Member Article

Concern is growing that the UK won’t be strong enough after Brexit, says research

• Fewer business leaders than a year ago believe the UK will be strong enough to operate independently after Brexit.

• Confidence has dipped significantly in other areas too over the past year – e.g. more business leaders are expecting inbound investment to reduce after Brexit.

• Business leaders are taking action but could be putting off big decisions.

• Having already pulled projects, or planning to do so, 15 percent of business leaders are being held back by Brexit uncertainty.

UK businesses are less convinced than they were a year ago that Britain will be strong enough to operate independently after Brexit – a sign that the prolonged uncertainty surrounding Britain’s exit from the EU has eroded business confidence.

Research conducted by Shakespeare Martineau based on a sample of 514 UK business leaders reveals that 60 percent think the UK will be strong enough to operate independently after Brexit, down from 73 percent a year ago.

Confidence has dipped in other key areas too. Based on a comparison with last year’s data, more business leaders expect Brexit to lead to a fall in inbound investment (57 percent, up from 42 percent last year) and Britain’s export market to shrink (43 percent, up from 33 percent last year). There has also been an increase in the number of business leaders who expect Britain to have less global influence after Brexit (58 percent, up from 42 percent last year).

Adam McGiveron, head of Brexit at law firm Shakespeare Martineau, said:

“The comparison reveals that business confidence has slipped significantly over the past year and this is probably due to the current information vacuum that exists around Britain’s Brexit plans. Without more information, it is inevitable that business leaders will feel less equipped to make clear decisions about their investments and marketing activity. However, there are some areas that businesses can focus on now – including reviewing their employment profile, supply chain agility and responsiveness to regulatory change.”

The research shows that business leaders are taking some action to prepare for Brexit, despite some evidence that they are putting off bigger decisions including changes to the operational structure of the business. The actions UK businesses are most likely to have taken, or plan to take, include analysing different trading options; communicating with stakeholders about the implications of Brexit and considering the future of tariffs. The actions businesses are least likely to have taken, or plan to take, include moving functions or operations from the EU to UK; moving functions or operations from the UK to elsewhere within the EU and setting up a Brexit Action Group.

Adam McGiveron, said:

“Businesses are putting off big decisions about how to adapt their operational structure. Most of them - 55 percent - believe the UK Government will secure a partial trade deal – potentially giving businesses curtailed access to the Common Market - and this may be influencing their decision to sit tight for now.”

When it comes to pulling investments or other strategic projects, 15 percent of business leaders say they have done so, or plan to do so. Whilst a relatively modest number, this finding is significant because such investments are likely to be focused on pursuing growth or market opportunities. Some respondents also commented that while they had not ‘pulled’ a project as such, some had been cancelled or not renewed.

A primary concern for life after Brexit is access to skills - 78 percent of UK business leaders are concerned that immigration will be needed to fill skills gaps after Brexit.

Adam McGiveron, added:

“The likelihood of reduced access to skilled workers is deeply concerning for many businesses and some are planning ahead by looking for talent outside the EU or investing in upskilling projects.”

This was posted in Bdaily's Members' News section by Shakespeare Martineau .