It is almost two years since the UK’s ‘in-out’ referendum resulted in a majority voting in favour of what has become known universally as Brexit. And with less than a year to go before the UK’s departure, it is still not at all clear how our trading relationship with the EU27 will develop.
However the debate is framed, the real divide is no longer between ‘leavers’ and ‘remainers’. It is now between those who, whichever way they voted, take an positive view of Britain’s prospects outside the European Union and those that forecast doom and gloom for our future prosperity and status.
More clarity would obviously be welcome but if one were to believe some of the more pessimistic coverage, UK and international businesses making investment decisions are all just sitting on their hands waiting to find out how the land will lie on 29 March next year.
Well I’ve always been taught not to believe everything I read in the papers and, from what I can see, it is simply not true to suggest that ‘UK plc’ is at a standstill. Far from it in fact. Read on.
Take just one industry as an illustration – civil aviation. Access to European markets and ownership requirements make this a particularly complex industry. Aviation, is after all by its very nature, global. And recent developments have demonstrated that instead of inaction, many airlines are getting on with the task at hand.
In early May, successful Hungarian airline Wizz Air confirmed that it had been granted a UK air operator’s certificate (AOC) and operating licence. This will have the effect of safeguarding its flights to and from the UK regardless of how the current Brexit negotiation concludes.
Wizz Air said it had no preference for the UK leaving or remaining – it just seeks clarity on the future of regulation such as the European open skies agreement. And in the meantime it has committed to the UK by investing over $850 million. Its new UK operation will be based out of Luton airport and consist of eight aircraft, which will feature a Union Jack. And it plans to employ 300 people by the year-end.
Rivals Ryanair and EasyJet are following a similar strategy. Ireland-based Ryanair’s reason for seeking a UK AOC is to maintain the ‘freedoms of the air’ that it currently enjoys to and from the UK, which is the airline’s second biggest country market with over 25 million seats in 2017.
The reverse situation applied to easyJet – a UK airline requiring an EU-based AOC. The UK carrier obtained an Austrian AOC earlier in 2017 for its Vienna-headquartered operation. Keen-eyed travellers may notice an Austrian registration mark already appearing on the fuselage of some aircraft operated by the new subsidiary. Otherwise no significant difference will be obvious to the travelling public. The fact is that all these airlines have taken proactive steps despite continued uncertainty as to Brexit’s direction of travel – pun intended.
Countless other examples exist where businesses located on both sides of the Brexit ‘divide’ have been taking action to avert the potential disruption should negotiations for the UK’s orderly exit from the EU collapse.
A comprehensive free trade agreement between the UK and Europe is clearly desirable. Despite the short-term uncertainties, the UK has enduring strengths that mean it can prosper as a trading nation – our language, legal system, stable democracy and absence of corruption remain huge competitive advantages for inward investment.
The UK is also a remarkable source of innovation: from biotech to the creative arts. And the UK is a world leader in high value services – such as engineering, consultancy, legal and financial – that drive domestic economies and trade.
With our global network, Sovereign is well placed to provide corporate services both to UK firms seeking to expand into the EU and, of course, foreign companies looking at market entry into the UK.
The services we provide may begin with the incorporation and management of companies but they do not stop there. Depending on clients’ requirements, Sovereign can also offer accounting, insurance, payroll and pensions services, as well as relocation assistance. Get in touch to find out how Sovereign might help your business – or that of your client. The outcome of Brexit may be uncertain but there is no need to sit back and wait.