News

UK Elects to Leave EU in Historic Vote

In a decision that is sending shockwaves across world markets, Britain has chosen to leave the EU in a historic vote, which will have lasting ramifications. As the country begins to process the surprising results, prudent employers would do well to understand what happened, what happens next, and how they can prepare.

What Happened?

The official results were announced Friday morning and, while it was a close race, in the end Britain backed Brexit. Despite bad weather and floods causing travel disruptions, voter turnout was high—72.2 per cent of eligible voters cast their ballot in Thursday’s referendum, which amounts to about 33.5 million votes.

Referendum results paint a picture of a strongly polarised country. The official results are Remain 48 per cent, Leave 52 per cent. Remain areas came in more strongly than expected, and the same is true for Leave, according to Guardian results. As expected, Scotland and London voted overwhelmingly for Remain. But, outside the capital, every English region had a majority for Leave.

Adding to the uncertainty Friday morning, David Cameron announced that he would resign as Prime Minister by October, stressing that he would do everything he could to ‘steady the ship’ over the next several months but that ‘fresh leadership’ was needed, according to the BBC.

Cameron’s announcement helped momentarily calm turbulent markets and halt a rapidly plunging pound. However, the change in leadership will not be a cure-all, and Bank of England (BoE) Governor Mark Carney cautioned that ‘inevitably, there will be a period of uncertainty and adjustment following this result’. Carney was careful to stress that UK banks are more resilient since the 2008 financial crisis, and that the BoE will implement contingency plans. Carney pledged to make £250 billion available to banks to help steady volatile post-Brexit markets. And, for good reason, since the FTSE 100 fell 8 per cent, losing £100 billion in the process, and the pound dipped to a 31-year low, according to Reuters. As banks grapple with chaotic markets and a weak, but recovering pound, uncertainty will be the norm for now.

What Happens Next? (more…)

How Can I Prepare My Business?

Preparing your business for a possible Brexit is vital. If you have not started, you are not alone—April research from the Chartered Institute of Internal Auditors found that only 21 per cent of FTSE 250 companies had made or were currently making contingency plans for Brexit.

It is never too late to begin planning for Brexit. To assess the impact on your business, do the following: (more…)

What Are The Pros And Cons For Businesses?

Each Brexit model is complex and carries with it much uncertainty. However, Brexit’s general pros and cons for businesses are more straightforward and less contingent on unknown circumstances:

Cons:

  • Out of the EU, the United Kingdom will have less control over EU legislation that it may still have to apply if it wants access to the Single Market.
  • Companies may have to pay new taxes and customs costs as well as deal with slower administration processes for conducting business with suppliers in continental Europe.
  • Companies may have difficulty hiring qualified employees from outside the United Kingdom to address the skills shortage, and employees who are non-British nationals may be required to obtain a visa or work permit in order to keep working in the United Kingdom.
  • Other countries may be hesitant to invest in the United Kingdom until it is clear that the UK economy can be successful while independent of the EU, which could weaken the pound.
  • Britain’s trade relationship with the EU could sour if Brexit negotiations go poorly. This situation could be further exacerbated if the United Kingdom is unable to secure beneficial trade deals with other countries.

(more…)

An EU Referendum Update For Businesses

As the government’s 23rd June referendum to decide whether the United Kingdom will remain in the EU looms closer, the outcome still remains uncertain.

Until recently, polling has generally favoured the United Kingdom remaining in the EU, but the margins are so tight that most experts agree it will be too close to call—with the still-undecided voters likely to determine the result. However, multiple sources have recently reported a slight swing towards the ‘Leave’ camp. A 3rd June YouGov poll found 45 per cent favour leaving, while 41 per cent favour staying. A 5th June Opinium poll found 43 per cent want to leave and 40 per cent want to stay. And a 6th June ICM poll found 48 to 43 per cent in favour of leaving.

A Brexit outcome would usher in a minimum two-year period during which the United Kingdom would slowly disentangle itself from the EU and negotiate a complex withdrawal agreement. Whatever the outcome on 23rd June, proactive UK employers would do well to understand what Brexit would look like, the general pros and cons, and how they can prepare their businesses for leaving the EU.

What Would Brexit Look Like? (more…)

New Apprenticeship Levy And Funding Changes Set for 2017

In order to increase the number and quality of apprenticeships in the United Kingdom, the government recently introduced a new apprenticeship levy and Digital Apprenticeship Service that will benefit all businesses interested in apprentices. However, only employers with a pay bill of more than £3 million each year will be required to pay the levy.

The levy will be set at 0.5 per cent of an employer’s pay bill, and employers will pay the levy to HM Revenue and Customs, through the Pay as You Earn process alongside tax and National Insurance Contributions. Employers will receive an annual allowance of £15,000 to offset the levy amount they must pay.  (more…)

New App Locks Your Phone While You Are Driving

Distraction Prevention is a new app that locks your mobile while you are driving. The app uses your mobile’s sat-nav system to detect when it is travelling faster than 4 mph and then disables all calls, texts, emails and social media. Romex, the developer of the app, anticipates that it will help reduce the number of motor vehicle accidents, which could then contribute to reduced motor insurance premiums.

While the function of Distraction Prevention is not a new concept for apps (as there are several other similar products), it does emphasise a growing campaign to keep mobiles out of the hands of motorists. The reason for this push is that studies have shown that motorists who use mobiles behind the wheel are slower to recognise and react to hazards. In fact, mobile phone usage was a contributing factor in 21 fatal road accidents and 84 serious accidents in 2014, according to the most recent research. (more…)