11 Feb 2019
Presenting a brief overview of the process and the reasons why companies should take note.
Britain is staring at the precipice of its most import peacetime decision in decades. Brexit, a blend of the words ‘Britain’ and ‘exit’, has the left country and its lawmakers exceedingly divided. Simply put, Brexit is the most common reference to Britain’s decision to withdraw from the European Union.
Why is it such a make or break decision for the country? Perhaps it is mainly due to the fact that Europe is the most significant export market and biggest source of foreign investment for Britain. Membership in the bloc has played a central role in establishing London’s position as a global center for business and finance. According to government estimates, Brexit could shrink the country’s economy by 4% to 9% in the next 15 years, depending on how the separation is charted out.
The seeds for Brexit were sown in 2013 by the then PM David Cameron and the country went for a referendum in 2016. Later, Theresa May brought the House of Commons to vote thrice, after negotiating multiple separation deals with the EU. She failed all three times, costing her job as the PM. Boris Johnson – an unabashed proponent of Brexit has now been brought to deliver Brexit. However, nothing is set in stone yet and multiple scenarios are still in the reckoning. The deadline has been set for 31st October with plans to leave the EU with or without a deal (commonly referred as ‘no-deal’), a situation that many fear will be economically detrimental.
Any business/ firm in Britain with trade ties to EU and vice versa would be keeping a hawk’s eye on the developments and rightfully so, as Brexit would change the fabric of Britain’s relationship with the bloc on multiple fronts such as trade, security and migration. Brexit could potentially end free movement i.e. the right for British people to live and work in other European locations and vice versa. This could tighten the flow of skills on either side of the border. Then there are other issues such as data protection as many multinationals store and process their data on either side. Would they be allowed to continue?
Since the talks for Brexit gathered steam, many businesses have issued threats to leave Britain. Aviation behemoth – Airbus is among the list of companies that are thinking about relocating from Britain post Brexit, putting at stake the livelihood of the 14,000 people it employs directly and another 100,000 in supporting jobs. Other are also mulling.
In an increasingly uncertain environment, timely and accurate information could long way in building an effective Brexit strategy.