EU Referendum: Yorkshire business leaders react to the leave vote

In the wake of the EU Referendum outcome, which saw 17,410,742 (51.9%) people vote to leave the EU against 16,141,241 (48.1%) who voted to remain, Bdaily wanted to find out the reaction of business leaders across Yorkshire.

Although the UK is now headed into uncharted waters, the outcome was also backed by our region. With more than 2.5 million votes cast in Yorkshire, 1,580,937 supported the leave campaign whereas 1,158,937 voted to remain - a 58% to 42% outcome.

As the country now begins the process to leave the European Union, we look at the immediate reactions from the businesspeople of the region.

Stuart Watson, EY’s senior partner in Yorkshire and Humberside:

The initial impact of the vote to leave the EU may not be felt straight away as we will still likely be full members during the negotiations. There is a risk that we may see investments continuing to be delayed and transaction activity continuing to be put on hold in the face of heightened uncertainty.

We do expect significant amounts of volatility in financial markets in these first few months. As Yorkshire has a strong financial sector, this could be adversely affected in the short-term.

The longer term picture however is another matter. It will be a long time before we know what the new rules are. Businesses across the region must use the next few months to assess their position in terms of trade, their people and regulation.

Europe is a significant investor in the Yorkshire region, as our recent UK Attractiveness Survey shows, in particular from the Netherlands, Germany and France.

Organisations need to assess their access to key export markets, imports and the relevant impact on their supply chains. Access to skilled staff will be high up the agenda for some sectors.

Businesses across the region will also be keeping a close eye on any changes to regulation and to Government policy, particularly around issues such as taxation, EU research funding and potential use of state aid by UK Government to back selected sectors. Although any changes are likely to take time to come through.

We do not know the exact changes that we will be facing over the coming years, but this time can be well-spent by strengthening current positions and relationships, planning for the most-likely scenarios and looking out for new opportunities that will come.

Paul Houghton, Partner and head of the Sheffield office at Grant Thornton:

The referendum has delivered a decision by UK voters to leave the EU. Whilst we know a majority of our clients favoured remaining in the EU and leading into the vote, many businesses felt there was still a marked lack of qualified information on what the impact of a vote to leave would have on UK businesses, the important thing now is to focus on the future and building a strong and vibrant UK economy outside the EU.

After initial market volatility, we can expect a period of instability and uncertainty. It is important to bear in mind that very little changes immediately, so businesses should stay calm, review their contingency plans and start considering the mid-long term opportunities whilst the dust settles. Organisations need to assess the risks to their business and develop strategies which mitigate these, or indeed, capitalise on new opportunities.

No Member State has left the EU before and there is no agreed process for building a UK outside the EU. Business needs to lead this debate and help shape a vision of what a vibrant UK outside the EU will look like. The world is changing fast, driven by technology and social change, and we need to create a UK that can harness this change rather than ignore or resist it.

We hope the government will now prioritise the concerns of business and focus on areas which enable a more dynamic, vibrant UK economy to emerge over the coming years. This includes prioritising the negotiation of trade deals within, and outside of, the EU to support business growth.

Businesses also want the government to review UK employment legislation and reach agreement on rules governing competition, state-aid and anti-trust regulation as soon as possible.

At Grant Thornton we see our purpose as shaping a vibrant economy. We will use our position at the interface of public, private and third sectors to convene thoughts and lead a debate to give a voice to dynamic organisations in developing a new vision of a vibrant UK outside the EU.

This is one that builds trust in markets, unlocks sustainable dynamic growth and creates places and environments where business and people can thrive.

Jill Thomas, Sheffield Chamber of Commerce President and MD of Future Life Wealth Managements:

In the wake of the electorate’s historic decision to leave the European Union, the immediate priorities for UK business are market stability and political clarity.

Some business people will be pleased with the result, and others resigned to it. Yet all companies will expect swift, decisive, and coordinated action from the government and the Bank of England to stabilise markets if trading conditions or the availability of capital change dramatically.

Firms across the UK want an immediate and unambiguous statement from the Prime Minister on next steps, along with a clear timeline for the UK’s exit from the European Union.

Business will also want to see a detailed plan to support the economy during the coming transition period - as confidence, investment, hiring and growth would all be deeply affected by a prolonged period of uncertainty. If ever there were a time to ditch the straight-jacket of fiscal rules for investment in a better business infrastructure, this is it.

