Deloitte's reaction to Brexit statement by British Prime Minister, Theresa May, MP
The British Prime Minister has now given a clearer indication of the UK Government’s plan for leaving the European Union, a process which will formally commence on triggering Article 50, which is still expected to take place before the end of March 2017.
The British Prime Minister has made clear in her speech of January 17th, 2017, that the UK will not have partial or associate membership of the EU, or anything that leaves the UK “half-in, half out”, nor will the UK adopt a model already enjoyed by other countries. We now have confirmation that this will mean a full exit from the single market, with a new trade deal to be negotiated between the UK and the EU. On the issue of a Common Travel Area between the UK and Ireland, the British Prime Minister has made it clear that she wishes this to remain post Brexit. On the issue of being a member of a Customs Union with the other EU member states, the UK are open to negotiating a new agreement, being an associate member or being a signatory to some elements of the existing Customs Union.
Whilst the intricacies of EU regulation mean that the impact of Brexit will vary widely from sector to sector and business to business and could take many years to be realised in full, four main issues will have implications across the majority of the business landscape in Ireland and our future relationship with the UK – Movement of people, Restrictions to Market Access, Foreign exchange rates and Customs duties and tariffs.
In our recent survey of Irish CFOs, a rise in non-tariff barriers to trade, specifically ‘increased complexity and costs due to the introduction of different regulatory requirements’ are a concern for two-thirds of Irish CFOs. As a whole, ‘reduced workforce mobility’ and a ‘rise in tariffs’ rank as the next biggest concerns.
As we move closer to Brexit, the time for action is now. At Deloitte, we have a dedicated Brexit team led by David Carson, Partner, and we continue to work with our clients across all industry sectors to plan for the future and to identify new opportunities. In the short term, businesses should consider how to appropriately manage and respond to the immediate uncertainty surrounding the indirect impacts of Brexit and plan for the medium to long term in a post Brexit landscape.
David Carson, Partner and Chair of Deloitte’s Brexit Committee stated:
“We now have a clearer indication of the UK’s goals from the forthcoming negotiations. The Prime Minister wishes to have control over immigration and leave the single market, yet wants to retain many of the benefits the UK currently has in relation to free trade and customs. This would prefer the UK to non-EU countries. It would be good for Ireland if this could be achieved but we await the reaction of the EU negotiating team to assess the feasibility of this aspiration.”