As London business creation outstrips the regions, loss of vital investment could be devastating.
Jenny Tooth OBE, CEO of the UK Business Angels Association, outlines just why a trade deal must be secured to appease the needs of regional business.
Symbolic of British car manufacturing, Nissan’s operations in Sunderland have been responsible for the production of 10 million cars since production began in 1986. Last financial year, 415,000 vehicles came through the production line at Nissan’s plant, a decrease of 72,000 on the previous year. Just five years ago, car production in the UK – particularly in Sunderland – were reaching record levels. Now, with the reality of Brexit looming, confidence is on a knife edge.
In the past two years, Nissan have halted parts of their SUV productions in Sunderland, with further considerations to follow post-Brexit. Most notably however, is whether a free-trade deal will be struck between the UK and the European Union. If not, resulting tariff’s on exports into the EU make production in the UK unviable in the eyes of Nissan.
The issue of damage to supply chains and access to free trade can be felt far more locally too. Keen to remind businesses that the implications of Brexit are far from over after “Brexit Day” on Friday 31st of January, Jenny Tooth OBE, CEO of the UK Business Angels Association, discusses the need for a free-trade agreement to secure the future of regional British SMEs:
“Nissan’s operations in Sunderland serve as a reminder to us all that regional businesses and economies could be devastated if a free-trade deal isn’t agreed between the EU and the UK. We see Brexit as an event that really could go one of two ways. Until we see the details of a future trading relationship between the UK and the EU, we will continue to hold our breath.
Brexit does pose several palpable threats to the economy. Firstly, there are thousands of SMEs based in the regions that are essential to supply chains, serving as the lifeblood for many global businesses. If these global business determine that their operations in the UK are no longer tenable, this will inevitably have an impact on British SMEs; most likely severe. However it should also be noted that innovative SMEs – of which Britain has an extraordinary wealth of – have a knack of spotting opportunities. In the way that British FinTech’s found opportunity out of the Financial Crash in 2008, we could see emergent businesses with robust visions for expansion post-Brexit. Business angels will always be there to support innovation too, using much of their experience and knowhow to steer scale-ups through stormy waters. Our job will be made much easier however if a trade agreement can be struck between the two parties of course.
As an investment community, the UKBAA deal with investors that fell on both sides of the aisle in terms of being in favour of Remaining and Leaving. However, we now all have to focus on what will make Brexit a success for SMEs, particularly in the regions. Boris Johnson has pledged to “level up” Britain’s regions, addressing the issues within our imbalanced economy. Until the Budget however, we can’t say for certain what this will look like. We do however hope that investment pledges are honoured, especially with the loss of Horizon 2020 and Jeremie funding as a consequence of Brexit.”