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Brexit: Deal or No Deal

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On 29 March 2019 the United Kingdom will leave the European Union – fulfilling the democratic decision taken by the British public.

Recent government forecasts have warned that Brexit will make the UK worse off than staying in the EU. A no deal could shrink the UK economy by an estimated 9.3%

The government now faces a difficult vote in the house of commons on the 11th December.

Should parliament accept or reject the deal? Should there be a general election or even a new people’s referendum?

Our panel’s thoughts can be found below, but if you would like to contribute to this feature, or any of our future features, please contact [email protected]

NatWest

Adrian Aurelius | Chair of the NatWest Cymru Board

Key to any business is stability and the ability to plan and prepare and this is the biggest difficulty businesses in Wales are facing right now because of Brexit. We are trying to provide stability amidst this uncertainty through the announcement of a £3bn fund to support businesses throughout Wales and the rest of the UK during the transition process.

Our relationship managers too are working directly with customers we believe may be impacted by Brexit to offer advice and support; whether that’s traditional funding for working capital, increased stock, or Foreign Exchange impact.

As well as the challenges businesses may face we’re also here to help our customers see upside opportunities too and to take advantage of them. Our priority is to ensure they are able to succeed in 2019 and we remain positive they will do so.

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Barclays

Karen Thomas | Head of Corporate Banking 

Barclays will continue to work with the Government and Parliament to ensure that we collectively achieve a new relationship with Europe which amplifies the ability of the UK to compete on the global stage, and to maintain as much access as possible between the UK and EU financial markets on behalf of our customers and clients.

A no-deal Brexit would be enormously disruptive to our customers and clients as well as the broader financial markets. We will continue to work positively and constructively with all our relevant stakeholders on the new relationship between the UK and the EU.

There are a number of problematic risks in the event of a ‘no deal’. First and foremost, any uncertainty over the rights of citizens would be very damaging for thousands of our customers and colleagues alike. We would hope, in the event of ‘no deal’, that both sides could agree a pragmatic and humane way forward on this issue as an absolute priority.

Current uncertainty is unhelpful for us and our clients and we would welcome further progress.

Our contingency plans are already underway. This is a necessary reflection of the fact we need to prepare for every eventuality. We cannot rely on the existence of a transition period without ratification of the Withdrawal Agreement and legal certainty that it will happen.

Barclays has been Backing the UK for 327 years. The breadth of our business means we are able to play a significant role across society and the economy. Every day we help over 24 million customers and clients to reach their potential. No matter what challenges lie ahead, Barclays continues to stand ready to help.

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Recruit 121

Che Hooking | CEO

The huff and the bluff from the left and the right, spurious repercussions proclaimed with fury and might

The results came in and the decision was out, no one expected this to happen, what to do now we all shout

We are lions lead by lions, the oldest democracy in town, no one will make good old Blighty the clown

Ahh this is tough, far tougher than expected, if we want all the benefits, then we have to stay connected

Our politicians wage war, fighting foe after foe whilst reminding us all, this was YOUR choice you know

Stick, Twist or Bust, your only choice, right? But I think on reflection, we must be contrite

Why take any, or try an addendum, now we know the options lets hold a [second] referendum

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Lime R&D

Matthew Jones | Managing Director

We are all acutely aware that uncertainty is detrimental to business; how can we make plans and investment decisions? Businesses need clarity.  Coming from an R&D tax credit perspective, what does this mean for our clients?  Well not a lot. If there is no deal, the Government have stated they will match EU state aid rules (for the time being).  So essentially the relief won’t change.  However, going forward, if we can get free of EU state aid restrictions and R&D capping rules, we could make the UK an extremely attractive place for tech and innovative companies to locate, with obvious positive implications for the economy.

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www.ourhomeonline.wales by Nominet 

Neil Dagger | Head of Marketing, Planning, Insight and Analysis 

There is certainly a perspective that regardless of what happens in the political corridors of Westminster and Brussels, that great entrepreneurs in Wales will still start up brilliant business ideas targeting Welsh markets and beyond, ambitious students will create CV or blogging sites to build an early following; and businesses of all sizes will still need websites, whether we are in or out. National identity and location will always be important consumer considerations from a geographic, legal and currency perspective. If you operate a business from within Wales, what better than to fly the flag on a .cymru or .wales domain name.

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M4 Media & Training

Laurence Winmill | Chief Executive Officer

This is one of the biggest political and constitutional decisions this country has ever had to deal with. I certainly don’t know the answer, but our whole democracy would be questioned if you ignored the referendum result with further division guaranteed. We elect MP’s in parliament to carry out the people’s wishes and they need to step up take responsibility and make the decision in the national interest. If they fail the people at this crucial time it will undermine the credibility of parliament for generations to come.

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Business Doctors

Graham L Morgan | Managing Director

I firmly believe most Businesses across Wales and other parts of the UK just want to have a decision one way or another and move on. Whilst there are indications big Corporates have held back on investment until the future is clearer for the average Family Business Owner they have had to plough on.

At the end of any year planning for the next is important and very much a time to reflect. Producer Price Inflation to the end of September 2018 was at 10.5% in the Office of National Statistics figures. Whichever business you are in this gives a benchmark for the type of price rises you need to consider to bring in early in 2019. Every business in my opinion need to look at:

  1. Staff – have you been relying on European workers?
  2. Supply Chain – could they be impacted and cause you problems.
  3. Key Customers – who are they? Are you speaking to them about any possible impact?
  4. Import/Export – if you are involved in either have an independent review of what could happen. Its never easy to see the broader picture when you are in it!
  5. Consider some contingencies.
  6. Be ready for new opportunities.

