New study says UK is still a great place for business despite Brexit fears
Nearly three quarters of British firms say the UK remains a great place to start and grow a business, according to a new survey.
The Growth Climate Index from the Business Growth Fund (BGF) reports that 74% of business leaders claimed the UK was still an attractive business environment despite uncertainties related to the vote to leave the European Union.
There are certainly worries among the business community. Nine in ten said they expect to see a short-term decline in economic growth. This could lead to some firms struggling and some could face a period of restructuring in order to weather the storm. The majority expect the outlook to improve over time however and only around two fifths (41%) of respondents said that they were postponing key decisions during this initial period.
Some remain more pessimistic about the long-term effects however. While performance might improve over time, 55% thought growth would still slow in the longer term and around three quarters (76%) felt that Brexit would lead to a fall in investment.
When it came to the forthcoming negotiations regarding the UK’s eventual withdrawal from the EU, the top priority for businesses (cited by 52%) was continued access to the single market. This was followed by encouraging foreign businesses to invest in the UK, or to remain in the UK if already active (22%), ensuring businesses still have access to top foreign talent (10%) and reducing the burden of red tape on businesses (9%).
Chancellor George Osborne has already floated the idea of slashing corporation tax from its current level of 20% to less than 15%. If implemented, this would make the UK’s business tax regime one of the lowest in Europe, close to Ireland’s level of 12.5%. Mr Osborne said he wanted the UK to be a “super competitive” economy in order to attract and retain foreign businesses.
When quizzed on which sectors they thought would be hardest hit by Brexit, financial services was way out in front, being cited by 58% of respondents. Manufacturing came next (16%) followed by construction (9%).
By Phil Smith