Business bosses reveal their Brexit views

With divorce terms now settled, 2018 will be a critical year in British political history, as negotiations begin on the future EU-UK relationship that could define our global role and prosperity for generations.

No pressure then.

HM Revenue and Customs' recently released trading statistics demonstrated the EU’s importance to the region.

In 2017, 81 per cent of exporters traded with the union, which accounted for 58 per cent of regional exporting value and 42 per cent importing value.

This, on its own, demonstrates the importance of the European market to the North-East economy.

Julie Underwood, director of international trade at the North-East England Chamber of Commerce says “any trading barriers that make trading with the EU more difficult will have harsher consequences for regional exporters, and the North-East economy as a whole."

She added: "Staying in a customs arrangement gives the North-East the best chance to make a success out of Brexit.

"The Government must ensure the proper support, skills and strategies are in place from day one so that businesses can maintain frictionless trade with their European partners.

“It is expected that a new trading relationship with the EU will be agreed over the summer, but we need to see clear and significant progress on this front, so we can understand its implications and how best to prepare for them."

The Cabinet has attempted to reassure businesses that 90 per cent of growth will be outside the EU.

While this is true to a degree, it’s not entirely honest.

Bangladesh is the quickest growing economy, but according to the OEC, it’s top import is heavy-woven cotton.

Given the geographical location of Bangladesh, and that Britain is no longer an 1850 cotton-weaving powerhouse, I would be amazed if negotiating a Bangladeshi trade deal was a priority.

Further, it would take 90 per cent export growth in Latin American markets to match the 3.2 per cent 2017 growth we experienced with Europe.

Expanding and developing international markets is vital to remaining globally competitive, but we shouldn’t let sound-bites undermine the regional importance of the EU market.

The major Brexit concern for regional business is the lack of communication and clarity coming from Government.

Businesses have been forced to put off Brexit preparations, as, with precious time and resources, it is simply impossible for them to adequately prepare for every and all possible outcomes.

The Chamber acknowledges the clandestine nature of negotiations, and that there’s no single solution to Brexit challenges, but the Government could certainly be doing more to help regional businesses.

Mutual recognition of Trusted Trader status, commitment to match EU investment, even customs educational support would help ease the burden of Brexit.

Businesses, however, remain confident, as the Chamber’s Quarterly Economic Survey found more were predicting higher profitability and turnover.

A major indicator was an increased demand in export orders, showing the business community is still confident the region can be globally competitive post-Brexit.

The transition agreement is welcome news, particularly in offering assurances to EU workers and extending single market access until December 2020.

By avoiding a sudden cliff-edge, businesses will have more time to adapt to the new trading environment and evaluate the future stability of their business model.

Neil Warwick, head of EU and competition law at Square One Law, shares his view on Brexit ready supply chains.

He said: “There is uncertainty and lack of clarity, which is preventing businesses from planning for Brexit.

"Alongside the Chamber, we have been working to produce a study on the impact of Brexit and supply chains, particularly in the North-East. "This activity culminates with a Brexit summit on March 29 at the Crowne Plaza, in Newcastle, where the key issues affecting business will be discussed.

“What companies at the top of the supply chain should be doing is to assess how hard borders would impact on their just-in-time supplies.

"If this means possible delays, then they will need to work with their first tier and second tier suppliers to see if they have sufficient stock and cash reserves to be able to deal with possible interruptions in supply.

“In turn, the first and second tier suppliers should work with the more generic suppliers to assess if they have the capability to deal with customs declarations, tariffs, clarification codes and rules of origin.

“Sector specific supply chains should also be working with freight forwarders to assess if they have the systems in place to deal with customs declarations and hard borders within the EU or whether there needs to be a greater use of pre-clearances or bonded warehouses.

“While Brexit planning may seem an overwhelming challenge, it will not be anywhere as difficult as trying to deal with the so-called cliff edge Brexit without any preparation whatsoever.

"Like any potential large scale change in a business having a plan, dedicating resources and taking it step-by-step will make the task seem far less insurmountable.”

Laura Kirkpatrick, business immigration specialist at Endeavour Partnership, talks about the impact on access to labour.

She said: "We have found industries such as agriculture, construction, hospitality and leisure, which tend to employ many EU workers are concerned about the status and retention of their labour force post-Brexit.

"There has been some assurance from the Government for EU citizens that have been living in the UK for at least five years, will be able to apply for settled status.

"Settled status means they will be free to live in the UK, have access to public funds and services and go on to apply for British citizenship.

"However, there is a great deal of uncertainty for those EU citizens that have been in the UK for less than five years about what will happen after the two year 'transitional period' as future immigration controls are subject to change.

"As a result of this uncertainty, many businesses in those industries are struggling to recruit and retain a sustainable labour force.

"We know of one business that could not fulfil all its job roles in its latest recruitment drive and believed this was because the UK is no longer as attractive to EU workers following Brexit.

"If the UK is no longer attractive to a wider labour force another concern is that businesses may find it difficult to recruit international talent.

"This could have a serious effect on our digital and engineering sectors that rely on global mobility to ensure businesses have the right skill-set and talented workers to maintain an advantage over their foreign competitors.

"We would advise that businesses employing EU citizens check whether their employees can apply for settled status either individually or via a representative.

A spokesman from Ryder Architecture, based in Newcastle, refers to the benefits of open markets.

"British architecture has a strong global appeal, which has allowed Ryder to break into new markets in Hong Kong and Vancouver and with our partners in the Ryder Alliance across Europe and Australia.

"In order to maintain this marketing power and trading ability, the Government needs to ensure we have the best educational routes to develop talent, open access to international markets, and support in research and innovation to develop pioneering methods of working which help keep us internationally competitive."