June 23rd 2016 marked the result of a historic referendum, in which Britain voted to leave the European Union. The UK is considered one of the best countries to start a business, but could that change? Following the Brexit vote, we saw the pound fall to its lowest since 1985.
Leave won by 51.9% to 48.1%. The referendum turnout was 71.8%, with more than 30 million people voting.
Implications of Brexit for business
With half of all UK exports going to the EU, businesses that trade heavily within the EU are bound to be concerned about what impacts a UK withdrawal from the European Union may have. Businesses that only trade outside the EU may feel safe, however, it’s felt by many experts that Brexit will have implications even for those businesses that don’t deal directly with the EU.
Business that don’t trade directly with EU countries are still likely to be impacted by Brexit because there is a high chance that they have suppliers or partners who do, therefore any effects on them will have a knock-on effect – the domino effect. Industries most likely to feel this domino effect include the automotive, chemical and financial services industries. A good example of this is a car dealership selling in the UK: cars on sale are likely to contain parts that were produced in the EU and the cars themselves could have been manufactured in the EU.
For a car dealership therefore, this means that cars and the parts are likely to be more expensive to import to the UK or they may not be available at all. The domino effect means that if car exports becomes more expensive then this will, in turn, impact the whole supply chain.
In 2015, we paid the EU an estimated £13 billion, or £250 million a week. Many hope this money may be ploughed back into the UK economy.
Implications of Brexit for healthcare businesses
The decision of United Kingdom voters to exit the European Union will likely mean changes for the NHS, pharmaceutical companies and the drug approval process, medical device makers, researchers, and others. It is important to remember that the exit from the EU will not happen for at least 2 years and may potentially take much longer. In the meantime, the UK remains a member of the EU and all the EU obligations and benefits remain in place. In the short term therefore, it is business as usual in the UK up to at least March 2019.
After Brexit, the model that the UK adopts for its relationship with the EU will determine the impact upon the the healthcare sector. If the UK remains in the European Economic Area, then the changes may be minimal. If the UK joins the European Free Trade Association and negotiates sector specific access to the single market, then the landscape depends on the exact nature of that relationship. If the UK distances itself further from the EU, then the changes may be more extensive. Find out more in this detailed piece by Norton Rose Fulbright.
Here at e-clinic, we will be watching closely to see what Brexit brings.