Businesses need action to maintain economic stability, a timeline for exit, and answers to their many practical, real-world questions about doing business during and after this historic transition.“

Richard Wright, Sheffield Chamber of Commerce Executive Director said: “Britain needs businesses nationally and locally to get up to full speed quickly despite this time of great uncertainty. The health of the economy must be the number one priority – not a political post-mortem that distracts everybody from the job in hand.

“The country has operated with a massive trade deficit for far too long and we are building enormous debts. It is recoverable but we have to operate in a different way and this needs significant changes to business support mechanisms amongst other things.

Now is the time to ditch the old box ticking, process driven systems that eat money in layers of bureaucracy. International Trade and start up support needs to be commercially focused using people who have been there and done it, and aligned to the regional economic strategy.

Exiting Europe and the Devolution program give us the opportunity to change this but do the Combined Authority have the vision to do things differently to the way they always have?

Dan Fell, CEO of Doncaster Chamber:

Throughout the referendum campaign the Chamber remained neutral, acknowledging that like the public, opinion on this issue was deeply divided amongst the business community. Today’s result will therefore delight some Doncaster businesspeople whilst leaving others disappointed.

However, the British public have spoken and the business community will now unite to call on Government, the Treasury and Bank of England to stabilise markets and to foster a climate of stability and confidence. Businesses will also be reminding government to take very seriously the act of extricating Britain from the EU on the best possible terms, whilst also ensuring that full attention is given to key domestic issues such as: skills, infrastructure investment and devolution.

Locally, the Chamber – working with local partners – will seek clarity from Government on what this means for Northern economies like Doncaster. Doncaster has benefited significantly from European funding in recent years – including investment in our borough’s infrastructure.

We now need certainty that the borough, under new governance and funding arrangements, will not only do as well as it has in recent years – in relation to economic development funding – but that it will fair better.

The fact that there was such a split between London and the North when it came to voting patterns, should highlight the need for government to take this issue very seriously and move beyond catch phrases such as the “Northern Powerhouse” to work with the private sector to deliver on wealth and jobs for all parts of the UK.

That said, for the majority of Doncaster businesses, today will be very much business as usual.

Today’s news will bring short term uncertainty; however, the Chamber remains confident that the recent economic growth we have enjoyed in Doncaster will continue apace. Doncaster Chamber will continue to support its members as normal and any firms facing challenges as a direct outcome or anyone with specific concerns about the EU Referendum should contact us.

Martin Jenkins, practice senior partner at Deloitte in Yorkshire:

The British public have spoken and made clear that they see the UK’s interests best-served by leaving the European Union. While the UK has opted for a future outside the EU, Britain remains a competitive, innovative and highly-skilled economy and an attractive place for business.

However, as indicated by today’s market volatility we are likely to see a period of uncertainty. Businesses need to ensure they are set up to navigate the immediate risks and impacts of an exit, and have the processes and people in place to manage a period of upheaval.

Against this backdrop of uncertainty, British businesses must continue to be proactive in finding ways to raise productivity and drive growth. The UK remains a world leader in R&D and a hub for innovation.

This will help businesses capitalise on the opportunities and respond to the competitive threats created by the leave vote. They must also play an active role in setting a vision for a new, post-EU environment which is open, pro-growth and delivers prosperity and opportunity for all.

Andrew Watters, tax partner at Irwin Mitchell Private Wealth:

Now that the UK has voted to leave the EU, it will be interesting to see whether there are any substantive tax changes.

VAT is, of course, an EU tax but it will be surprising if something very similar is not introduced as it generates huge amounts of tax for the Government. As ever, the tension will be between reducing tax to generate more trade and increasing it to get more money for state spending.

One area of tax where there will be less influence post-Brexit is in the internal EU bodies set up to combat aggressive tax avoidance, that is where the amount of tax payable in any one jurisdiction can be minimised by shifting profits into a lower tax jurisdiction.

Much of the tax planning by large international companies relies on mismatches between the rules of different jurisdictions.

The EU made a statement earlier this year about work being done with national governments to have a more joined-up approach to counter this sort of tax avoidance. A UK which is not part of the EU is likely to have less influence in such initiatives.

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