there were a time to ditch the straight-jacket of fiscal rules for investment in a better business infrastructure, this is it.

“Businesses need action to maintain economic stability, a timeline for exit, and answers to their many practical, real-world questions about doing business during and after this historic transition.”

Richard Wright, Sheffield Chamber of Commerce executive director: “Britain needs businesses nationally and locally to get up to full speed quickly despite this time of great uncertainty. The health of the economy must be the number one priority – not a political post-mortem that distracts everybody from the job in hand.

“The country has operated with a massive trade deficit for far too long and we are building enormous debts. It is recoverable but we have to operate in a different way and this needs significant changes to business support mechanisms amongst other things.

“Now is the time to ditch the old box ticking, process driven systems that eat money in layers of bureaucracy. International Trade and start up support needs to be commercially focused using people who have been there and done it, and aligned to the regional economic strategy.

“Exiting Europe and the Devolution program give us the opportunity to change this but do the Combined Authority have the vision to do things differently to the way they always have?”

Dan Fell, CEO, Doncaster Chamber: “In the wake of the EU Referendum outcome, Doncaster businesses like all others up and down the country, are facing uncharted waters, as the UK now embarks on a process to leave the European Union. The immediate priorities for business are market stability, political clarity, a clear exit process timeline and business as usual.

“Throughout the referendum campaign the Chamber remained neutral, acknowledging that like the public, opinion on this issue was deeply divided amongst the business community.  Today’s result will therefore delight some Doncaster businesspeople whilst leaving others disappointed.

“However, the British public have spoken and the business community will now unite to call on Government, the Treasury and Bank of England to stabilise markets and to foster a climate of stability and confidence.  Businesses will also be reminding government to take very seriously the act of extricating Britain from the EU on the best possible terms, whilst also ensuring that full attention is given to key domestic issues such as: skills, infrastructure investment and devolution.

“Locally, the Chamber – working with local partners – will seek clarity from Government on what this means for Northern economies like Doncaster.  Doncaster has benefited significantly from European funding in recent years – including investment in our borough’s infrastructure.  We now need certainty that the borough, under new governance and funding arrangements, will not only do as well as it has in recent years – in relation to economic development funding – but that it will fair better.  The fact that there was such a split between London and the North when it came to voting patterns, should highlight the need for government to take this issue very seriously and move beyond catch phrases such as the “Northern Powerhouse” to work with the private sector to deliver on wealth and jobs for all parts of the UK.

“That said, for the majority of Doncaster businesses, today will be very much business as usual.  Today’s news will bring short term uncertainty; however, the Chamber remains confident that the recent economic growth we have enjoyed in Doncaster will continue apace. Doncaster Chamber will continue to support its members as normal and any firms facing challenges as a direct outcome or anyone with specific concerns about the EU Referendum should contact us.”

Juliana Delaney, chief executive of York-based Continuum Attractions: “Though we campaigned that we are safer in the EU as a community which engenders trade and travel, we must now make the best of our position. We will continue to champion the Great British tourism brand across the world and keep offering great experiences, great memories and good value for money at our attractions across the UK. I do believe we, the country and Continuum, are resilient enough to survive and thrive due to the strength of UK plc and its blue chip brand which has robust value across all sectors.”

 

 

 

 

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