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What does triggering Article 50 mean for UK businesses ?

What does triggering Article 50 mean for UK businesses ?

Comments by Christian Stadler, a Professor of Strategic Management at Warwick Business School

“With Article 50 officially triggering Brexit, we will start to see UK business prospects becoming clearer and how different industries will react.

“Some industries can expect job growth, the ones with a strong consumer market here for example. These firms may have worries over difficulties importing into the UK.

“For a good example of this, look no further than the PSA Group’s acquisition of Vauxhall from General Motors. One of the reasons for this deal is for them to have a stronger base in the UK – so realistically, these facilities are not in danger as some feared initially, if anything, the facilities will become more important for them. This could result in growth and could be good news for jobs, although not necessarily profits in the short term.

“In other important industries such as banking, access to Europe is vital for businesses running in the UK and, as a result, a few have already made intentions to move to Europe known. HSBC has confirmed it will move some staff to Paris. We have also seen Lloyd’s of London confirm a Brussels subsidiary by 2019.

“In an industry where you need passporting rights, we might see more of this as the likelihood is firms operating within the UK will not receive such privileges. It is very hard outside of the EU without access to the EEA, despite abiding by numerous rules, the Swiss don’t have this privilege for example

“Furthermore the likes of Dublin, Frankfurt and Paris will be looking forward to taking these jobs so these industries in the UK may be under threat going forward.

“Then there are industries we will probably see not affected as much, those around the digital economy for example.

“The UK’s industry is one of the biggest in this regard and a number of tech companies have already made announcements to say they will be making big expansions in the UK – Brexit or no Brexit, the digital economy of the UK is great in their eyes and it’s many advantages outweigh disadvantages.

“No doubt the sector will grow, but one thing that may play a role is free movement for people.

“We saw the outcry when Trump called a travel ban for example, so companies may be worried they might be unable to get specialised staff, there is not enough available in the UK right now, so they need them to come in from elsewhere, so if freedom of movement curtailed this could have an impact.”

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