The aftermath: UK business community reacts to referendum

The aftermath: UK business community reacts to referendum

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UK-wide

Scotland

North East

Yorkshire

West Midlands

 

UK-wide

Simon Walker, director general of the Institute of Directors, said: “While this may not have been the result that the majority of our members wanted, Britain has voted to leave the EU, and it is now imperative that our political leaders manage the transition as smoothly as possible.

“British businesses are resilient and, with their characteristic ingenuity, they will weather this storm. It is now beholden on politicians to negotiate a deal with European leaders which preserves the ability of British firms to trade easily with the remaining member states.

"One thing the Government must do immediately is to guarantee the right to remain of EU citizens currently in the UK. Companies do not want to have to worry about losing valued staff.”  

Dr Adam Marshall, BCC acting director general, said: "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.

"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.”

Guy Lougher, partner and head of the brexit advisory team convened at Pinsent Masons, said: "The uncertainties in a Brexit scenario are so great that there may be a temptation to do nothing until negotiations start to create a clearer picture. However, the days when a business can say ‘wait and see’ are gone.

“While one cannot protect against all risks, it is important that there is no panic – it is possible to identify the risk areas and get on to the front foot.  Adopting a ‘wait and see’ approach may mean doing nothing for years.

"Already we are advising our clients on the review of business-critical contracts. Agreements which specifically reference the EU as the territory governed by the contract may lack clarity. There may also be ambiguity around how the impact of tariffs will be shared.”

Bill Lynn, director of agency and investment at Lambert Smith Hampton: “Today’s announcement is not what a lot of investors and developers will have wanted.  However, while it’s true that investors dislike uncertainty, history tells us that changing markets provide opportunity and there’s certainly plenty to build on across the Northern Powerhouse.

“As politicians figure out what the consequences are, the lack of an obvious market consensus in the short term presents opportunities for those who know where to look.  We saw it during the financial crisis a few years ago, when smart investors spotted undervalued assets and then benefited from strong returns as the rest of the market caught up, as evidenced by the significant increase in northern-based foreign direct investment projects. 

“For anyone looking to take advantage of the opportunities that Brexit will inevitably present, I’d encourage you not to skimp on good due diligence or local market insight.  Knowing your market will be more important than ever, and Lambert Smith Hampton is brilliantly positioned to help with that.”

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.”

 

Scotland

Steve Williams, senior partner for Scotland and Northern Ireland at Deloitte, said: “The British public have spoken and made it clear that they see the UK’s future being better-served outside of the EU. These are unprecedented times and, with everyone getting to grips with the consequences, we are likely to witness a period of political and economic uncertainty, which will also impact on growth.

“Whatever the case, Scotland, and the UK as a whole, remains a competitive, innovative and highly-skilled economy. It will continue to be an excellent place to do business, with all the necessary attributes to compete and succeed in the global economy – whatever challenges lie ahead.

“The resilience and dynamism of the Scottish economy, led by its world-class food and drink, oil and gas, financial services and technology sectors, will be a huge advantage as we start to navigate towards a prosperous future outside of the EU.”

David Melhuish, director of the Scottish Property Federation: “At this stage we are looking for reassurance from the UK and Scottish Governments for investors and the markets. The real estate industry supports economic growth, creates jobs and delivers great places, and relies on investment for this. The priority in Scotland must remain on growing the economy and delivering the infrastructure our businesses and communities need.  

“We note the Prime Minister’s call to include the devolved governments in the process of Article 50 negotiations and we believe it is important that we understand what the future relationship with the EU will be before we consider any further constitutional questions.”  

Andy Willox, FSB’s Scottish policy convenor, said: “Scottish smaller businesses now need decision-makers to focus on economic stability. Firms in Scotland will look to the Scottish Government, as well as the UK Government and the Bank of England, to provide leadership during this period.

“We welcome the Prime Minister’s assurance that the Scottish Government, and the other devolved administrations, will be fully involved in the negotiations associated with the UK’s departure from the EU. 

“While questions about a second independence referendum will inevitably dominate the headlines, there are more immediate matters for small firms – from clarity over access to the single market to the free movement of people.”

