Tuesday 26 June 2018

London’s most representative business organisation has warned that the absence of detail from ministers on key Brexit requirements for business will see the UK miss out on new economic opportunities.

Publishing a new report Two years on from the Referendum: What London businesses need from Brexit, London Chamber of Commerce and Industry (LCCI) has warned that Government is failing businesses in several areas – from immigration policy, future terms of trade and new customs arrangements.

In particular, LCCI believes the proposed transition period to December 2020 is too short to enable many businesses to make preparations.

For the new report LCCI brought together several rounds of polling by ComRes aand analysis commissioned from the Centre of Economics and Business Research as well as interviews with businesses.

The research found that:

• Two in five (40%) London businesses (excluding sole traders) reported they employ workers from the EU¹
• One in three (34%) London businesses (excluding sole traders) said they would be affected by increased restrictions on hiring non-UK EU staff²;
• One in three London businesses (33%) reported they would be directly affected by the introduction of new UK-EU customs procedures or tariffs²;
• Among London exporters, difficulties finding overseas customers, agents and/or distributors (38%) was found to be the main barrier to increasing their exports³;
• Two thirds (67%) of London businesses believe changes from the current trading arrangement with the EU should happen gradually, over the course of a few years once one the EU-UK FTA is agreed on⁴.

Chief Executive of LCCI Colin Stanbridge said: “As soon as the Referendum result was announced LCCI said that everything possible could be done to turn this into an opportunity. But two years on we still find ourselves mired in inaction and uncertainty.

Matters that are absolutely critical to businesses have not been answered. What are the envisaged terms of trade that London businesses will have to operate under?

What processes will exporters and importers have to navigate at Ports of Entry between the UK and the EU? What procedures will employers have to make preparation for to secure specific non-UK labour in a new immigration system?

Alongside the limitation of detail on such fundamentals, business has been told that the Brexit transition period will end on 31st December 2020 – and will actually only be around 90 weeks.

Is that really enough time for all businesses to prepare for a – as yet undefined – new trading environment? Is it realistic to expect all businesses to secure whatever new software, plant and machinery, people and finance they may need?

Finally is a 90-week transition period enough time for new UK border and customs infrastructure to be trialled and installed at our seaports and airports? We have doubts that it is enough time”.

The report makes a number of recommendations including:

• The proposed 90-week transition period is not enough for London business. A three to five-year transition, under the current UK-EU arrangements, would be a reasonable period to support business needs
• LCCI urges the Mayor to look at drawing-up a template for a dedicated Shortage Occupation List for London (LSOL) – like Scotland already has – and to convene the capital’s civic and business leaders to design a proposal for a future work permit system for our capital
• In light of Brexit, the Government should consider stepping up efforts to support exports growth, including through subsidised trade missions and increased funding for the Department for International Trade (DIT)
• The Mayor of London should look to minimise insecurity for London businesses by liaising with LCCI and other business groups on creating a Brexit ‘Help Desk’ resource to offer advice and information to London businesses

ENDS

¹ London Business 1000 (April – June 2017).ComRes interviewed 1,018 business leaders by telephone between the 27th April and June 2nd 2017. Data were weighted to be representative of all London businesses by size, sector and borough. The figure referenced in the text is based on a sample size of 988.

² Capital 500 QES (Q4 2017). ComRes interviewed 577 (396 excluding sole traders) London business decision makers online between the 2nd November and 27th November 2017. All QES data have been weighted to be representative of all London businesses by company size and broad industry sector.

³ Capital 500 QES (Q1 2018). ComRes interviewed 561 London business decision makers (280 exporters) online between 15th February and 15th March 2018.

⁴ Capital 500 QES (Q2 2017). ComRes interviewed 530 London business decision makers online between the 23rd May and June 19th 2017.

Media contact
Katharine Barney
T: +44 (0)20 7203 1897
M: +44 (0)7827 241528
E: kbarney@londonchamber.co.uk

NOTES TO EDITOR:

1. London Chamber of Commerce and Industry (LCCI) is the capital’s most representative business organization with members ranging in size from multi-national companies to SMEs and sole traders.
2. Colin Stanbridge, Chief Executive is available for further comment and interview.
3. Full data tables are available at www.comresglobal.com.
4. A copy of the Brexit report, including excerpts of interviews with businesses can be viewed here.