Brexit in 2022:
With the current socio-economic climate in Britain surrounding the cost of living crisis, labour shortages, delays for travel to European countries, and strike action, many people have been analysing to what extent Brexit plays a role in these crises. A growing rhetoric of ‘will Brexit ever end?’ and ‘could Brexit be cancelled?’ can be heard from the general public who are seemingly more and more discontent with the socio-economic situation that is unravelling within the country.
Brexit and Business:
Political uncertainty and difficulties trading due to Brexit are seeing UK Business leaders slash their investment plans, many are now pessimistic about the economic outlook.
According to this piece by the Guardian, it is now predicted that “as many firms are now planning to cut investment as to increase it” this is taken from the Institute of Directors’ latest poll, this is the weakest reading since October 2020.
The rate of economic growth in Britain has slowed along with rising input costs, socio-economic conditions are having negative impacts on many organisations and the soaring energy costs only worsen the burden faced by many.
With inflation also at a 40-year high, many cite this as a common reason for uncertainty and pessimism. According to the Guardian, almost 20% of pessimistic bosses said trading relationship difficulties with the EU was a main worry as well as custom checks and delays being introduced at the border.
Brexit and Food (A case study):
The Financial Times ran an interesting story on the 31st of July, titled “How the great British sandwich trade was derailed by Brexit, Covid and inflation.”. This article explores how trends in immigration due to Brexit and trends in working from home have caused negative impacts on the sandwich trade within Britain.
The industry saw its speedy growth as a result of increasing disposable incomes, more women in work, and cheap labour from Europe. Since the impact of the pandemic and Brexit however, it has been hit with labour shortages, degrading economic outlook and delays in trade.
When Brexit was officially pushed through the House of Commons, Britain shut its doors to the free movement of EU citizens as well as leaving the single market. In the current climate, production workers are declining in number. The pressure added from inflation has also affected the industry.
Now the packaged sandwich industry has lost its supply of readily available and cheap labour when previously, EU nationals accounted for more than one-third of the industry workforce according to the Food and Drink Federation. Furthermore, the points-based immigration system as introduced by the Conservative Party in 2021 halted the free flow of lower-paid labour.
Brexit and Bands (a case study):
Brexit is also having a negative impact on the leisure and tourism sectors, perhaps in even more ways than you might think. While it has been widely reported about the delays for holidaymakers in France, the UK’s departure from the European Union is also reducing the number of bands that come here to perform at festivals and gigs.
The implementation of Brexit policy has brought about unexpected barriers for festival planners and goers in the UK, one of the main concerns for bands is that they now need what is called a carnet, this is an international customs document to go between the EU and UK with all of their equipment. EU bands also face the same issues when wanting to travel over here. This also extends to acts thinking of coming over from the US as if they are planning to tour Europe, the fees to go from the UK to the EU will still apply here. This has led to some bands stating they may miss the UK out of their tours entirely – this would be a massive shock to the festival industry.
While it may not be as big of a deal as the issues Brexit has caused in the food industry, festivals such as Glastonbury boast large profits. The reduction of big names to headline will inevitably lead to a decline in attendance from Britain and more generally, worldwide. At the end of March 2018, Glastonbury had a post-tax profit of £1.43 million with cash reserves of £10.6million. It is uncertain what the restrictions on bands movements throughout Britain to the EU could mean for this.
How we can help:
If your business is feeling the effects of Brexit and supply chain issues as well as high inflation, then Goodman Corporate Finance has got you covered. By taking the time and confusion out of the funding process, we will manage the whole deal for you, from the moment you make the enquiry right up to the point where the funds have been released. With our handheld and cradle to grave service, we pride ourselves on putting you and your business first, with expert guidance.
We approach every new opportunity with ‘a blank sheet of paper’, offering a number of solutions for you to choose from. This unique approach means that you can choose the right solution for your situation. We put you at the centre of your own story.
Our managing Director, Paul commented:
“The waves from Brexit are certainly adding to the choppy water that the UK economy is trying to navigate now and probably for the medium term. With further economic shocks from the war in Ukraine, inflation, rising interest rates, and rising energy costs, it is so important that your business has sufficient working capital to ride out these waves.
Our team at Goodman Corporate Finance have helped many businesses with securing working capital facilities that have sufficient headroom to help you thrive, but also survive when experiencing factors outside of your control.”
If you enjoy reading about political topics such as Brexit and how these link to business and finance, then check out the rest of the Goodman Blog.