Partner and head of commercial at Ward Hadaway, Colin Hewitt
Colin Hewitt, partner and head of commercial at Ward Hadaway, looks at the legal implications of Brexit and inward investment prospects.
Making predictions is a notoriously tricky business, even for experts in their fields – ask any political pollster about 2016. However, whilst 2016 may have been dominated by global shocks to the system – the vote in favour of Brexit and Donald Trump’s election as US President – it is a fairly safe bet that much of 2017, for the legal sector, will be about dealing with the effects of those shocks.
Brexit, of course, looms largest on the horizon with the Government set to invoke Article 50 by the end of March 2017 (legal challenge to the process notwithstanding). Assuming this progresses as planned, it will start the two-year countdown to the UK formally leaving the EU, with all this entails.
This is likely to produce a lot of queries for the legal sector as clients work out precisely what the new landscape will mean for their business, their organisation and for themselves as individuals.
In some ways, this process started as soon as the result of the referendum came through and we at Ward Hadaway have been preparing briefings on what differences Brexit could bring as well as keeping clients up to date with developments. From necessity, these early horizon-scanning exercises have been fairly broad in scope since the Government has yet to reveal the precise manner of the UK’s exit from the EU, which will have a major effect on future trading, future workforces and the general economic outlook, particularly in a region like the North East which is a net exporter of goods and services.
As a result, our general stance to clients has been one of ‘watch, wait and review key agreements’. As 2017 progresses, we would expect the picture to become clearer and hence legal advisors will be able to give their clients more direction on how the changes could affect them and what action they need to take. This is particularly important as many businesses in the region are diversifying into new geographic markets and in some cases away from underperforming sectors and we are supporting them in their efforts.
One area which is equally important but has received far less attention is what the countries we trade with think about Brexit.
This is one of the reasons why earlier this year we canvassed professional services advisors at companies around the world for their thoughts. The results, garnered from our fellow members of international professional services association Geneva Group International both inside and outside the EU, varied widely from surprise and fears of a downturn in trade to those who thought the move could be a positive one for the UK and for their own country.
The exercise demonstrated how Brexit is engaging the minds of people many thousands of miles from the UK and underlined the fact that no-one has all the answers to the many questions which Brexit has brought about.
With the reality of Brexit hitting home in 2017, we would expect the pace of investment from overseas into the North East to increase. The region has already had the welcome news of Nissan’s continued investment into its North East operations with the knock-on benefits to the supply chain.
Whilst we may not see investment on such scale repeated in 2017, the efforts of various agencies in the region including Invest North East England, Business Durham, Arch and Newcastle Gateshead Initiative are helping to boost serious interest in the region from overseas in a wide range of sectors including healthcare, technology, advanced manufacturing and energy.
The legal sector plays a crucial role in helping overseas companies establish operations in this country, whether that is via joint ventures, licensing agreements or the setting up of UK subsidiaries. Ward Hadaway has been working with a number of agencies to offer these services to foreign investors, enabling them to get the best start to their North East ventures. We have also been playing a role in international trade and inward investment. In the summer, I accompanied my colleague Elaine Chan on a trade visit to Xi’an in China where we held a series of face-to-face meetings with representatives from Chinese companies interested in doing business in the UK.
There is a real appetite within China for further trade and partnerships with the UK, something likely to be bolstered by the Government’s renewed commitment to the Northern Powerhouse and its showcasing to China’s Vice Premier of potential investment opportunities across the region.
Perhaps as we look into 2017, the apocryphal Chinese phrase “may you live in interesting times” has rarely been more appropriate.