On 23rd June, the public will vote on whether the United Kingdom should remain in the EU. The consequences of a ‘Brexit’ would vary depending upon the terms of the nation’s departure as well as the economic climate. Businesses remain divided on whether the Brexit will help or hurt them—39 per cent of British SMEs would vote to leave the EU, while 49 per cent would vote to stay, according to a March survey. While the outcome of the referendum is uncertain, experts have begun estimating how it could affect businesses. Here are some of their main predictions for how the Brexit could be good or bad for UK businesses:
- Bad: Companies may have to pay new taxes and customs costs as well as deal with slower administration processes for conducting business with suppliers in mainland Europe.
- Bad: Companies may have difficulty hiring qualified employees from outside of the United Kingdom to address the skills shortage, and employees who are non-British nationals may be required to obtain a visa or work permit in order to keep working in the United Kingdom.
- Bad: Other countries may be hesitant to invest in the United Kingdom until it is clear that the UK economy can be successful while independent of the EU, which could weaken the pound.
- Bad: Britain’s trade relationship with the EU could be weakened if the Brexit negotiations go poorly. This situation could be further exacerbated if the United Kingdom is unable to secure beneficial trade deals with other countries.
- Good: Companies will have fewer regulations governing how they can conduct business, which could spur serious growth.
- Good: Unburdened by EU trade rules, the United Kingdom could negotiate better trade agreements with non-EU countries.
- Good: A pound slightly weakened by the Brexit could actually help manufacturers export their goods, since a strong pound is one of the main deterrents to overseas customers buying British goods.
- Good: The government will no longer contribute to the EU budget.