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Brexit: What Is It and How Would It Affect The Business Sector?

Written by Contributor, on 22nd Mar 2019. Posted in General

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Short for “British Exit”, Brexit is the term that is commonly and currently used to refer to the United Kingdom’s decision to leave the European Union. It was decided during a referendum that was held on June 23, 2016, where voters were asked whether or not the UK should leave or stay in the EU.

The people have spoken and they have done so quite resoundingly. The vote to leave the EU outnumbered the votes to stay by over a million. However, while the decision has already been made, its execution was set to be on March 29, 2019.

But why though? Why would Britain want to leave the EU? Well, according to this article, there are three main reasons: economics, immigration, and identity.

Economics

“Why should we have to pay for that?” is the argument raised when we talk about how Britain interacts with the EU. While in the EU, Britain sends money to the EU HQ in Brussels, and that money is then redistributed to other member nations of the EU.

Britain’s association with the EU is viewed by many as an unnecessary expense and a resource drain.

Immigration

The trouble with the UK being a part of the EU is that any citizen of an EU-member nation is able to relocate and work there, without having to secure a work visa. As this rule applies to all EU member nations, this obviously includes the UK.

The argument here is that these migrants are seen to use up what little resources the UK has at its disposal as well as several social and health services.

Identity

However, the most glaring issue, especially to most of the constituents of the UK, is that they don’t consider themselves to be ‘European’, so being part of the EU doesn’t exactly make sense to them. As a member state, the UK is obliged to adhere to the policies set by the EU, some of which are restrictive and some which are perceived to border on the ridiculous, according to some.

So, How Exactly Are Businesses Going To Be Affected by Brexit?

For this, you simply have to look at what benefits the UK currently enjoys as a member state of the EU. Currently, the main benefit that directly affects businesses is that the UK is able to trade with fellow member states of the EU without having to pay tariffs. In exchange for this, the UK must allow migrants from EU member states to relocate and work without having to demand a work visa.

When Brexit finally pushes through, businesses can expect that EU countries will start requiring the UK to pay tariffs, which will inadvertently cause the cost of raw materials, especially imports, to rise.  And when that happens, the prices of consumer goods are also bound to inflate in order to mitigate the effects of the added cost of raw materials. Then, there’s also the question of workers who belong to the EU member states and who are currently under employ in the UK. It’s a sticky business scenario and you’re going to need business law experts like the professionals at the McQuarrie law firm to help you sort things out the right way.

It’s also important to note that several big companies have threatened to leave the UK because of the impending Brexit, citing the increase in the cost of raw materials. How big of an impact this will have on business across Europe is yet to be seen.

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