Business leaders have issued the starkest Brexit warning yet, saying politicians are “in danger of sleepwalking into the most damaging economic act in living memory”.
Concerns are mounting in the wake of a “disappointing” final quarter for the Bristol region in 2018, as companies say they face increasing uncertainty and are unable to prepare for when Britain leaves the EU
The chief executive of Airbus has this week called the current situation a “disgrace” and reiterated warnings that the aerospace giant could pull out of Britain in the event of a ‘no deal’ Brexit, with potentially devastating consequences for the 6,000 people employed at the firm’s Filton operation.
Speaking to the BBC, the Tom Enders said: “Please don’t listen to the Brexiteers’ madness which asserts that, because we have huge plants here, we will not move and we will always be here. They are wrong.”
Read more: ‘No deal Brexit scenario directly threatens Airbus’ future in the UK’
This follows the shock announcement that prominent leave backer James Dyson will be moving his company’s head office from Wiltshire to Singapore. The electronics and appliance firm, which has a software hub in Bristol, claims the move has nothing to do with Brexit.
Responding to the Airbus warning, Phil Smith, managing director of Business West, said: “Our politicians are in real danger of sleepwalking into the most damaging economic act upon our region’s economy in living memory.
“We call upon them, and the UK government, to act now to secure the region’s economic future and take steps now to remove the threat of a ‘no deal’ Brexit.”
Describing the aerospace sector as one of the jewels in the crown in the city and a critical part of the region’s wider economic health, he said the Airbus warning should “worry all of us – and be a wake-up call for politicians from the region”.
“When a chief executive says that their sector “stands at a precipice” and that Brexit “is threatening to destroy a century of development based on education, research and human capital”, we should take notice,” argued Smith.
“We should also be aware that this language represents not just the level of threat facing the industry, but also the level of frustration many businesses now feel with the state of Brexit plans and the current paralysis in Parliament.
“This is not just an issue for Airbus, but poses a significant risk for smaller and medium sized companies within Airbus’s supply chain and our wider aerospace sector.”
Business West’s local business survey – the South West’s largest for the private sector – reported on a “disappointing” end to 2018, with a drop in GDP figures attributed to Brexit uncertainty and turbulent times on the high street.
Adding to the raft of concerns prompted by the current turbulent climate, new research from the University of Bristol has highlighted the impact on the UK economy, with a reported 16 per cent drop in value for British companies – and worse predicted.
Using stock market data for 297 firms and bookmakers’ Brexit odds during the referendum campaign, researchers were able to estimate the financial impact of leaving the EU in this first study of its kind.
The findings, published in the Journal of Banking and Finance, reveal that firms with a UK-focus are most affected, while multinational companies are more resilient due to their diverse geographical spread, which provides greater stability.
In the immediate aftermath of the referendum, prices of companies in the bottom quarter of the internationalisation ranking dropped by an average of 21 per cent, while those in the top quarter dropped by eight per cent.
Of the companies analysed, those in financial and consumer-oriented sectors – such as housebuilders, retail, travel and leisure firms – are hardest hit.
Dr Piotr Korczak, reader in finance in the university’s School of Economics, Finance and Management, led the research.
Commenting on the findings, he said: “The referendum result started a period of unprecedented political uncertainly: it is difficult for companies to plan, investment is put on hold, and consumers cut spending.
“Ultimately, the economy slows down while everyone waits to see what will happen.
“We would expect to see the same trends if there’s a no-deal Brexit. This prolonged uncertainty is likely to see the value of UK companies decrease even further.”
Vas Carp, CEO of LV Construction, based in Castlemead, remains optimistic about his company’s future here, despite concerns.
“With the Brexit deal being so uncertain, there is still much talk about how the UK’s construction industry will be impacted,” said Carp, who moved here from Romania in 2002.
“One of the most commonly cited concerns about Brexit is the reduction in workforce eligible to work in the UK and the associated increase in labour costs.
“I have always taken a long-term view – all my employees have been in the UK for more than two years. Brexit uncertainty is worrying, but I feel all you can do as a company owner is keep an eye on the news and future-proof your business as much as possible.
“There are other concerns, such as with supply of construction materials, potential procurement issues and closing of EU funding streams.
“It is right to be aware of these potential issues but, as with most situations, where one door closes another will open.
“There could and probably will be lots of opportunities for new suppliers and funding streams to become available. It is not all doom and gloom.
“I am committed to building and construction in the UK and improving communities by the way my company works, how we employ and train staff, and by working on projects we consider to be good for both the regional and UK economy.
“I love being in the UK and I love Bristol as a city for raising my family in.”