As the 29th March 2019 draws closer, many businesses, particularly SMEs, are concerned about making contingency plans in the absence of an outline trading deal with the EU. We have therefore asked head of EU and competition law at Square One Law, Neil Warwick OBE, to talk to us about what businesses can be doing now.
Neil Warwick is EU and competition partner at entrepreneurial law firm, Square One Law. He has specialised in EU law for 25 years, with particular emphasis on competition law, State aid and EU Structural Funds. Since the referendum on 23rd June 2016, Square One Law has advised a range of businesses from international brands, FTSE 100 companies to owner-managed businesses across all sectors on how to mitigate against any effects that Brexit may have on trading. Neil has given evidence before House of Commons and House of Lords Select Committees on the impact of Brexit and as the National Portfolio Chair for Brexit for the Federation of Small Businesses he has also attended numerous consultations with Government.
Why is there so much concern about Brexit?
The actual date for Brexit is approaching quite rapidly. The Government has issued over 100 technical notices, the so-called “No-deal” papers and there is still no outline deal agreed between the UK and the EU. This has led to the increased press coverage where there is speculation about a series of things that might or might not happen on 30th March 2019. Generally, businesses do not like uncertainty, so it is understandable that there is some nervousness.
Do you think this is justified?
Brexit is an incredibly emotive subject that divides opinion, almost equally through the whole country. People tend to shy away from even mentioning the topic and this has now been replicated in the Business world. I frequently get comments along the lines “it is all too difficult,” “How can you plan when you don’t know what the outcome will be.” Whilst understandable, Brexit is just another business problem – granted it is quite a big one to tackle however, there will also be opportunities for businesses.
Given how close “Brexit-day” could be, do businesses need to start implementing a contingency plan?
Short answer: Probably not.
Whilst 29 March 2019 is the date scheduled to be the day the UK legally and technically leaves the EU, there is likely to be a transitional period after that point until at least December 2020. During that period the outline of the new trading deal will begin to emerge. Provided businesses have a contingency plan, as the deal becomes clearer it should be possible to implement those areas of the plan, which may be necessary, quite quickly.
Is there a risk that businesses could be wasting their time planning for an outcome they cannot predict?
Short answer: Definitely not.
Brexit is just another business problem. Every single day businesses, particularly SMEs, have to plan for problems and for change. Brexit is just something else to plan around.
What do you think the starting point should be?
In very simple terms a “No-deal” Brexit would cause the most change to businesses. That therefore ought to be the starting point. Any other kind of deal means that businesses will not have to implement all, if any, of their contingency plans. I would recommend the mantra of “hope for the best and plan for the worst”.
Where do you advise businesses to start?
Membership of the EU confers four freedoms. Free movement of Goods, Services, Capital and People. If the UK’s membership of the EU changes, then it will be these four freedoms that could change. For example, if you send people to travel to the EU for work purposes, in the event of a "No-deal” Brexit you may need to factor in extra visas, insurances and some possible delays. It is simply a question of looking at what could change, assessing if that change will affect your day-to-day business and, if it might, what practical steps would you need to take.
Given advances in media the noise about Brexit has been amplified possibly to a point where businesses have felt discouraged from acting. It is good practice and sensible to have contingency plans for your business. It is also good practice to carry out audits and look to future growth. Arguably, businesses should have been doing this already, but it is possible the noise surrounding Brexit has crowded out some of the time for planning.
Businesses that can benefit from Brexit will have a plan.