Entrepreneurship: Annie Graham, EY’s Entrepreneur Of The Year programme Leader in Scotland, said: “The leave vote will inevitably create changes for business over the next few years, potentially disrupting markets, supply chains, labour markets and the legislative environment. Great change can spark great opportunity and innovative and dynamic entrepreneurs thrive in disrupted markets.

“Perhaps whilst larger businesses will take time to digest the news and even halt decision making, nimble entrepreneurs will be already scouting for new openings and plans will be afoot to capitalise on them. The winners will be those that can find their way through the uncertainty and deliver the best solution with speed to market.”

IPO and asset purchasing: Colin Dempster, partner and head of restructuring at EY Scotland: “IPO activity can be expected to largely cease in the next 12 months. Increased uncertainty about the impact that the vote to Leave the EU will have on listing legislation, as well as the expected devaluation of the pound, is likely to hold activity back.

“One area of increased activity, however, could be from US and EU private equity funds looking to acquire assets in the UK, particularly if there is an impact on business valuations and a lower pound. Markets will be looking for signs of clear long term plans before confidence returns and activity picks up.”

Considerations for employers: Cara Heaney, executive director of people advisory services at EY Scotland, said: “Businesses must use the next few months to assess their position in terms of their people. Clear employee communications will be vital at this time, particularly in Scotland where staff have already been through a period of uncertainty and we now have more unchartered territory to navigate.

“In the short to mid-term, businesses and HR departments are likely to need help thinking through what this means for their current recruitment plans and cross border movement of staff. Whether business visitors or formal assignments – how easy will it be for staff to continue to move freely throughout Europe for business travel and how easy will it be to fill roles across Europe by intra-company transfer going forward? 

“There is also a pastoral care point for employers with existing employees and their families currently on assignments in the EU. They will be keen to manage any immediate concerns and questions about what this means for those assignments and ongoing access to things like healthcare in member states currently facilitated by EU membership.”

EU Laws: Eilidh Wiseman, president of the Law Society of Scotland, said: “The vote to leave the EU marks the start of monumental change for the UK and our relationship with the rest of Europe. 

“While we cannot predict the full economic effects of the vote to leave on business decisions of law firms or those of their clients, it’s important to understand that the UK remains a full member of the EU until the terms of our withdrawal agreement are negotiated. There will be no immediate change to the current legal position so solicitors’ day to day practice and the advice they provide for clients won’t yet be affected.”

 

North East

Northstar Ventures: “We are obviously disappointed that the outcome of the Referendum was a vote to leave the EU, as we’ve seen first-hand the positive impact that European funding has had on the North East. While the future is uncertain at present we’re confident that, in or out of the EU, investment into the North East business community will continue.

“Throughout 2016 our Investment Team will be concentrating on investing the £6m extension to the Finance for Business North East Proof of Concept and Accelerator Funds. We are also committed to working with the UK Government, Local Authorities and LEPs, to continue to develop the ecosystem of support available to North East businesses. “

Andrew Hodgson, chair of the North East Local Enterprise Partnership (LEP), said: “Last night the people of the North East clearly voted to leave the European Union (EU). 

“The North East LEP is committed to improving the economic success of the North East irrespective of the political landscape. We are very aware of the many ways in which this region has benefited from being a member of the EU. 

“This has included access to European trade and investment and European funding, which has helped to regenerate our towns and cities, support business growth and investment in science and support many of our rural stakeholders including farmers.

“We will be seeking assurances from the Government that it will help us reduce the impact of leaving the single market in terms of funding, jobs and investment.”

Entrepreneurs’ Forum chairman Nigel Mills said: “While this was not the result the majority of the business community, myself included, hoped for, I am confident that the ingenuity and drive of the region’s entrepreneurial businesses will overcome any obstacles it causes.

“What we need now is certainty, ideally in the form of Government confirming the continuation of all business support and investment the region currently receives from the EU, and setting out a timetable for new global trade negotiations. In the North East the devolved powers agenda and the Mayoral elections in May 2017, plus our active participation in the Northern Powerhouse, should be our renewed focus.”

Robyn Peat, managing partner at land, property and business consultants George F. White: “I am genuinely shocked that the majority of UK citizens have voted to leave the European Union (EU). In my opinion, our nation’s future, both short and long term is now unknown and uncertain. We don’t know anything about the political, financial, economic and social environment that we now reside in because we now, following this result, have to negotiate it.

