Love it or hate it, last week Britain voted to leave the EU in the referendum.
Whether you voted in favour of leaving or not, you will no doubt be currently swept up in conversations regarding our future, the impact on our economy and UK businesses.
Whilst speaking to year 10 Business Studies students at Hallmead School in Essex last week, Ergro Chairman Chris Wollen posed the question, “How do you think a Brexit will affect business in the UK”. Too young to vote, these 14-15 year olds had some interesting things to say on the subject. We got them to write their answers in under 500 words, with the winning entrant receiving a prize and a £50 donation to their chosen charity.
Here’s what some of them had to say…
“The European Union is an economic and political union. The UK has been part of the European Union since 1973, because of this we have been a single market which allows free movement of goods, capital, services and people between member states. All of the countries within the European Union are independent but they all have to follow trade rules from other countries.
Leaving the EU would cause unemployment to rise, this means that the wages pressure would grow.
If Britain was to leave the EU this would affect our business because this would mean that we would have to deal directly with other nations out of the EU and our trade would become more expensive, whereas if we stayed it wouldn’t affect our business as it would just be the same.
There are also some benefits with leaving the EU, connecting businesses, such as goods being sold to other countries becoming cheaper for buyers.
With the extra pressure of inflation, the Bank of England may consider raising interest rates. This would be a disadvantage of leaving the EU because mortgages for business would become more expensive and also if you’re taking out a loan this would become more expensive to repay which may lead to a business going into debt as they can’t pay back the loan. If costs for landlord’s increase, this would mean that rents would also be likely to rise.”
“One thing that will affect businesses is that the sterling will drop in value because people are worried about the economy so people are not buying the pound. This will cause some major companies such as food sellers (Tesco, Morrison’s, etc…) and companies that sell electrical goods (PC World) will have to pay more money to import food and electrical goods because the sterling would not be worth as much as before so they would have to pay more to get them.
On the other hand, the drop in sterling will be very good for exporters and farmers, this is because these companies will be selling their goods cheaper overseas and can help flagging demands.
Also if businesses have a bigger cost from having to import raw materials for a more expensive cost they might have to face some negotiations with staff of their company about salaries because they won’t have as much money.”
“Leaving the EU will leave UK businesses in uncertainty so it is difficult to plan a future for their business. Trades would become more time consuming and more expensive to conduct.
Also affected would be imports, exports and competitiveness as other countries will be able to trade easier within the EU but we will not, meaning less people may want to trade with us.
Although there are also some benefits with leaving the EU such as goods being sold to other countries becoming cheaper for buyers, this means potentially we could sell more. Although this may take the opposite turn, meaning that if we don’t sell as many, we will also be losing money and goods that we are selling. This will mainly effect the SME’s as they will have a larger disadvantage to their competitors.
Although now the value of the pound has dropped, this will cause problems for sales all over the world.”