AS THE ARGUMENT FOR AND AGAINST LEAVING THE EUROPEAN UNION RUMBLES ON, MANY LASER CUTTING BUSINESSES ARE CONSIDERING WHAT WOULD HAPPEN IF THE UK VOTES TO LEAVE.
LETS CONSIDER A FEW OF THE ISSUES BELOW:
Key Machine Suppliers
Suppliers such as Trump, Bystronic and Amada are all located overseas importing machines via local subsidiary companies. The UK represents a big marketplace for these suppliers so an exit scenario wouldn’t see the companies stop selling their machines into the UK. Perhaps prices could increase though if some kind of tariff was imposed on imports? However, this is unlikely as any post Brexit government is unlikely to want to start imposing tariffs that might start a tit for tat tariff war. In addition, because UK laser cutting subcontractors have no other option then to buy abroad this would just increase costs to UK companies.
It’s All About the Sales Stupid!
The majority of UK laser cutting companies sell to the rest of Europe either directly or indirectly. This is probably the biggest concern to business owners about whether freedom of trade will still be enjoyed by them or by their customers. Much of this depends on how the trading position plays out after the Brexit, countries such as Norway and Switzerland aren’t full members of the European Union but still enjoy trade agreements. Certainly it would be difficult to envisage a situation where the rest of the EU stopped buying goods from the UK overnight, however, longer term if there is more red tape involved in trading with the UK then a deterioration in sales may be likely.
Rules, Rules and More Rules!
There has been a lot of scaremongering about the rules which Brussels has enforced on the UK. Many business owners may be hoping that an exit would mean less red tape in areas such as health and safety where some rules take away the need for self-responsibility. Long term this might be the case and although some of the rules have been exaggerated the UK would obviously have more freedom when passing legislation.
Many UK laser cutting companies recruit staff from outside the UK for technical and non-technical roles. The ability to take on someone from within the EU without having to worry about Visas or Permits is a big advantage. If Brexit means companies can no longer do this then this may bring the UK lack of skills into even sharper focus.
Personally, I don’t think that staying or exiting the EU will have much effect either way long term on the success of UK PLC. Although the real facts are hard to get to with political hyperbole that surrounds the Brexit issue, the positives will probably counter the negatives resulting in a nil effect.
However, the timing of a Brexit could not have been worse from an economic point of view. Many commentators believe that the global economy balances on a knife edge and that the slowdown in China could expose the weaknesses in other markets such as the EU.
To quote the legendary Warren Buffet “only when the tide goes out do you discover who’s been swimming naked”!
Simon Tregillus | Director
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