EU Referendum: The Result

After months of campaigning and talk, we have a result…

So here we are. After all the campaigning, debating and mud-slinging, the votes have been counted and the announcement made. Finally, after what seems like an eternity, we now know the outcome of ‘the most important political decision for a generation’. The UK has voted to leave the European Union.

With a turn-out of 72% (the largest of any UK-wide vote since the 1992 general election), 52% voted to leave, while 48% wanted to remain. Overall, the Leave campaign came top in nine of the UK’s nations and regions with only London, Scotland and Northern Ireland favouring Remain. Contrast this with the first referendum on the UK’s membership of the European Community back in 1975, when the UK voted to stay in by a clear margin – 67% vs 33%.

The 2016 result will have come as a shock to some, less so to others. Some will be happy, some will be sad. The political fallout has been predictably dramatic and the speculation over the future of the UK rampant. At the very least it has had us talking about something other than the weather. So what of the future? The truth is no one really knows; the fact remains that only one country (Greenland) has ever left the European Community (as it was then), and that was over 30 years ago, so it’s fair to say that we are sailing into unchartered territory. One thing is for sure, it’s going to be quite a journey.

Amid the sea of speculation about the future, here we have collected some comments and views (with maybe a little more speculation thrown in for good measure!) from the national and local business communities.

David Sheppard, Chairman of the Sussex Chamber of Commerce and Dr Adam Marshall, British Chamber of Commerce Acting Director General:

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.

Business will 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.

Firms want help to get Britain back to business at a time of great uncertainty. The health of the economy must be the number one priority – not the Westminster political post-mortem

Mike Cherry, National Chairman, Federation of Small Businesses:

FSB calls on the Government for clarity on what these decisions now mean for business, including how businesses will have access to the single market and the free movement of people and trade.

Nearly a quarter of FSB members export, with the majority exporting to the single market. Access to the single market means access to 500 million potential consumers, more than 26 million businesses and is worth 11 trillion euros. We call on the Government for clarity on the impact to smaller firms who export wider afield through EU FTA agreements.

These are crucial questions that need to be answered swiftly to ensure the UK’s 5.4 million small business confidence does not fall any further, which is already at the lowest levels since 2013. This includes clarity over the practical implications of this result on how smaller firms do business.

Carolyn Fairbairn, Director General, Confederation of Birtish Industry:

The first part of the plan must be to get strong, calm and decisive leadership in place as soon as possible. Never has there been a more important time to put the interests of the country ahead of party politics. Businesses welcome the Prime Minister’s announcement of a delay in triggering Article 50 to create breathing space, but need rapid clarity on who is making the decisions.

Second, we must agree the principles that should underpin our new relationship with Europe and the rest of the world. At the highest level, the government should resolve publicly to preserve the openness of the UK’s economy, one of its greatest strengths.

This means seeking to protect tariff and barrier-free access to the Single Market, ensuring companies are able to continue to attract the best people to the UK with the skills we need, while recognising public concerns about immigration. And, it means setting out clearly how the UK will agree the right international trade deals with the wider world.

The third action we must take is to forge close and deep collaboration between business of all sizes across the UK and the government to help shape our future economic relationships. The CBI and business leaders across the UK stand ready to work with the new leaders of our country to help chart the future course, starting as soon as practically possible.

Mark Waters, Investment Manager, Skerritts:

The referendum result came as a surprise to many people, and certainly to markets. A remain vote had been expected by currency traders, right up until just after 10pm on Thursday night with Sterling rising against the Dollar. However, things quickly unwound as results started to come in with the Pound then plunging. As expected Equity markets followed suit with sizeable falls across UK & European stock markets this morning.

We are now entering unchartered territory but the key thing is not to panic. The fact that the result was announced on a Friday was a good thing. It allowed a weekend for markets to digest the outcome, rather than having an immediate three day open period in which they would be reacting “in public”. After the initial shock we think markets will adjust to the new reality relatively quickly, given the two year exit period, and attention will turn quite rapidly towards the next “unknowns” that are approaching throughout the Summer – namely the Spanish election, the Italian Referendum and the US Election.

Shweta Jhajharia, Entrepreneur and Business Coach:

With the UK’s decision to leave the EU, we have now entered a period of extreme uncertainty. What is certain though is that the decisions made by small and medium enterprises (who make up about half of the economy), over the next few months will determine more than ever their individual success in this environment.

SMEs generally have a low bandwidth when it comes to market information, cash flow and talent pool – all factors likely to be disrupted over the next few years. The pressure here can also quickly affect performance, and begin to affect profit margins. For SMEs with very little cash reserves and balance sheet strength, this could even threaten their very survival.

However, the uncertainty and the confusion in the market will mean the best of times for those who are entrepreneurs in the true sense of the word – those who know how to actively seek out opportunities.

Commercial prudence will eventually prevail over instinctive reaction. There are SME owners who are going to thrive under the Brexit. These are the SME owners who have the financial literacy to understand the numbers in their business, those who are watching their margins closely, who are already planning on how to cast a wider net to draw in better talent, and who are constantly looking for ways to increase opportunities in their pipeline. These SME owners will be learning how to protect their business well, strike when they have opportunities, and develop their own skills and competencies to negotiate effectively with the big players in the market.

There may be reason to lament the exit of the EU, but the SME owners who are fastest to come to terms with the reality of Brexit are the ones who are going to thrive and continue on their paths of success and create the best of times for their business.

James Strickland, Co-founder and Group Sales Director, Passionate About People:

It is possible that the government will negotiate a Norway-type deal to remain as members of the European Economic Area (EEA) to maintain access to the single market, including free movement of workers.

Another option for the UK is to adopt the Swiss approach and create bilateral trade agreements with certain countries, whereby an arrangement could be made between EU nationals currently working in the UK, and UK nationals currently working in EU countries.

A fast-track visa process is still on the cards for the supply of skilled workers to travel and work within the EU, but this is also likely to be affected following a change in the government of border controls.

Brexit has won, however, one thing is for certain: nothing will change overnight – negotiations, meetings, deals and formal resignations could take years to put in place.