Even before UK citizens had cast their vote on Brexit, major companies operating within Britain warned of the negative effects that triggering Article 50 would have on their business. The EU’s trade relations and freedom of movement have helped define the modern era of business in EU member states, and losing out on these many benefits will have serious and unpredictable consequences for companies and workforces all around Europe.
In the aftermath of the Brexit vote, and in this time of uncertainty, key industry leaders are already leaving the islands and relocating elsewhere. If the UK fails to negotiate a favourable Brexit plan and establish good trade relations with other EU member states post-Brexit, more businesses will follow the lead of relocating. Below are some industries that have been hit the hardest by Brexit – and the businesses that are leaving the UK as a result.
Following the ‘leave’ vote, UK-based airlines will have to rethink their European routes. They will also have to recalculate fares, taking into account the cost of international fees and visas which will apply when the UK is no longer an EU member.
Multiple aspects of aviation, from security measures to air traffic management, are heavily regulated by international bodies for obvious reasons. The right to offer services between two different countries are governed by agreements between the respective countries’ governments. The EU has a specific set of these aviation rules which apply tomember states, granting EUmembers special benefits. British airlines may no longer be entitled to these benefits after Brexit.
Michael O’Leary, chief executive of Ryanair and Remain campaigner, has already vowed to shift Ryanair’s strategy away from the UK, focusing instead on expanding at EU airports and prioritizing EU routes. “The UK is going to suffer some significant economic damage when they get into the entrails of the Brexit decision. We hope the UK does well out of it, but I’d be very concerned,” he said.
Meanwhile, the UK’s second biggest budget airline, EasyJet, has reported record losses in its shares since the vote, and is considering moving its headquarters away from the UK.
For the lucrative igaming hubs of the Isle of Man and Gibraltar – both of which have enjoyed EU member benefits through virtue of being included in the UK member agreement – Brexit is bad news. In Gibraltar, the igaming industry accounts for 20-25% of the GDP. “The government here has made it very clear that a Brexit has even more severe implications for Gibraltar than it does for the UK,” says Gibraltar’s gambling commissioner, PhillBrear.
Igaming companies have located their headquarters in Gibraltar and the Isle of Man in part because of their favourable tax benefits and gambling license laws. But with Brexit threatening the EU market access that these companies enjoy (benefits such as not having to apply for separate licenses in every EU country, and hassle-free employment of multinational workers) it is understandable that some of the major igaming brands are considering relocation.
Indeed, many people working within Gibraltar’s igaming industry live in Spain and commute to the state each day. They have been able to live in one country and work in the other without difficulty thanks to the EU – but this may no longer be the case. Meanwhile PokerStars, one of the world’s biggest online poker rooms, is headquartered on the Isle of Man but is able to operate in the UK and other EU countries through a Maltese license. Having the validity of this license, and the market access it represents, threatened by Brexit might just be enough to force PokerStars to relocate.
Domestic care and health sector
Around 23% of those employed within the UK’s domestic care sector are European migrants. Out of these approximately 84,000 care workers, only 10% have British citizenship. The future of those carers remains uncertain – but a denial of their right to continue working in the UK would be crippling to the domestic care sector. In the NHS, almost 10,000 doctors and 19,000 nurses face the same uncertain future.
A post-Brexit Britain will also see fewer foreign healthcare specialist, teachers and consultants coming to the UK, as training and practises in healthcare are no longer EU standardized.
“It is impossible to predict the full impact at this stage, but clearly it is vital that our Government seeks a strong, nuanced agreement with the European Union that recognises how interwoven NHS and EU policies have become,” says Stephen Dalton, Chief Executive of the NHS Confederation.
The past ten years has seen a great boost in the UK’s car manufacturing industry. Out of the approximately 1.6 million cars Britain produces annually, around 77% are exported abroad, and 58% of these are exported to EU countries. Employing the same EU regulation and quality standards in the industry has made trade between EU countries much easier, but Brexit looks to put a halt – at least in the short term – to the business of British car manufacturing.
As the UK continues to stall and struggle in its attempt to negotiate a favourable post-Brexit plan, the future looks increasingly gloom for those businesses who are considering relocating, and for those businesses unable to relocate but will instead face the financial losses and bureaucratic nuisances that Brexit is predicted to cause.