Business groups respond to publication of Brexit customs paper

brexitBusiness groups, including the Confederation of British Industry (CBI), the British Chambers of Commerce (BCC) and the Institute of Directors (IoD) have responded to the publication of Brexit customs position papers by the Department for Exiting the EU.

The government is seeking to secure a new customs arrangement that ‘facilitates the freest and most frictionless trade possible’ between the UK and the EU.

The paper outlines two customs approaches: a ‘highly streamlined’ customs arrangement between the UK and the EU, and a new customs partnership with the EU.

Responding to the publication of the paper, Josh Hardie, Deputy Director General of the CBI, stated: ‘Companies will welcome the progress government has made . . . in publishing these papers. Over the past year, businesses have been providing policymakers with the evidence, ideas and solutions to make a success of Brexit.’

Dr Adam Marshall, Director General of the BCC, stated that businesses want ‘clarity on the UK’s future customs arrangement with the EU’.

He said: ‘Business needs to see the government’s resources focused on the conclusion of a successful customs deal with the EU. At this stage, it is critically important to keep a number of different options open in order to achieve this goal.’

Meanwhile, the IoD welcomed the government’s ‘first concerted push on trade after Brexit’. Allie Renison, Head of EU and Trade Policy at the IoD, said: ‘This is a hugely positive step from government in putting pen to paper to spell out its objectives for customs arrangements with the EU after Brexit.

‘The paper outlines options for a transitional period and for the longer term, proving that both are crucial to achieving a smooth and orderly exit.’

New trade body to be created by government

The government has revealed its intention to create a new trade authority, termed the UK Trade Remedies Organisation, ahead of Britain’s departure from the EU in 2019.

The UK Trade Remedies Organisation will help to combat incidents of unfair trade that may occur once Brexit has taken place.

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It will also build upon the UK’s ‘capability and capacity’ to investigate complaints in relation to unfair competition, and will allow the UK to establish its own trade rules.

The government is looking to recruit around 130 employees, and intends to have the new organisation up and running by October 2018.

Commenting on the news, Jill Rutter, Programme Director at the Institute for Government (IfG), said: ‘The government needs to prepare for Brexit, and that includes being able to run our own system of trade defence.

‘The government’s current policy is to leave the single market and the customs union and has to be ready for leaving with no deal. So this is a sensible part of that contingency planning.’

UK ‘won’t cut taxes post-Brexit’, Chancellor states

Chancellor Philip Hammond has suggested that the UK won’t cut taxes and fiscal regulations after Brexit.

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The Chancellor stated that the UK will remain within the ‘EU average’ in terms of tax rates, and will not seek to reduce taxes in a bid to become more competitive.

He commented: ‘I often hear it said that the UK is considering participating in unfair competition in regulation and tax.

‘That is neither our plan nor our vision for the future.

‘I would expect us to remain a country with a social, economic and cultural model that is recognisably European.’

In January, Mr Hammond stated that the government may have to ‘change its economic model’ if the UK was unable to remain in the EU single market.

He commented: ‘We will change our model, and we will come back, and we will be competitively engaged.

‘I personally hope we will be able to remain in the mainstream of European economic and social thinking. But if we are forced to be something different, then we will have to become something different.’

The Chancellor’s recent statements come amid ongoing Brexit negotiations, with government officials debating the free movement of EU citizens in the UK.

UK SMEs concerned about securing funding in run-up to Brexit, survey suggests

A survey conducted by insurer Hiscox has suggested that small and medium-sized enterprises (SMEs) in the UK are concerned about their ability to secure funding in the run-up to Brexit.

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Hiscox surveyed 500 small businesses and discovered that 38% of respondents utilise EU funding in order to help grow their business.

However, the insurer warned that firms face an ‘uncertain financial future’ as the UK re-evaluates its economic strategy ahead of Brexit.

36% of business owners cited a lack of funding options as being the biggest obstacle they face when looking for funding. 28% of firms surveyed stated that they are ineligible for funding, which has prevented them from growing their business.

Meanwhile, 25% said that market competition is their key challenge in securing funding.

Hiscox also found that economic uncertainty has adversely affected business confidence: 31% of those surveyed reported that such uncertainty has hampered their growth opportunities over the last five years.

Less than half of businesses have discussed Brexit risks, ICAEW suggests

A survey carried out by the Institute of Chartered Accountants in England and Wales (ICAEW) has suggested that just 43% of firms have discussed the risks that Brexit poses to their business.

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The ICAEW found that only 29% of businesses surveyed have made Brexit plans. 6% of firms expect a positive Brexit outcome, whilst 40% predict that EU negotiations will have a negative impact on their business.

Additionally, only 21% of firms surveyed would be willing to explore new markets.

The research also suggested that 29% of businesses believe that the free movement of goods, services and capital between the UK and the EU is essential for growth. One fifth of respondents stated that they also value access to a skilled EU workforce.

Michael Izza, Chief Executive of the ICAEW, said: ‘With 20 months until departure, it is now the government’s responsibility to help pave the way for business success once we have exited the EU.

‘Issues raised within our research – such as access to skilled EU workers and the free movement of goods and services – should be firmly placed on the Prime Minister’s radar when she engages in talks with the EU to ensure the priorities of business are fully considered and complacency is avoided.’

Cybercrime a bigger concern for SMEs than Brexit, research suggests

Research published by Barclaycard has suggested that small and medium-sized enterprises (SMEs) are more concerned about the risks that cybercrime poses to their business than those put forward by Brexit.

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44% of businesses surveyed by Barclaycard consider cybercrime to be a major concern for their firm, whilst 34% reported that they are worried about the impact of Brexit on their business.

Barclaycard found that SMEs now invest £2.9 billion per annum on cyber security experts, in order to help them ‘stay ahead of the latest threats’.

Over the last five years, small businesses have increased their cyber security spending by 43%, the research revealed.

The research also suggested that small businesses are concerned by the challenges that the UK’s ‘uncertain economic landscape’ poses. 34% are worried about their ability to manage changes and demands as their business grows.

Sharon Manikon, Managing Director of Customer Solutions at Barclaycard, commented: ‘UK SMEs face immense pressure to keep up with competitors of all sizes.

‘This is all the more challenging in an uncertain political and economic landscape with shifting consumer preferences and new technology that continues to develop at pace.’

Government establishes new Brexit business group

The government has created a new business advisory group, comprised of five major UK business groups.

The Confederation of British Industry (CBI), the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC), the Institute of Directors (IoD) and manufacturers’ organisation the EEF make up the new business group, and their director generals will meet weekly with the Business Secretary, Greg Clark.

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During a recent parliamentary session, Mr Clark reported that he had met with businesses, business leaders, employees and investors around the UK since the Brexit vote. The new group will seek to ensure that business has more input into the Brexit negotiations.

Dr Adam Marshall, Director General of the BCC, hopes that the new business advisory group will also help to achieve a ‘business-friendly’ Brexit outcome that addresses firms’ ‘real-world needs’.

Commenting on the creation of the new business group, Mr Clark said: ‘The government is creating a new EU exit business advisory group to ensure business is not only heard, but is influential throughout the negotiations.’

Meanwhile, Stephen Martin, Director General of the IoD, stated: ‘A good Brexit outcome is one that puts the economy, jobs and prosperity right at the centre of the negotiations, so we wholeheartedly welcome the formation of this advisory group by the government.’