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Article 50 - What accountants & business leaders say

March 29, 2017

Article 50: what accountants and business leaders say 

When prime minister Theresa May made her statement in the House of Commons today on triggering Article 50, she made clear that her list of priorities for Brexit included “a bold and ambitious free trade agreement” with the EU, rights for EU citizens already living in the UK, protection of workers’ rights, trade agreements with non-EU countries and continuing collaboration with European partners in science, education, research and technology

 

Today Theresa May triggered Article 50 of the Lisbon treaty, starting the UK’s exit from the European Union.

 

What she said will have come as some comfort to businesses about the direction she wants to travel in but they are all too aware that there are no guarantees about the coming two years of negotiations. This is what leaders from the accountancy and business communities had to say immediately following her statement.

 

Adam Marshall, director general, British Chambers of Commerce 

“Now that Brexit negotiations are set to begin, businesses across the UK and their trading partners in Europe wants answers to practical questions , not political posturing. A pragmatic and grown-up dialogue on the real world issues, rather than verbal volleys between London and Brussels, would give firms greater confidence over the next two years.”

 

Michael Izza, chief executive, ICAEW

“I would like to see political focus placed on the Great Repeal Bill (or the Great Continuity Bill as it should be called) to ensure stability once the UK leaves. I would also like government to go further and spell out in detail why businesses should make the long-term investments necessary to secure the UK’s economic future.” 

 

Josh Hardie, deputy director general, CBI

“Businesses across Britain are 100% committed to making a success of Brexit – and getting off to a good start in the negotiations will be vital in getting the best deal.

“Companies want some early wins to create momentum towards an agreement, assisting them and their customers to maintain the confidence that has helped the UK economy beat expectations since the referendum.”

 

Mike Cherry, national chairman, Federation of Small Businesses

“The government must push for a comprehensive free trade agreement with the EU based on ease and cost, and then support small firms to take advantage of new trade agreements with priority markets around the world

“Small business exporters tell us that the EU single market is still their top market of choice, but firms are also keen to focus on the US, China, Australia and Canada.

“One third of exporting small businesses have told us they would be genuinely deterred from trading with the EU if a tariff of between 2% to 4% was imposed on trade between the UK and EU.” 

 

Stephen Martin, director general, Institute of Directors

“Maintaining confidence over the next few years will be key, and that means the government must prioritise a smooth Brexit, with the terms of the withdrawal deal and our new trading arrangement both agreed before we walk through the exit door. We’ve felt a lot of heat in the months since the referendum, now we need to see the light showing us the way to a good Brexit.” 

 

Kevin Ellis, chairman and senior partner, PwC

“Of course, the ongoing relationship with the EU should not be underestimated and we must work to cultivate a healthy relationship as it is in everyone’s interests to have a competitive EU. But, for many there will be a sense of relief that we can get on with ‘the business of business’ and focus on how we can make the best of Brexit to help shape a new future for the UK.” 

 

Steve Varley, UK chairman, EY

“There is little doubt that these will be some very complex negotiations, however with the right will on both sides, there is a way through. Business will look to politicians and negotiators on both sides to seek common sense solutions that work for both the economy and society. No one will benefit if negotiations break down.

“Talking to businesses up and down the country a strong early signal in the negotiations that both sides are committed to an orderly and phased-in Brexit deal, would go some way to provide reassurances.” 

 

David Sproul, senior partner and chief executive, Deloitte

“With a well-established legal and political system, strong infrastructure, and a language that is used throughout the business world, we should be confident in the UK’s ability to withstand the uncertainties of leaving the EU. 

“Yet while the hope is that the UK can secure the best possible deal on trade and market access, businesses must continue to plan for an exit in 2019, several years of trade negotiations, and a transitional phase to bridge the two.” 

 

Karen Briggs, head of Brexit, KPMG

“Having spoken to businesses up and down the country, it’s clear the majority of CEOs have Brexit plans and are already taking action. There is very little complacency around, now the spectre of a cliff edge situation has become a realistic scenario. People know the potential impact is huge and they need to act now.” 

 

Paul Eagland, managing partner, BDO

“Away from the politics, the businesses I speak to are rolling up their sleeves as they prepare for life outside the EU. These businesses are ambitious, high-growth and crave certainty. There will be a sense of relief that the process is finally underway and the starting gun fired.

“As the negotiating teams prepare to meet, it is vital that the UK government puts the needs of high-growth and entrepreneurial mid-sized businesses at the heart of its thinking.” 

 

Robert Hannah, chief operating officer, Grant Thornton UK

“There is one additional matter that our clients want government to address now: they want them to give a guarantee that EU citizens currently working in the UK will have a right to remain. This is creating huge uncertainty for people and the organisations that employ them. From financial services to farms; from care homes to construction. This is impacting on key parts of the economy already, not least most of our key public services, and we would call for a unilateral announcement by the government to secure their position to remain, which will also set a positive tone for more collaborative discussions with the EU.” 

 

Paul Drechsler, president, CBI

“We welcome the prime minister’s commitment to free trade and European values which should hearten those around the table and set a constructive tone at the start of the negotiations.

“This is a pivotal moment in our history and the time to be ambitious, level-headed and confident. It is in the interests of businesses across Europe to work together in absolute determination to make a success of Brexit.

“Our shared aim must be to forge a mutually beneficial deal that delivers barrier-free trade and safeguards prosperity for all. The prime minister has recognised this.”

 

Wendy Andrews, VAT director, Bishop Fleming

"Today the phoney war ends and the UK begins the process of negotiating its exit from the EU. This process will be long and complex, but once it is concluded and the UK leaves the EU it is likely that the first practical impact will be felt on sales to, and purchases from, the remaining EU.

"The fact that the government has been clear that they do not expect the UK to remain within either the single market or the customs union means that some of the implications can be set out with some certainty." 

 

Jonathan Russell, managing partner, ReesRussell, a UK200Group member

“Hopefully with the triggering of Article 50, much of the speculation and political positioning will cease, though I doubt it. We are in for a period of negotiation and in any negotiation the parties start at opposite ends of the spectrum and if successful the parties will move to a point where they can agree. 

"However there must always be a point where the parties will not pass, and it is only when those points for both sides do not meet that a deal cannot be done. If a deal cannot be done then all that can be done is to walk away - in this instance [a] hard Brexit.” 

 

 Ann Francke, chief executive, Chartered Management Institute

“EU withdrawal brings with it the chance to open up the country’s collective mindset to global business opportunities. We will fail if a culture of isolationism is allowed to grow.

“Multinational diversity has been fundamental to British business success and businesses need reassurance that EU nationals living and working in the UK will continue to have their rights guaranteed.  In important areas like hospitality, construction and technology, businesses will struggle to survive and certainly to improve productivity without continued access to overseas talent pools.” 

 

 Andrew Sentence, senior economic adviser, PwC

“Most likely, we face another two years of uncertainty before a new relationship between the UK and the EU is properly agreed. During this period we will probably see some bouts of financial volatility affecting the value of the pound and reduced business and financial confidence.

“Some businesses may hold back investment plans over the next couple of years, due to the uncertainty surrounding the UK's future relationship with Europe. These factors are likely to be a dampener on UK economic growth while the article 50 negotiations are progressing.”

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