BREXIT News update 14th August 2017

by David Baber, Managing Director.

From now on until Britain has left the EU, CPA are going to post regular blogs for the comments we have seen in the press and elsewhere about Brexit, which is perhaps the most momentous event that will happen to the UK for a very long time and will have long-term implications for every citizen living in this country for good or ill. We aim to be balanced in our reports which will be divided into three categories;

• Category 1 – Positive comments on Brexit
• Category 2 – Negative comments on Brexit
• Category 3 – Neutral comments on Brexit

Or see all posts referencing Brexit

Please find below our latest Brexit blog which has been compiled today on 14th August 2017:-

BREXIT; NEGATIVE COMMENT: In an article by Sam Coates, Deputy Political Editor in The Times of 1^st August, under the heading “Cabinet warfare blocking Brexit progress, Theresa May told” it was reported that Theresa May has been warned that cabinet decision-making over Brexit is too slow after No 10 said that no agreement had been struck on limiting migration in future.

Also that Downing Street tried to pacify warring cabinet ministers yesterday with a fudge in which it insisted that the principle of EU free movement would end after Brexit but refused to commit itself to a specific replacement.

The peace move followed days of conflicting statements. On Friday Philip Hammond, the chancellor, said that EU citizens could still come to Britain after Brexit while on Sunday Liam Fox, the international trade secretary, suggested that no decisions had been made. Boris Johnson, the foreign secretary, was also unhappy about Mr Hammond’s intervention.

Downing Street sought to end the row by saying the government’s position remained that free movement would end in March 2019, but did not rule out a policy similar to it under a post-Brexit transition deal. The only agreed policy for that date is to start registering EU citizens when they arrive.

It went onto say that even Remain supporters conceded that Mr Hammond was not always the best messenger. “He’s never going to fill you with optimism,” a minister said.

BREXIT; POSITIVE COMMENT: In The Morning Account, 4^th August, under the heading “Strong support for Brexit amongst SMEs” It was reported that small UK businesses are bullish about international trade, and have been taking advantage of the weak pound to increase overseas sales since the EU referendum, a survey by OFX has revealed. Of the 500 owners and senior managers surveyed, 67% said they feel confident about doing business overseas. Since the EU referendum, almost half (48%) have increased international sales, while 36% expect to start or increase exports in the next twelve months. Since the EU referendum, 28% of the SMEs surveyed have seen sales decrease to UK customers, while 44% say rising inflation is the biggest current concern for their business. Insider. Small Business

BREXIT; NEGATIVE COMMENT: In The Morning Account, 7^th August, under the heading “Importers expect costs to rise” a survey by Funding Circle has revealed that more than two thirds of small businesses that import goods and services expect their costs to rise after Brexit. It found that found that importers expected their average costs to increase by £5,300 a month, or nearly £64,000 a year. Overall, 69% expected higher import costs. The Times, Page: 37.

BREXIT; POSITIVE COMMENT: In The Morning Account, 8^th August, under the heading “Brexit provides the perfect prompt to simplify Britain’s tax code” Jo Gilbey, a tax partner at BDO LLP, argues that Brexit provides the perfect opportunity to reform the “verbose, complicated” UK tax code. “Simplicity in doing business will give the UK a competitive advantage that does not breach EU rules,” she asserts. Aligning National Insurance and Income Tax, with an ambition to merge them into one payroll tax, Ms Gilbey says, would remove economic distortions, reduce burdens on business, improve fairness and transparency and help individuals keep track of their tax contributions. The government should resist “tinkering around the edges,” she adds, which increases complexity, and suggests a moratorium on all new business tax policies that do not simplify the system until 2020, or until the Brexit negotiations are finished. “Policymakers must use Brexit as an opportunity for bold thinking. We don’t need to dole out more subsidies or turn Britain into a tax haven. We just need to create a tax system fit for the twenty-first century,” Ms Gilbey concludes. City AM

BREXIT; NEGATIVE COMMENT: In The Morning Account, 11^th August, under the heading “Slowdown to hit financial services sector” reported that new research suggests that the financial services sector is set for a sharp slowdown as Brexit uncertainty and economic conditions slow lending. The stock of mortgage lending is expected to ease back to £1,184bn next year, down from £1,192bn in 2017, according to EY Item Club. Mortgage demand will be impacted by the inflationary squeeze on household finances while business lending is expected to fall from £425bn this year to £424bn in 2018, before returning to growth in 2019 at £427bn and stepping up again to £435bn by the end of the decade. Omar Ali, UK financial services partner at EY, said: “Despite warnings from the Bank of England and some high-street lenders, the only type of lending that is expected to grow in 2018 is consumer credit.” The Times, Page: 40   Independent i, Page: 46   The Scotsman, Page: 32

BREXIT; NEGATIVE COMMENT: In The Morning Account, 14^th August, under the heading “Business confidence falls amid political uncertainty” It was reported that business confidence has dropped as political uncertainty takes a toll, according to the ICAEW. Its index of optimism, where anything above zero suggests firms are positive, fell from 6.7 in the second quarter to -8. Matthew Rideout, director of business at the ICAEW, said the fall back into negative territory was “not unexpected”. He said: “The industrial strategy has been lost in the void, coupled with no clear signal towards post-Brexit policy,” he said. “As a result, businesses cannot see through this haze of uncertainty and are struggling to look further than the end of the next quarter in terms of their decision making.” The Times, Page: 41. Daily Mail, Page: 69    The Daily Telegraph, Business, Page: 29