Business and political reactions to BREXIT

June 24, 2016

James Ramsbotham, chief cxecutive, the Chamber (NECC):

“A significant number of our members are worried about the impact of leaving. The focus for us now is to ensure these business concerns are addressed. It is vital the Government ensures minimal disruption to trade and investment as the process of change begins.

“We also need to see measures to reassure businesses on issues such as access to overseas talent and the future of regional funding streams.

“We have an export record which is the strongest in the whole country and this must not be compromised as the decision to leave becomes a reality. The Government must now secure the best possible ongoing relationship with Europe and the rest of the world to enable sustained business growth in our region.”

 

Carolyn Fairbairn, CBI Director-General:

“The British people’s vote to leave the EU is a momentous turning point in our history. The country has spoken and it’s for us all to listen.

“Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt.

“The urgent priority now is to reassure the markets. We need strong and calm leadership from the Government, working with the Bank of England, to shore up confidence and stability in the economy.

“The choices we make over the coming months will affect generations to come. This is not a time for rushed decisions.

“The CBI will be consulting its members and business is committed to working with Government to shape the best possible conditions for future prosperity.”

 

Andrew Hodgson, chair of the North East Local Enterprise Partnership (LEP):

“Last night the people of the North East clearly voted to leave the European Union (EU).

“The North East LEP is committed to improving the economic success of the North East irrespective of the political landscape. We are very aware of the many ways in which this region has benefited from being a member of the EU.

“This has included access to European trade and investment and European funding, which has helped to regenerate our towns and cities, support business growth and investment in science and support many of our rural stakeholders including farmers.

“We will be seeking assurances from the Government that it will help us reduce the impact of leaving the single market in terms of funding, jobs and investment.

“The North East is the only UK region with a positive balance of trade. Working with our public and private sector partners our focus must be on maintaining this status quo and supporting those who will be most affected by the decision to leave.

“We have a very clear Strategic Economic Plan. It is now more important than ever that our entire community commits to increasing its skills base and creating more businesses, whilst taking more local control of our choices.

 

Cllr Nick Forbes, leader of Newcastle City Council

“Even though I campaigned to remain in the EU, there is no point expressing regret about the outcome of the referendum. We must respect the will of the people.

“As Leader of Newcastle City Council it is my role to ensure that our city is protected and not divided as we consider the implications of an exit from the EU.

“By its very nature the referendum campaign was divisive with strong views and opinions expressed on both sides. The results show that we have been divided as a country – between north and south, urban and rural, young and old. There must now be a healing process. We must come together to decide what sort of country we want to be in the future.

“During the negotiations about what happens next it is essential that local government has a seat at the table. So much of what the EU does impacts first and foremost on local government – from investment and development, to environmental standards food standards and equalities it is local councils that experience the greatest impact.

“We should not assume that the only transfer of powers and investment should be from Brussels to Whitehall. We have an opportunity to ensure that we embed devolution to local areas as the exit process is established.

“We recognise that, as a modern, vibrant and outward looking city, we cannot afford to withdraw from the world and put up the shutters. Nor can we rely on Westminster to look after our interests. We will be ensuring that the case for Newcastle and the North East is clearly heard in the difficult weeks and months to come.”

EU, Mike Cherry, National Chairman at the Federation of Small Businesses (FSB):

“The events of the last 24 hours have been momentous and the effects have already been seen on the markets. Clearly the EU Referendum debate has been contentious, but we now call on the Government and all parties to bring stability for the business community.

“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.

“FSB will continue to be a constructive partner in any upcoming negotiations, ensuring the voice of smaller firms is heard loud and clear.”

 

Mark Hatton, senior partner for EY in the North East:

“The initial impact of the vote to leave the EU will not be felt straight away as we will still be full members. Although we may start to see investments being delayed, M&A put on hold, and possibly a decline in job mobility.

“The longer term picture however is where we expect most impact. Businesses across the region must use the next few months to assess their position in terms of trade, migration and regulation. Europe is a significant investor in the North East, as our recent UK Attractiveness Survey shows, in particular from France and Germany.

“Organisations need to assess their access to markets, exports and imports and the relevant impact on their supply chains too. Access to skilled staff will be high up the agenda for some sectors. Changes in regulation are possible, which may impact on standards and future investment. Government policy is also highly relevant, for instance, in terms of taxation, EU research funding and potential use of state aid by UK Government to back selected sectors.

“We do not know the exact changes that we will be facing over the coming years, but this time can be well-spent by strengthening current positions and relationships, planning for the most-likely scenarios and looking out for new opportunities that will come.”

 

Bill O’Neill, head of the UK Investment Office at UBS Wealth Management:

[Market impact] “Westminster, Brussels, the Bank of England and the European Central Bank will be under immediate and immense pressure to calm the markets. But the markets will not wait, they are a discounting machine and they will overreact first, think later.”

“Over the next 12 months we expect sterling to fall toward 1.30 against the US dollar, gilt yields to fall back towards 1 per cent and the FTSE100 to drop by 10 per cent from levels before the vote. The euro and European equities will also come under pressure with the whole European project now under something of a cloud.”

[Economic impact] “One thing is clear today: the UK economy will be negatively impacted over the near term. The degree of harm will depend on whether the terms of exit are harmonious or acrimonious.”

“A smooth transition of power is likely to see a deceleration in the economy, but falling just short of a recession. Uncertainty will remain, but be contained. Expect the second half of the year to be characterised by stagnation.”

“A confrontational, vexatious transition could see the UK courting a recession in 2017. We would expect a prolonged period of uncertainty and consumers will very quickly sense the challenges out there. The Bank of England will be under pressure to cut interest rates and/or reintroduce quantitative easing.”

[Political impact] “The ramifications of this unprecedented ‘leave’ vote won’t be fully understood for some time.”

“Domestic politics will dominate in the coming months. Either way, government leadership will suffer, at a time when a number of crucial decisions need to be made.”

 

Mark Walton, MD of Walton Robinson:

“Europe has to change or this will just be the start of counties leaving.

“The same concerns from the richer countries have to be addressed: Interfering in legislation, spending and immigration.

“If Europe can address these issues there is a chance they could survive and we could join Europe again but in the meantime we should batten down the hatches and regroup as there are going to be some major obstacles to overcome and opportunities to restructure.”

 

Richard Lambert, chief executive officer at the National Landlords Association (NLA):

“Let’s just everyone, take a long, deep, calm breath. Leaving the EU is completely unknown territory, and jumping to conclusions isn’t going to help anyone.

“We welcome the Mark Carney’s steadying words and his reassurance that the Bank of England and the Treasury have extensive contingency plans in place to ensure the country’s financial stability.

“Any knee-jerk reaction will have a real impact on our members’ mortgages, tenants’ rents and overall confidence in the market.  So we would urge the policy as regards to interest rates should be, to continue the Prime Minister’s analogy, one of steady as she goes.”

 

Independent North East mayoral candidate Jeremy Middleton:

“Now more than ever the North East needs a strong voice and the Government must ensure that our BREXIT deal works for us. It must confirm that it will replace every penny of EU funding the region loses by implementing a UK regional aid policy. The new era will need to embrace comprehensive free trade deals that benefit our region’s manufacturing exporters, we know they have the capability to thrive wherever the markets are.”

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