“Now the hard work starts and everyone has a role to negotiate and lobby for the best opportunities nationally and across the world for individuals and corporations alike.  Let’s make our voice heard.  It’s a sad day for UK politics and, indeed, the nation.”

Jo Sellick, managing director, Sellick Partnership: “From a recruitment perspective, I am extremely concerned that jobs could be at risk as a result of a weaker economy and so much uncertainty. This will affect candidates, clients and the industry as a whole.

“More specific to my sector is the wealth of legislation that has been set by the EU which is now called into question. Will we still have to follow legislation such as Agency Workers Regulations and the Working Time Directive, which came about purely as an EU incentive?

“These questions and many more remain unanswered and will likely be quite low down the priority list when it comes to negotiating on EU law, which governs so many aspects of British life.”

 

Yorkshire

Paul Houghton, partner and head of the Sheffield office at Grant Thornton: “Whilst we know a majority of our clients favoured remaining in the EU and leading into the vote, many businesses felt there was still a marked lack of qualified information on what the impact of a vote to leave would have on UK businesses, the important thing now is to focus on the future and building a strong and vibrant UK economy outside the EU. 

"No Member State has left the EU before and there is no agreed process for building a UK outside the EU. Business needs to lead this debate and help shape a vision of what a vibrant UK outside the EU will look like. The world is changing fast, driven by technology and social change, and we need to create a UK that can harness this change rather than ignore or resist it. 

"We hope the government will now prioritise the concerns of business and focus on areas which enable a more dynamic, vibrant UK economy to emerge over the coming years. This includes prioritising the negotiation of trade deals within, and outside of, the EU to support business growth. Businesses also want the government to review UK employment legislation and reach agreement on rules governing competition, state-aid and anti-trust regulation as soon as possible.” 

Richard Wright, Sheffield Chamber of Commerce executive director said: "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?”

 

West Midlands

Greater Birmingham Chambers chief executive Paul Faulkner: “The nation has spoken and there will be mixed emotions today. Those who campaigned for a leave vote will no doubt be celebrating their success and anticipating a newly defined, confident UK outside of the EU.

“But there will be many in the business community feeling uncertain and unsettled today.

“There will in the short- to mid-term at least be consequences for our economy as investors look to our political leadership for clarity on their vision for a post-Brexit UK and how it will relate to the EU, single market and trading partners across the world.

“I would ask businesses to be positive and avoid knee-jerk reactions. We have several years of negotiations ahead before this vote becomes a reality and there is still plenty of business to be done.

“Across the country we need to put division aside and come together to heal and grow a new future.

“To my mind, there has never been a vote so close and so divisive. In Birmingham there were just 3800 votes between the two camps. Now we urgently lead clarity and leadership from Government to bring the nation back together.

“We urge the Government to step up, put political and personal differences aside and act in the best interests of our nation. We need our leaders to quickly, effectively and with one voice deliver a credible plan for a United Kingdom in a new, mid- and post-Brexit world.

“At the Greater Birmingham Chambers of Commerce we will be working hard to guide and support our members through the post-referendum world as more information emerges. We will also be working with the British Chambers of Commerce and Chambers across the country to campaign hard for the needs of business.

“Now is a time for collaboration, vision and clarity.”

Lord Kumar Bhattacharyya, founder and chairman of WMG, the manufacturing arm of Warwick University, said we needed to as far as possible maintain investment in the West Midlands.

“It is the view of the people and we now have to do our best to keep our Midlands economy going. I suspect that inward investment may be difficult in the short term but hopefully will continue to come through in the long term.

“I do not believe the decision will have any effect on Jaguar Land Rover’s investment decisions albeit there are implications in terms of the strength of sterling, sales to Europe and the import of parts. Though I remain hopeful that automotive suppliers will still want to set up in the region.”

“We have to seriously look at creating employment. There are too many low paid jobs. We need to bring more manufacturing to the West Midlands and not just rely on the service sector.

“There is lots of talk about skills and apprentices – people now need to implement this. We have to create opportunities and be positive. We are in a multi-cultural society and we must put education at the forefront.”