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Impact of BREXIT on industry and UK Regions Brexit progress and business concerns were addressed in the September Brexit Forum

O

n 5th September, the Brexit Forum

DExEU’s objective is to find the

inflation. He also notes a slow-down in

welcomed as speakers Sam

‘right balance between access [to the

Brand, Deputy Director, Market Access

common market] and obligations [to

Analysis and Insight, Department for

the EU].’ However, they recognise that

agreements that have been reached are

Exiting the European Union (DExEU),

‘access [to the common market] will not

not business concerns. For example,

and Andrew Sentance CBE, Former

be as good as it was before.’

access to the common market is one of

Member of the Bank of England's

At this stage, there is a

employment and in worker immigration. He argues that the 80 percent of

the principal concerns of the business

Monetary Policy Committee and Senior

parliamentary lock threatening any

community, and this has not yet been

Economic Adviser to PwC. The session

agreement. But, as Brand says, we ‘don’t

properly addressed.

was chaired by Angela Hepworth,

want a no-deal scenario’.

Corporate Policy and Regulation

The suggested solution in the event of no deal, to operate under World

Director, EDF Energy and Neil Sherlock

Business concerns

Trade Organisation rules, only offers

CBE, Senior Adviser, PwC.

Sentance was less optimistic on

a solution for goods, not services. The

the progress. Professional services

whitepaper admits the need to concede

A Brexit timeline

company PwC has predicted that Brexit

on services, despite the UK having a

Brand outlined the progress made this

will impact the economy by 2-3 percent

strong bias amongst the G7 countries

year. By June 2018, 80 percent of joint

negatively if a trade deal is agreed. In

towards services over manufacturing.

agreements had been decided between

the case of a ‘no deal’ this would 4-5

The final nature of the deal will

the UK and EU.

percent.

A whitepaper was published in July

Sentance says ‘we have already seen

affect how companies will react and whether they will choose to relocate.

which laid out these plans in more

a negative impact from Brexit on the

They are not yet taking direct action.

detail. The core consideration of the

UK.’ He highlights the fall in the value

He says that finalising an agreement by

report is to ensure the EU/UK free trade

of the pound, leading to a decrease in

2020 therefore ‘seems to be unrealistic

area is frictionless through a common

consumer spending and an increase in

to me’.

The whitepaper admits the need to concede on services, despite the UK having a strong bias amongst the G7 countries towards services over manufacturing

is our best hope.’ Membership of the

rulebook. The rulebook would aim to cover: • The maintenance of certain standards (e.g. environmental) • Free movement of labour • Joint institutional frameworks e.g. EU Court of justice • A facilitated customs arrangement with UK acting as an agent of the EU • The maintenance of security processes

As such, he says ‘a long transition European Economic Area could offer a model for an extended transitional period but, with no free movement of people, it crosses the UK government’s red line. He urges us to remember that, regardless of how well we negotiate, ‘the boot is very much on the EU’s foot.’ I SL

BREXIT IN UK REGIONS • UK regions have an even distribution of jobs in the manufacturing industry, roughly 8 percent in each region. • There is a bias towards financial and business services in London; however business and financial services are the biggest contributor to GDP in every region. • The regional impact – including FDI – of Brexit on the UK is predicted to be equal and shared across regions. • There needs to be a strategic approach to stimulate investment to all regions of the UK.

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