Brexit: views and needs of London business one year on
It’s been a year since the UK referendum on European Union (EU) membership delivered a majority ‘Leave’ vote. The Government then triggered Article 50, and the UK is due to leave the EU on 29 March 2019. The London Chamber of Commerce and Industry (LCCI) has marked the anniversary of the Brexit vote with a report which reflects the views and requirements of London business. Since this is such a compelling issue for London marketers, highlights of their report 'Moving Towards Brexit: London business views one year on from the EU referendum', are provided here. The LCCI makes some practical recommendations to protect the prospects for businesses. Read on to discover whether their stance supports your own organisation and your marketing priorities.
What they’re saying about Brexit
Before we turn to the survey results, these are just a few of the reactions of London business people canvassed in the study:
“As a civil contractor, we import the materials we use from Europe, so the effect of Brexit on the pound was immediate for us. Unfortunately, we haven’t really found a way to pass that 10-15 per cent price hike on to our principle contractors. We’ve had to stay commercially nimble to counter the impact of Brexit thus far.” Pieter Mayer, Director, Oxford Hydrotechnics
“We have benefitted greatly from the decline in the value of the pound, because we export all over the world, mainly billing in US dollars.” Anthony Gould, Executive Chairman, RussiaTeleRadio Worldwide
“EU nationals play a key role in the logistics sector, comprising 13% of truck drivers, 26% of warehouse workers and 9% of van drivers. These people are hugely important to our workforce but there are fears that some are already beginning to move back, due to uncertainty created by the Referendum result.” Natalie Chapman, Head of Policy – London, Freight Transport Association
“We have been faring pretty steady since the referendum, but we have been seeing an effect on the commercial side where a couple of transactions have been pulled by the European investors behind it. They have decided they do not want to invest in UK companies at the moment, and a large part of that is the uncertainty about what the position is going to be around EU workers.” James Simpson, Partner and Head of Employment, Blaser Mills LLP
“We have been hugely affected already. Normally we have three to five construction contracts on at any one time. In 2016, our last construction contract completed in March, and despite many tenders we had neither an award or indeed a decline until the end of July. So, we had nothing at all for nearly four months. The absolute reason for this was the inability of anyone to see past what was going to happen and therefore we waited for things to play through.” Will Tyler, CEO, Octink
“There is a big point about timing. Many of the businesses I work with are strategising for a three and five-year period, therefore all decisions affecting the next two years’ period of Brexit negotiations have already been taken some time ago. The uncertainty is, whether these decisions prove to be correct or to what extend businesses can influence a change to align a deal to the course they set for their business. Also, the impact of the present uncertainty will only be seen in three to five years.” Manuela Schramm, Account Manager, Electrosonic
“Part of what we do is to sell software licences. After the referendum, the pound slumped and many of our US-based suppliers made a decision to increase subscription prices, for cloud-based software and services, and this has had an impact. But overall, the effect on my business has been minor – so far.” John Odam-Adjei, CEO, Medasi
London business is pragmatic - still
Last autumn, LCCI’s first post-referendum report noted there was no sense of panic among the capital’s firms. Rather, businesses were taking a pragmatic and level-headed approach to Brexit. Overall, as can be seen from these comments, that remains the case.
The soundings and surveys undertaken for this report have found that although businesses generally agree with the broad aims expressed by our politicians – for example where it comes to pursuing the ‘freest and most frictionless trade possible’ - there are also areas of concern requiring immediate clarification.
Based on these recent soundings LCCI has put forward these recommendations including:
General sense of direction
The Mayor of London should look to minimise insecurity for London businesses by liaising with LCCI and other business groups on creating a Brexit ‘help desk’ resource to offer advice and information.
Brexit should not distract from addressing the capital’s pressing domestic economic priorities and the Government should commit to progressing London Strategic Infrastructure Projects (LSIPs) including Crossrail 2, fixed river crossings in East London and a new runway at Gatwick, after Heathrow.
Terms of trade and international opportunities
The Government should prioritise keeping tariffs on trade with the EU as low as possible, and focus on minimising non-tariff barriers including customs procedures and documentation, quotas and divergence of product standards and regulations.
A ‘grandfathering’ approach towards existing EU free trade agreements should be encouraged and supported to ensure that, post-Brexit, UK businesses can continue to trade on preferential terms.
Regulation and funding
Stability of the regulatory environment should be a priority post-Brexit, to create certainty for UK businesses.
Access to the EU single aviation market should be negotiated as a matter of priority, as well as deals with countries that currently have air transport agreements with the EU.
Migration and skills
The government should recognise the vital contribution EU workers make to the London and UK economy and LCCI continues to call for a flexible migration system for London, which is based on an assessment of need, rather than arbitrary numbers or caps.
The Migration Advisory Committee should be tasked with maintaining a separate 'Shortage Occupation List for London' (as Scotland has), based on assessment of London's skills gaps.
Transition and implementation
If a future UK-EU FTA cannot be negotiated within Article 50’s two-year timeframe, a possible solution would be to extend the negotiation period and maintain existing agreements, or if that is not possible introduce a suitable interim arrangement that allows time for a final deal to be negotiated whilst avoiding a ‘cliff edge’.
Once the new arrangements with the EU are agreed, they should be implemented gradually.
London Chamber of Commerce and Industry report
You can read and assess the full report:
'Moving Towards Brexit: London business views one year on from the EU referendum'
Surprises one year on from Brexit
Hear from academics at King's College London as they reflect on the events of the last 12 months since the referendum. What has been surprising, which implications could we never have foreseen and what will Brexit mean for the future?
Brexit: one year on
You’ll note that these views were recorded prior to the surprising General Election vote on 8 June 2017 which saw the Conservative party lose their parliamentary majority and create a deal with Northern Ireland’s DUP to secure future parliamentary votes on key issues. It seems there’s no shortage of surprises post-Brexit, with the vote signalling a new order for the country that’s taking some time to play out.
Challenges and opportunities facing marketers
Brexit is the top concern for marketers in 2017, but our recent CIM report contends that other pressing issues such as GDPR may not be getting the marketing focus they require.
CIM report: “The Challenges and Opportunities facing Marketers in 2017”
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