Business groups, including the Confederation of British Industry (CBI), the British Chambers of Commerce (BCC) and the Institute of Directors (IoD) have responded to the government’s recent publication of its Brexit White Paper.
The 104-page document is divided into four chapters, which focus on security, economic partnership, co-operation and institutional arrangements.
A commitment to build a ‘new relationship that works for both the UK and the EU’ has been outlined by the government within the White Paper, alongside proposals for future trade arrangements.
Responding to the publication of the Paper, the CBI stated that many of the government’s intentions in regard to Brexit are ‘reassuring’. Carolyn Fairbairn, Director General of the CBI, said: ‘The Brexit White Paper reflects much of the evidence that business has been highlighting since the Referendum.
‘Businesses on both sides have been asking for frictionless trade between the UK and the EU, and shared rules could go a long way towards delivering that. It is now the EU’s turn to put economics before ideology on these proposals.’
Meanwhile, Stephen Martin, Director General of the IoD, said that EU negotiators ‘now have specific details to build upon’, and urged them to ‘respond constructively’.
The BCC, however, gave a decidedly lukewarm response. Dr Adam Marshall, its Director General, commented: ‘Businesses still need clear and detailed answers on many of the practical, real-world questions they face. Many of these answers can only emerge through negotiations – so it’s time for the two sides to crack on and get to a deal.’
The Institute of Chartered Accountants in England and Wales (ICAEW) has warned that businesses in the UK must prepare for a ‘no deal’ Brexit.
Research carried out by the Institute has revealed that a fifth of UK firms ‘haven’t considered the impact of Brexit’ on their business.
Many business owners believe that the UK’s exit from the EU will have ‘minimal to no impact’ on their firm, according to the ICAEW.
It has urged businesses to put contingency plans in place in order to prepare for a ‘no deal’ Brexit, and to consider what this scenario could mean for their firm.
‘With less than a year until Britain leaves the EU, the prospect of an agreement in time is looking increasingly unlikely,’ said Michael Izza, Chief Executive of the ICAEW.
‘Even with the transition period until the end of 2020, too much still needs to be determined on how UK businesses and professional services will work both with and in Europe.’
Meanwhile, the research also suggested that 77% of businesses do not consider EU regulations to be a burden to growth, with a further 80% of firms committing to complying with EU rules once the UK has left the bloc.
Research carried out by the Federation of Small Businesses (FSB) has suggested that confidence levels amongst the self-employed have ‘fallen significantly’ over the last year.
The FSB’s Small Business Index (SBI) for the UK’s self-employed community stood at +2.8 in the second quarter of this year – a significant fall when compared to the reading of +9.7 recorded in the first quarter of 2018.
The SBI also revealed that 28% of UK sole traders expect their business performance to worsen over the next three months.
To help boost confidence amongst self-employed individuals, the FSB has launched a new ‘think self-employed’ agenda, which urges the government to secure a Brexit deal that ‘works for sole traders’.
Commenting on the matter, Mike Cherry, National Chairman of the FSB, said: ‘The UK’s self-employed community contributes more than £270 billion to the economy annually, yet they’re still treated as an afterthought by policymakers.
‘The self-employed need to be front of mind for Brexit negotiators. We must avoid a future scenario where our contractors have to fill out burdensome paperwork when completing jobs in Europe. Any Free Trade Agreements struck after 2020 need to include dedicated small business chapters to ensure firms of all sizes, including sole traders, benefit from new arrangements.’
As the EU Withdrawal Bill becomes law, business groups and unions from the UK and the EU have called for ‘increased pace and urgency’ in Brexit negotiations.
The Confederation of British Industry (CBI) and the Trades Union Congress (TUC) have joined forces with EU organisations to call on the UK government and the EU to ‘inject pace and urgency in the negotiations, bringing about measurable progress, in particular a backstop arrangement to avoid a hard border in Ireland’.
‘Decisions will be needed in June and October to finalise the withdrawal agreement and the transitional arrangement, and put economic interests and people’s jobs, rights and livelihoods first.’
The Bill finally received Royal Assent after a number of previous defeats in the House of Lords.
Brexit Secretary David Davis described the passing of the EU Withdrawal Act as a ‘landmark moment’.
In a letter to Chancellor Philip Hammond, leaders of some of the UK’s most prominent business associations have urged the government to undertake a review of the so-called ‘tax burden’ that faces the finance industry and UK entrepreneurs.
The letter, which has been signed by such groups as UK Finance, the Association of British Insurers (ABI), the Investment Association and TheCityUK, urges the Chancellor to back reforms designed to boost the UK’s competitiveness during the Brexit period.
It also calls for Mr Hammond to prioritise the creation of a new forum, to be made up of the finance sector, industry regulators and the government, and to provide ‘more support’ to financial services businesses located outside of London.
The letter states: ‘There is a clear indication from international investors and firms that they would welcome stability, certainty and streamlining of the UK’s tax system.
‘With regard to the levels of taxation, it is important that the UK remains competitive, and an independent review and analysis of aggregate levels of taxation, coupled with a benchmarking exercise against comparable jurisdictions, would be welcome.
‘This should focus not only on corporates, but also on the tax attractiveness of the UK to entrepreneurs, especially in financial technology.’
A study carried out by mortgage lender Kensington Mortgages has suggested that a significant number of the UK’s self-employed workers are ‘unfazed’ by Brexit.
Kensington Mortgages surveyed more than 1,000 self-employed individuals, and found that 63% believe that Brexit will have ‘no impact’ on their business.
However, in terms of Brexit’s impact on the UK economy, 52% of the self-employed individuals polled believe that the economy will be adversely affected.
Meanwhile, 47% of those surveyed expect 2018 to ‘bring in more work’ than 2017, and 42% are confident that they will make more money this year than last year.
The study also revealed that 35% of self-employed workers believe that Brexit will make it harder to obtain a loan, with sole traders and freelancers expected to be amongst those worst affected.
‘Self-employed workers are, without a doubt, the backbone of the UK economy, so we should all take reassurance from their optimistic outlook and ability to build up their savings to cope with life’s unexpected events,’ said Craig McKinlay, Sales and Marketing Director at Kensington Mortgages.
‘The fact that such a diverse group of workers would have diverging views on Brexit is unsurprising. What is perhaps more important is how we respond to these concerns. Regardless of regional location, business size or age, the self-employed have unique day-to-day circumstances that unite them.’
The Brexit vote has left UK households ‘£900 worse off’, according to the Bank of England (BoE) Governor, Mark Carney.
In addition, the BoE stated that the UK economy is currently 2% smaller than forecast before the referendum.
Mr Carney did, however, state that there could be a ‘sharp pick-up’ in business investment once a Brexit agreement has been finalised.
Furthermore, government officials have suggested that post-Brexit customs declarations are set to change, potentially increasing the cost of Brexit. Currently, exports and imports to and from the EU, which total around 200 million each annually, do not require a customs declaration. Research carried out by the University of Nottingham’s business school and KPMG has revealed that each new customs declaration could cost an average of £32.50.
Commenting on the matter, former Conservative Cabinet Minister, John Redwood, said: ‘We have a perfectly good functioning trade system with the rest of the world at the moment. It does not cost anything like these figures.’
Meanwhile, figures published by the Office for National Statistics (ONS) show an improvement in the government’s finances, with borrowing at £7.8 billion in April – the lowest figure for April since 2008, and £1.1 billion less than in April 2017.