5 ways Brexit could benefit your business
Theresa May has vowed to trigger Article 50 by March 2017 with Britain set to leave the EU by 2019. We look at some advantages of Brexit for businesses
Prime minister Theresa May has announced that she will trigger Article 50 – thereby beginning the Brexit negotiation process – by the end of March 2017 with Britain set to leave the EU by the summer of 2019.
Speaking at a Conservative party press conference in Birmingham this weekend, May explained that the government would strike a deal with the EU to make Britain “a fully independent, sovereign country.”
May also dismissed criticisms from those who had “still not accepted the result of the referendum” of June 23 which saw the country vote to leave the EU with a 51.9% majority and over 17.4 million votes.
At the time of the result, Startups.co.uk reported how several entrepreneurs had expressed their dismay at the Brexit result; labelling it a “disaster”, a “blow to micro-businesses” and a “backwards decision”, while many had percieved Britain's departure from the EU as a new opportunity for the UK – especially for business.
Largely this thinking centres on the fact that the devaluation of the pound, which – on June 24 2016 – had fallen to the lowest level since 1985 below $1.35, brings a number of benefits to business owners.
So what are these benefits of Brexit for business owners? And will Brexit be good for the UK economy? We take a look…
The collapse of sterling has been the biggest knock-on effect of the Brexit result. While this drop will, arguably, have a negative impact on areas such as trade, for businesses that rely on tourism – particularly those in the hospitality sector – the weakening of the pound could actually be of great advantage.
Why? The sterling weakening means those in other parts of the world will get more pounds for their currency, which in turn will make the UK a cheaper destination for people, i.e. new customers, to visit.
What's more, foreign holidays are expected to be more expensive and passport control processes are expected to become more complex – which will no doubt push more Brits to holiday at home.
Critics have argued that the Brexit result will have a detrimental effect on staffing and will impact those businesses that largely hire talent from inside the EU. However, there is an alternate argument that Brexit could actually improve recruitment options.
Brexit will see the UK allow entry to more migrants from outside the EU, such as India, China and America, which is thought to open up access to more skilled workers. It's also been argued that, on the back of Brexit, the UK may introduce a points-based entry system like that of Australia which could result in higher quality candidates coming to the UK.
3. Less Red Tape
The Vote Leave campaigners have argued that the Brexit result gives the UK full control of its future and is, therefore, a better place for businesses to thrive.
Tied to this argument is the fact that EU regulations and Red Tape – much of which has been criticised by businesses over the years – could now be removed, over a period of time, to make it easier for business owners to scale and grow their companies.
While much of this argument is speculation, IPSE CEO, Chris Bryce, has suggested that the “new era [of Brexit] must be taken as an opportunity for the UK [with] priorities to cut burdensome regulations on small and micro-businesses”.
For businesses that import, the drop in the pound could see them badly affected. Yet for exporters, the Brexit result isn't such bad news.
Alex Edwards, head of the dealing desk at UKForex, explains: “Exporters could stand to make serious gains from the pound’s performance. Many of them are busily locking in forward contracts.”
The impact of Brexit on the property market is pretty much unknown but it is estimated that overseas demand for property may increase on the back of the decimated pound; good news for property entrepreneurs.
To paraphrase Mark Posniak, managing director of Dragonfly Property Finance; “For many overseas investors, buying British property just got a lot cheaper.”