How Brexit will affect businesses in the United Kingdom
According to YouGov’s recent research, “Brexit is once again on the radar of people and businesses across the UK,” the poll taken on October 12, 2020, revealed that Brexit remains one of the most significant issues facing the country.
After the sets out withdrawal agreement, during which the UK voted to exit the European Union in 2016, it’s no longer news that December 31, 2020, marks the Brexit transition period. So, what’s the implication of this?
All the free trade in both goods and services, movement of employees, taxes, and duty, safety standards, and personal data will inevitably change subsequently. However, whatever the future holds, it’s more than essential for every business in all industries to take a good time in understanding how Brexit will affect their respective companies. Below is a non-exhaustive bit into how Brexit will affect business in the United Kingdom.
On Job Market and Employment
Brexit will not only have effects on job stability but will also flip the head of the UK job market. This will undoubtedly result in complexity in securing jobs by the UK workers, and massive job loss might ensue. Why?
Many businesses are already considering relocating, and new ones won’t want in. Recently, Tesla CEO, Elon Musk, cited Brexit uncertainty as a primary reason his company decided to have a new factory in Germany instead of in the UK. Recession is also very possible, therefore making hiring to be less likely. A quite implicative feat since the hiring intentions for the first quarter of 2020 are down to 2%; its lowest since 2012.
Once the UK exit the EU, the government will have no choice but to reduce, if not remove some employment right, making securement of work permit to be extremely difficult. Also, as a result of immigration control, staffing will as well be immensely impacted.
On Supply Chain
Brexit will significantly disrupt the supply chain of UK firms. Every business, ranging from agriculture, chemicals, and pharmaceutical, food and drink, clothing, and textiles et cetera that trade with EU countries will have a severe supply chain implication. This may further deliver a punch to the model set up by many UK companies in manufacturing facilities in a low-wage economy where finished goods are collected cheaply and shipped to higher-income markets.
Not only that, all the benefits like low costs in moving goods across borders, no tariff, and limited border delays will no longer apply. This is the single biggest factor that will impact business post Brexit, as identified by 17% of UK manufacturers in the supply chain disruption.
On Trade and Border Check
Especially in January, which is the peak import season for fresh foods, industry items will indeed be facing a costly delay. They would be subject to greater health controls and higher customs compliance leading to additional costs from checks. Also, there will be hold-ups at channel ports for thousands of trucks, including those carrying fresh fruits and vegetables.
Above are a salient manifestation that is most likely to accompany Brexit come January 1, 2021, and how it will affect businesses in the United Kingdom. Nonetheless, we have more information prepared by our expert to help you wither the storm of Brexit as you plan to advance your career, whether in the UK or Overseas.