Now is the time to spend some quality time reflecting on where your business actually is right now and what scenarios could play out in 2019. Having an independent emotionally detached expert to facilitate a debate is absolutely the best approach.

We need our Politicians to start doing what we elected them to do – make decisions!!

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Alistair WardellGrant Thornton

Alistair Wardell | Lead Partner

With just 15 weeks to go before Brexit day, we still have no agreement on what Brexit will be.  The vote next week may not provide any further clarity for businesses.

Business should not wait for the politicians to reach an agreement. It could be February or even March before this political deadlock breaks.  By then it will be too late to make contingency plans for 29 March.

At Grant Thornton we’ve been helping organisations make business continuity plans for a No Deal Brexit (as the most immediate and most disruptive scenario); look for opportunities that this may create; and get match fit, focusing on business basics like cash-flow, retaining and attracting talent, sweating your assets to meet customer need, and removing unnecessary costs.

“As we face greater political volatility than any time in the last forty years, businesses should keep calm, carry on and be ready for change.

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Quantum Advisory

Matthew Tucker | Investment Analyst

Whilst the cabinet has approved the draft deal, the Parliamentary arithmetic doesn’t look good for the Prime Minister. The Labour Party will likely vote against the deal, as will the Liberal Democrats and the nationalist parties.

More worrying for the Prime Minster, however, will be the loss of votes on the government benches. Arlene Foster, the DUP party leader, has explicitly rejected the deal, stating that anything which creates a border in the Irish Sea would breach her party’s red line of no regulatory divergence with Great Britain.

Should the Prime Minster fail to gain the support of her Eurosceptic backbenchers, the deal is unlikely to pass through Parliament.

If that happens, there are several possible scenarios; the removal of Theresa May as Prime Minister, the UK crashing out of the EU with no deal, re-opening negotiations with the EU (although they will likely reject this); a general election, and possibly a second referendum.

What happens next is anyone’s guess. However, the likely rejection of the withdrawal agreement would see the country face a constitutional crisis unseen for decades.

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FOR Cardiff

Adrian Field | Executive Director

Part of the problem is that the referendum in 2016 only asked one question when, and I appreciate rather unpractically, it needed to be more of a survey to ask to what degree people wanted to leave. Looking ahead we cannot undertake another referendum – to do so would undermine the intelligence of the electorate and when would calls for further referendums ever end? A general election, if held, would not happen until at least January and any alternative Leader, no matter if they are Labour or Conservative will be able to make a huge difference before the end of March, particularly as there isn’t much between them on the issue policy wise anyway. There is sufficient evidence to suggest that  a ‘no deal Brexit’  would cost the Welsh economy more than the current agreement on the table, so I would accept the deal on offer, no matter how badly handled this has all been.

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Brewin Dolphin Wales

David Myrddin-Evans | Head of Office

Headlines remain dominated by the state of Brexit negotiations, and rumours swirl with ever worse scenarios as to the effects of good, bad or indifferent outcomes.

Against this background, it remains important to remain true to our core investment philosophy and look through the short-term noise. Our portfolios are globally diversified and, even within the UK equity element, overseas earnings are an extremely important constituent.

Whatever the outcome, while portfolios will not be immune to market movements, in a worst case scenario, they will benefit from any depreciation of the pound and the relative performance of our overseas exposure.

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Acorn Recruitment

Dan Langform | Marketing and Communications Director

Ever since the referendum, employers across every sector, and every region of Wales and the UK have found it increasingly difficult to find staff – including staff across every skill level from unskilled to highly-skilled. The onset of Brexit has only exasperated this for many, and has also impacted on the propensity of workers from outside the EU to consider coming to the UK for work.

Make no bones about it, any post-Brexit policy that determines which workers will be permitted to the UK that is based on salary or perceived skill levels is grossly inappropriate. This approach will have a serious impact on growth and productivity for individual businesses and the economy as a whole. Instead the authorities need to concentrate on ‘key workers’ required, and not segment people by arbitrary skill-levels or salary levels. And we must do what we can to ensure people across the world feel that they will be welcomed and valued here in the UK.

My personal view is that we should halt Brexit – it has taken some 40 years within the EU to get to where we are, and there are simply too many unknowns to think it’s a good idea to just drop the partnerships, agreements and influence we have, and walk away overnight.

A second referendum won’t appease those who don’t win of course – but this is not like a general election when we have an opportunity in 4 or 5 years’ time to vote again; this is once-in-a-generation opportunity to protect the best interests of the UK, including the sustainability of businesses and the security of jobs over the long-term. And now that there are far more facts and insight at hand regarding the complexities of leaving the EU, a second referendum is the only way to reflect a more informed view of the electorate, however that might turn out.

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Design & Supply

Chris Weed | Managing Director

As a company we have concerns in relation to raw material prices from our supply chain as a result of Brexit. We manufacture architectural glazing systems and we are committed to providing our customers with quality cost effective solutions and to continue to be competitive, we would potentially have to absorb any increase in raw material costs.

In line with our diversity policy we directly employ European staff who have shared genuine concerns about the uncertainty and where they stand following Brexit in relation to freedom of travel and job security.

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