As the UK gets ready to leave the EU, some companies are preparing to leave the UK. Companies such as John Lewis and Ryanair have already said that they have made a loss since the plummet of sterling against the dollar. They fear that the worse is yet to come.
On the other hand, a pro-Brexit campaign group claims that leaving the EU could create 400,000 jobs. Some economists argue that this takes no account of the risks to exports.
The pound dropped to a record low against the dollar and Britain has borrowed over £12bn due to its fear of Brexit’s impact on public finances (£1bn more than experts predicted). Britain faces 2017 without a formal statement on the Government’s negotiating position and aspirations (perhaps understandably).
Government cuts have been all too familiar in recent years and it doesn’t appear that leaving the EU is going to benefit economic stability or the employment figures. Thousands of jobs could be jeopardy if many European companies based within the UK leave the country. Many companies fear the prospect of new taxes when trading with Europe if negotiations with the European council do not work in favour of Britain.
If Brexit proves economically costly, we will be faced with the question of whether spending will decrease or new taxes will be introduced in order to compensate.
Since the European Communities Act 1972 was passed the UK has benefitted from various aspects of being part of the EU which we now risk losing. Importing and exporting without tariffs is a huge economical benefit as it allows us to trade efficiently. Companies are hoping that Theresa May will be able to negotiate a retention of the trading advantages, though it is unclear whether she can offer anything that the EU values.
The High Court recently ruled that the Government cannot exit the EU without the support of the House of Commons (a decision which is being appealed to the Supreme Court). It remains to be seen whether this decision will withstand appeal and if it does, whether MPs will make their support conditional on the government succeeding in extracting any particular concessions from the EU.
By Ayesha Belaid
Part of our Brexit series.