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Industry experts warn Government of Brexit no-deal implications

After Theresa May’s first Brexit deal was resoundingly rejected by a huge majority in Parliament, the possibility of leaving the European Union without any agreement in place went from being unthinkable to a situation the UK could easily find itself in on 29th March.

The Prime Minister has returned to the drawing board and will – at the time of writing – present her ‘plan B’ to MPs in Parliament on 29th January. No doubt to increase the chances of this revised deal being accepted, Mrs May has asked for the help of a number of political party leaders. However, she is yet to convince Jeremy Corbyn to participate in these discussions. He wants the Prime Minister to completely rule out a no-deal Brexit before he joins the talks – but all of this changes by the hour of course.

Mr Corbyn’s unwillingness to even talk about accepting a no-deal could possibly win him the support of influential voices in the business and contracting world. Like the Labour leader, these representatives of the enterprise and staffing communities have made it clear that no-deal is an unacceptable conclusion to Brexit.

“Come together”

Chairman of The FSB, Mike Cherry, has added his voice to a number of business leaders who have stressed the importance of a resolution. He urged politicians to “come together”, “urgently find a way forward from this alarming Brexit stalemate” and show the kind of “innovation, flexibility and can-do spirit” that entrepreneurs and business owners possess to overcome challenges.

“Political paralysis”

Similar thoughts were expressed by the recruitment industry, a sector that contractors rely on heavily for sourcing projects. REC’s Chief Executive, Neil Carberry, said “political paralysis is already impacting firms”, adding that recruiters need a “deal with a clear transition period and a sensible approach to EU immigration, which will help to calm economic fears.”

“No man’s land”

Politically speaking, the UK is in “no man’s land”, says CEO of Qdos, Seb Maley. For contractors, the potential immediate removal of the transition period poses an urgent threat to contractors working on projects overseas, the IR35 expert explained; “Clearly, this would jeopardise the position of the thousands of freelancers and contractors working in the EU and paying tax here in the UK.”

He also addressed the growing concerns that global companies could up sticks and leave these shores given a no-deal will certainly mean the UK loses access to the Single Market. Should this happen, he said it “could impact the number of opportunities for these workers in the UK.”

“Prioritise the self-employed”

Similar concerns have been expressed by IPSE’s economic policy advisor, Ryan Barnett, who stressed; “For the sake of freelancers and the wider country, the Government must avoid a no-deal Brexit and also prioritise the self-employed in any renewed negotiations with the EU.”

“See sense”

Regardless of whether the UK manages to negotiate a deal with the EU, the Brexit burden means the Government must reconsider its intention to introduce IR35 reform in the private sector next year, asserts  Dave Chaplin, CEO of Contractor Calculator; “Implementing the reforms is burdensome for firms, which is why they are planning on exempting small businesses. But in our experience, it’s even more so for large firms that have hundreds if not thousands of contingent workers – all of whom need to be assessed on a case-by-case basis.”

He went on to say that if Brexit is delayed – which at this moment in time is still very much a possibility – the Government must “see sense and not implement the changes in April 2020 as previously announced.”

Day by day, the prospect of a no-deal – an end result to Brexit which seemed unimaginable at the time of the referendum in 2016 – becomes something the UK must quickly come to terms with as a reality. The implications of this are widely thought to be dire and pose a risk to contracting and the wider economy.

The world watches on, shaking its head in disbelief as the saga continues…

By Contractor Weekly

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5 thoughts on “Industry experts warn Government of Brexit no-deal implications”

  1. Rob

    Once again an article professes how bad ‘no-deal’ would be without actually providing any evidence for this. As a contractor I would be happy with no-deal. The biggest threat to me comes from the treasury’s continuing desire to crush contractors. It does not come from big business not being able to exploit migrant workers.

  2. Kent Willumsen

    Again the media makes Brexit out to be a threat to small business: “Look over there – not here”.
    Biggest threat to small business is the UK itself with all the red tape being introduced on a regular basis from IR35 to MTD…

  3. Tony E

    As soon as you rule out ‘no deal’ all useful negotiations with the EU will end. You guarantee the UK will be taken to the cleaners by the EU. We are only in this mess because the EU dont believe the gov could get it passed the commons as so many of them are spineless remoaners. Only an idiot would consider ruling out no deal…

  4. The Q

    On the basis that there are 3m EU nationals here vs 1m
    UK citizen over there, the terms I would offer are :

    O1. Zero tariff on EU imports

    O2. rights guaranteed for at least 1m of the 3m

    O3. an “agreement in principle” to pay the 39bn the EU needs from the UK

    The EU must then answer :

    A1. what tariffs will they seek to impose on the UK

    A2. what rights will the 1m UK citizens have

    A3. what do the EU intend to do about the Ireland border

    O1 protects the EU economy and trade across the Ireland
    border. If for A3 the EU claim they are in danger of being
    flooded with “sub-standard” goods from the UK after the
    exit, then :

    R1. O3 is immediately off the table and 2m in O2
    need to consider their futures in the UK.

    The EU must impose tariffs of some form (a consequence
    of their single market) . If in the face of O1 they try to
    impose tariffs closer to WTO rules than zero, then they are
    being prats so again : R1.

    If we end up on WTO terms and the EU has showed no
    grounds for compromise whatsoever, I am looking forward
    to the UK govt subsiding UK importers of “raw materials”
    from the EU from that 39bn we immediately save.

  5. Peter Basford

    If we leave the EU without a trade deal the EU is REQUIRED under WTO rules to apply the same tariffs to us as it does to the other states with whom it has no trade agreement. These tariffs are easy to look up – 10% on cars for instance if my memory is correct.
    The EU has spent 2 years trying to negotiate a post Brexit trade agreement with what purported to be the UK government only to find that it has wasted its time. Whose fault is this?
    The EU has trade deals with about 60 countries. We could have picked any of them as a suitable start point. We laid down ‘red lines’ which were compatible only with a Canada type agreement.
    The EU offered collection of UK- EU tariffs at the border of Northern Ireland to keep the EU border with Northern Ireland open irrespective of any deal or no deal, to respect our already legally binding commitments, no back stop.
    Apparently the question ‘who is being unreasonable?’ is too difficult for some people to answer even if they know that one side wanted its cake and eat it and explicitly said so (over and over again for 2 years).
    We are the second largest economy in the EU but only the 8th largest contributor to the budget. We get half of all inward investment into the EU as a whole. Passporting rights probably give us about half of the city’s huge business which pays 72bn in taxes to the UK (membership costs us £6bn or £1.80 per person per week – see National Audit Office report e.g. for 2014 for example).
    The referendum in 2016 involved criminality, lies and false promises. Only 37% of the electorate voted leave for reasons including ‘the council stopped collecting bins on Fridays’. Apparently some of the leave supporters are racists even though leave means an increase in Muslim and non-white immigration (2017 immigration = only 73,000 EU and 240,000 non EU immigrants). EU immigrants pay tax and non EU citizens cost the state money on average but many people thought they were voting to reduce the burden on the welfare state.
    No Brexiter seems to know what we pay to the EU, how an EU policy is decided, what the ECJ does, how we can sovereignly leave the EU and yet not be sovereign etc. but they all have lots of emotion about all these things they don’t know.

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