Despite article 50 being triggered, marking the start of the official proceedings to leave the E.U, the U.K is still as confused as ever over the impact of Brexit. Credico UK has been investigating the pros and cons of both a swift and gentle Brexit and considered what the future could hold for British businesses.
Despite the UK’s vote to leave the European Union happening over a year ago, there are still huge question marks over how the process will play out, and what the impact could be on the UK economy. Credico UK released a statement this week, outlining their concerns that the majority of businesses in the UK are still in the dark as to how Brexit will affect them. ‘We hear terms such as hard or soft Brexit, swift or gentle, however to the majority these terms are meaningless and are causing further confusion as to how Brexit could impact daily life and the UK economy.’ Stated a spokesperson for Credico UK. ‘In these uncertain times, it’s incredibly important for people to break through this jargon and understand the exact implications of Brexit, regardless of which approach the government decides to take.’
In its statement, Credico UK outlined how a soft/gentle Brexit could impact the UK’s economy. Taking a gentle approach would see the UK benefit from closer ties with the EU, gaining similar perks to Norway, which despite being a non-EU member still has access to the single market. A soft Brexit could also see the UK negotiate a deal in which it can freely make trade deals with other EU countries and remain in the EU customs union, allowing the UK to bypass extra checks and tariffs on exports. To benefit from this, the UK will have to make payments to the EU to establish the freedom of movement of goods, services, capital and people. This will also see a more relaxed approach to EU nationals working and settling in the UK, which could be vital to the continued success of major industries in the UK. ‘Many businesses, especially those in service industries are worried that should the rights of EU nationals tighten, a considerable percentage of their workforce could be in jeopardy, a softer, more gentle approach could provide them with more peace of mind and a secure workforce’ outlined Credico UK.
A harder, swifter Brexit would see the UK leave the single market, which could result in better trade deals with nations across the globe, including leading economies such as the USA and China. However, this approach isn’t without risk. If the UK fails to negotiate a free trade deal, then it will fall back on the tariffs and guidelines set out by the World Trade Organisation (WTO) which could be far higher than UK businesses have been used to and have a severe impact when trading with EU countries.
‘Ultimately, while a clean and swift Brexit could offer UK companies exciting new business opportunities, it also presents greater risk’ stated Credico UK. ‘We believe that to get the best outcome; companies need to be vocal about what they want from Brexit. They need to join in the conversation, contact local MPs and get involved in the process; this is the best way to stay up to date with how Brexit could impact them, and avoid any unforeseen surprises further down the line’.