19005763 Crina Sipoteanu

 What effect do you think Brexit will have on the UK Businesses?

The Great Britain’s journey together with EU begun in January 1972, when the Treaty of
Accession approved Edward Health, leader of the Conservative Party. Since then, UK
adopted the European Legislation regarding trading services, capital and goods, agriculture,
people’s free movement and social security for migrant workers. After almost 50 years of
being a EU member, on 23th of June 2016, UK decided after a referendum that the island is
prepared to leave European Union and having the resources needed, it will be prosperous.
(A history of the UK’s EU membership, 2016)
Since then, Brexit became a challenge and it could affect every single area, including the
business department, whether it will be done by a withdrawal agreement or by a ‘no-deal’
one. As an EU member, UK is also a member of single market and customs union. This
means that all members work as a union trading area with no traffic and border check or
fees. According to a publication released in July by the official site of the UK Parliament, at
present, UK an important trading member. In 2018, UK exported goods and services to the
EU worth £289 billion (46% of all UK exports) while the imports worth £345 billion (54% of
all UK imports). (Ward, 2019)
In the event of a no-deal withdrawal, the trade between Europe and UK will be regulated on
the basis of international principles rules from the World Trade Organisation. As an
example, third country rules will apply to UK for tariffs, customs control and checks that EU
requires to be taken. This could cause a massive disruption for goods and services exchange.
Moreover, a no-deal scenario could also have an impact on various other areas such as
regulatory frameworks that will have an impact on how UK will negotiate the trading
conditions, transport and logistic issues or product regulation for goods. (Government
Offices of Sweden, 2019)
A publication by the House of Commons Library states that UK’s economy is compound of
about 80% from services, 46% of UK exports and 28% of imports. Also, the imported food by
the country that comes from EU is around 70% and the one which is exported worth £22
billion in 2018. These statistics shows the important place that UK has regarding trading and
how these could change in an event of a no-deal withdrawal. (Jozepa and Ward, 2019)
Another major issue that Brexit may underline is that international businesses could decide
to move their sites in Europe. As most of hiring, trading or data exchange between nations
regulations will change, Brexit could put businesses into not so favourable positions where
they may restrain hiring plans and investments. Also, costs will face an increase for import
and export businesses. All of these could cause businesses to leave UK and relocate to other
European Union members who will still be ruled by European legislation. (Burroughs, 2019)
Barclays already approved the move of its business in Dublin under the argument that it
“cannot wait any longer” for a Brexit contingency plan to be implemented. This will involve
5000 clients relocated to Dublin, so a loss of 15% of bank’s assets that could have been
conducted in the UK. This plan is set to be in place by 29th of March and it has been
determined by the option of a “no-deal” Brexit which will affect the “passporting” rights.
19005763 Crina Sipoteanu

This gives businesses the possibility to invest in services outside UK borders, in EU countries.
(BBC, 2019)
On the other hand, another even more important change that UK will have to face is that
the EU freedom of movement would end immediately in a no-deal Brexit. Under this
circumstance, British citizens might lose the EU citizens’ rights such as using only the
passport to cross borders in EU while, EU migrants would not be able to be a UK resident
without a visa. (Wright, 2019)
A report conducted by Chris Morris, a correspondent of BBC, shows that the EU migration
significantly lower in June 2018 (44%) compared to June 2016 (66%). Also, the Migration
Observatory at the University of Oxford found out that 7% of overall jobs are occupied by
EU migrants, a more significant amount was noticed in the NHS where 19% of nurses are EU
citizens. (Butcher and Schraer, 2018)
Nonetheless, Brexit is a sum of assumptions and fictive plans that not only businesses across
UK took into consideration, but also other departments such as education or health. The
uncertainty surrounds the position of UK after Brexit leaving questions marks on social,
economical, financial and cultural areas.

Bibliography:

1. BBC (2019) BBC. Barclays shifts billions of pounds to Dublin because of Brexit [online], 30
January 2019. Available from: < https://www.bbc.co.uk/news/business-47060676>
[accessed 29 October 2019].

2. Burroughs C. (2019) Business Insider. Companies are fleeing the UK no matter what happens
with Brexit. Here's all the damage that's already been done [online], 13 March 2019.
Available from: <https://www.businessinsider.com/brexit-damaged-city-of-london-2018-11?
r=US&IR=T> [accessed 29 October 2019].

3. Butcher B. and Schraer R. (2018) BBC Reality Check. Brexit: How has immigration changed
since the referendum? [online], 19 December 2018. Available from: <
https://www.bbc.co.uk/news/uk-46618532> [accessed 29 October 2019].

4. Government Offices of Sweden (2019) Government Offices of Sweden. What does Brexit
mean for the business sector? [online], 18 September 2019. Available from: <
https://www.government.se/government-policy/brexit/what-does-brexit-mean-for-
businesses/> [accessed 29 October 2019].

5. Josepa I. and Ward M. (2019) House of Commons Library. Brexit and trade in services
[online], 8 October 2019. Available from: <
https://commonslibrary.parliament.uk/brexit/brexit-and-trade-in-services/> [accessed 29
October 2019].

6. Ukandeu.ac.uk ( 2016) The EU and the world. A history of the UK’s EU membership [online],
15 June 2016. Available from: < https://ukandeu.ac.uk/explainers/factsheet-on-timeline/>
[accessed 29 October 2019].
19005763 Crina Sipoteanu

7. Ward M. (2019) House of Commons Library. Statistics on UK-EU trade [online], 24 July 2019.
Available from: < https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-
7851> [accessed 29 October 2019].

8. Wright G. (2019) Institute for Government. British citizens in Europe after Brexit [online], 10
July 2019. Available from: < https://www.instituteforgovernment.org.uk/explainers/british-
citizens-europe-after-brexit> [accessed 29 October 2019].