Legal certainty on Brexit transition deal more important priority for business

Bosses of medium and large size companies across the North of England believe that legal certainty on a Brexit transition deal agreed quickly is of greater value to their business than a more comprehensive future deal agreed further down the line, according to new research.

EU and Union flags. Photo : Stefan Rousseau/PA Wire

The KPMG survey of CEOs and CFOs spoke to 42 senior executives in the North of England. It found that two thirds would prefer legal certainty on Brexit transition arrangements by April 2018 with a less ambitious future deal, rather than waiting for a more comprehensive future deal to be agreed much closer to the date of exiting the EU.

Annette Barker, head of Brexit at KPMG in the North, said: “Whether businesses in the North see Brexit as a burden or a great opportunity, most regard certainty around transition as one of the fundamental building blocks for growth. Whilst the public is more fixated on the final deal, the CEOs we’re speaking to are often willing to accept a more modest deal in exchange for certainty so they can make investment decisions now.”

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Elsewhere in the survey one in five, 21 per cent of, CEOs and CFOs in the North said their firms will not be able to operate as usual in March 2019 if there is no transition deal.

However, when asked what their firm’s situation will be if the UK and EU do not reach a ‘steady state’ transition agreement by April 2018, the business picture is more mixed. Two in five, 42 per cent, expect a negative impact on their business, but just under a third, 31 per cent, expect their business to see some competitive advantage.

Ms Barker said: “Many people talk about Brexit as if it’s exclusively a negative force to be mitigated. But a number of our clients see it differently. Whilst more than two fifths expect some negative impact - including job losses - if a transition period isn’t agreed by April, many companies, particularly medium-sized challenger brands, see disruption as an opportunity.”