BCC publishes Brexit report

The British Chambers of Commerce (BCC) has published a “business blueprint” for the UK government ahead of the upcoming Brexit negotiations. The Business Brexit Priorities report, published today (28 February), has gathered together feedback from over 400 businesses at 16 Chamber-hosted focus groups, along with nearly 20,000 responses to Chamber surveys” and aims to put forward priorities for action across seven key areas where the BCC says business communities “want practical solutions and certainty”.

In a statement issued today, the BCC said:

“The key recommendations in the report are:

• On the Labour Market, the government should provide certainty for businesses on the residence rights of their existing EU workers, provide clarity on hiring from EU countries during the negotiation period, and avoid expensive and bureaucratic processes for post-Brexit hires from the EU
• On Trade, the government should aim to minimise tariffs, seek to avoid costly non-tariff barriers, grandfather existing EU free trade agreements with third countries, and expand the trade mission programme
• On Customs, the government should develop future customs procedures at the UK border in partnership with business, seek to maintain the UK’s position as an entry point for global businesses to Europe
• On Tax, the government should guarantee that HMRC is appropriately resourced to help businesses through the transition process, and provide clarity on whether VAT legislation will continue to mirror current core VAT principles
• On Regulation, the government should ensure stability by incorporating existing EU regulations into UK law and maintaining these for a minimum period following Brexit, and ensure that product standards are aligned with, and recognised by, the EU to keep UK products competitive
• On EU funding, the government should maintain UK access to the European Investment Bank, and ensure there is no funding ‘cliff-edge’ for areas in receipt of EU funding
• On Northern Ireland, the government must avoid any return to a hard border, so that businesses can move people and goods as freely as possible.”

Commenting on the report, Adam Marshall, BCC Director General, said: “Business communities across the UK want practical considerations, not ideology or politics, at the heart of the government’s approach to Brexit negotiations.

“What’s debated in Westminster often isn’t what matters for most businesses. Most firms care little about the exact process for triggering Article 50, but they care a lot about an unexpected VAT hit to their cash flow, sudden changes to regulation, the inability to recruit the right people for the job, or if their products are stopped by customs authorities at the border. The everyday nitty-gritty of doing business across borders must be front and centre in the negotiation process.

Marcus Mason, Head of Business at the BCC, and author of the report, added: “Since the historic vote on June 23, we have worked with Chamber business communities all across the UK to determine their key priorities for the Brexit transition.

“This report brings those practical priorities together and urges the government to adopt them in the forthcoming negotiations.”

One of the claims that “Bremainers” (or those in favour of staying in the European Union) made ahead of the referendum was that a Brexit vote could spur some companies to shift at least some of their operations from the UK to EU territories. Some the BCC report suggests that this may be happening – or that firms are at least weighing their options carefully.

The possible impact of such a trend would be most visible in Northern Ireland and the Republic Ireland.

The BCC has canvassed opinion from its members in Northern Ireland, and the report noted: “Some businesses reported instances of scaling back investment in Northern Ireland and shifting investment to the Republic of Ireland.

“In response to the uncertainty caused by Brexit, and concerns about continued access to EU markets, some companies are already exploring setting up production in the Republic of Ireland and other EU countries.”

The BCC also noted that, in the face of Brexit uncertainty, “a minority of companies have even taken mitigation strategies, such as setting up new receiving companies or their own logistics infrastructure on the continent, in order to ensure the same level of service to their customers and suppliers.”

From the soundings it has taken with its members, the BCC found that: “Businesses have expressed concerns about the capacity for HMRC and the Border Force to deal with any changes to customs arrangements. Chamber members have also repeatedly stressed the importance of the  UK as a distribution hub into the EU, and that we should make sure this is not impeded by future arrangements.

“There is a lack of awareness of trade and customs processes among some exporters who currently trade exclusively with the EU. For these firms, adjustments costs are likely to be higher and they may be unprepared for changes if they are suddenly implemented. Chamber members want certainty regarding any future procedures so they can prepare for any changes.”

Click here to access the full BCC report.