Last week, Prime Minister David Cameron announced that the referendum on the UK's membership of the EU will take place on 23 June.
Long standing UKBF member Paul Kelly (consultant) gives his views and asks questions about the upcoming Brexit referendum.
Outside of immigration and benefits related to immigration, I have not seen anything else discussed. But, it appears that many people have made up their mind, which is worrying, as no one has really been told the consequences of such a major change.
So, for businesses, especially small to medium sized enterprises, what are the issues? Well, sadly, more than you may think! Here are a few that I have come up with:
Selling products to the EU
When an item is imported into the EU, there is, in most cases, duty applied. If we are out of the EU, will importers i.e. mainland EU, be charged import duty on UK origin goods?If yes, the cost of the UK's products, in many cases will go up by up to 14% and an awful lot more if the item is sensitive and attracts anti-dumping duty.
We could become part of the European Free Trade Agreement (EFTA), where we get the trading benefits of being in the EU without being members, but I haven't heard anything on this from politicians. Have you?
Buying products from the EU
In the opposite way, not being part of the EU will mean that we can choose our own import tariffs. But how would this be administered?Will they be the same as the EU (probably)? Will there be more administration and red tape required? Will the administration cost to government increase or decrease?
Employment
Whilst we will be able to control our borders, will employing someone from the EU mean that the migration process (and cost) is the same as people from outside the EU?Subsidies
How much will we save by not contributing to the EU coffers and will there be a net gain? The UK gets a lot of money for economical development, which goes to local and regional government, as well as being spent on infrastructure projects - some good and some bad.Will the government continue to offer this support? There is a lot of employment in various industries in this area and I would think that small businesses could be greatly affected.
Public cost
Assuming we pull up the drawbridge and become more insular, how much will the cost of revising legislation and administration be and what will it cost businesses to react?VAT returns will change, there's a question as to whether Intrastat will be required, and there may be employment legislation reversals.
I could go on.
Whether we leave or stay, I do not believe the net effect on UK PLC will be dramatic, as there are pros and cons either way. What is certain is uncertainty!
Business leaders are bulk signing letters announcing their allegiance, but, are they speaking their free mind or are they looking at the implications to their own empires?
One inevitability is our position in the world order will change - the USA have said that our relationship will change and we will have no influence or input into the continent in which we are placed.
One thing that we must remember is that the EU has seen the longest period of peace in a long time. I am sure that everyone sitting around a table and arguing about how bendy a banana has to be has helped, rather than sitting in a bunker, directing bombers.
What do you think of the upcoming referendum - should we stay in or exit the EU? Comment below to let us know your thoughts (make sure you login first!)
