Brexit process must take into account the practical implications for business

30th May 2017

The UK’s decision last June to leave the European Union has enormous consequences for all of us – for businesses this means leaving an institution that has been the cornerstone of our trading relationship with the European continent for over 40 years. Whilst business communities across the UK have shown a remarkable resilience to grow, invest, trade and recruit since the European referendum, they are uncertain about the future as the UK embarks on the process of dis-entangling itself from the EU.

Chambers of Commerce have been in deep consultation with local business communities across the UK since the referendum and the key priorities of business are clear. They want the next government to secure an EU trade deal that minimises costs and trade barriers. Currently there are no tariffs on the movement of products among EU member states, but if a deal isn’t reached in the negotiations, reverting to WTO rules could result in tariffs of up to 10% being imposed on the export of cars for example, creating huge costs and complexities for integrated cross border supply chains.

However, it is the non-tariff barriers that often carry a greater cost to businesses. Areas that will need to be resolved include the mutual recognition of standards, contracts and qualifications, the sharing of data, and rules of origin. Negotiations on these areas will be complex, but need to be successful to keep costs and regulatory burdens to a minimum.

Businesses have consistently expressed concerns about their ability to source the talent they need to grow. Current levels of low unemployment and an ageing workforce have meant that foreign labour has been a critical part of business recruitment. The uncertainty over the status of EU nationals currently living and working in the UK has already had a negative impact on the retention and morale of employees. The next government must provide immediate certainty for businesses on the residence rights of their existing EU workforce, not contingent on any other aspect of the UK negotiations with the EU-27. A future UK immigration system must allow businesses to access workers from the EU in sectors where there are acute labour shortages with minimum bureaucracy, cost or barriers.

The publication of the Great Repeal Bill white paper in March 2017 was a positive step in providing regulatory certainty for business on the day that the UK leaves the EU. The bill aims to convert existing EU law into UK law; give Ministers the power to amend these laws using statutory instruments to reflect new institutions and legal jurisdictions in the UK; and repeal the 1972 European Communities Act. Further work must now be undertaken to develop future customs procedures at the UK border, clarifying tax systems and arbitrations processes, and the development of a funding system to replace the EU funded projects and schemes that support higher education, research, infrastructure development, regeneration, skills programmes and business support schemes.

It is important that the UK government reflects the priorities of our business communities across all the nations and regions of the UK. This is particularly acute in Northern Ireland, which is the only part of the UK that shares a land border with the EU. Businesses want no return of a hard border on the island of Ireland, so that we can maintain free trade and people flows across the border and limit any new bureaucratic arrangements.

Both the main UK political parties have set out their wishes for a comprehensive agreement with the EU that delivers a smooth, orderly Brexit. The business community is a willing partner in ensuring this outcome, and that the UK emerges from this process ready and able to take advantage of future opportunities for prosperity and growth.

Ashley Shackleton

Head of Public Affairs, British Chambers of Commerce

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