Brexit

Those of you who have read Kafka’s “The Trial” may understand my feelings and concerns following last Friday’s vote. The words “lunatics” and “asylum” come to mind.

This blog is focussed on the impact on business, but before I start I’d better nail my colours to the mast. I was a firm believer that the UK should remain as a member of the EU. Yes, it is a (deeply) flawed body, but I think the decision reached in the Brexit referendum has best been summed up by the cover of the New Yorker magazine. I’ll stop the personal rant now, but if you do want to hear much, much more, then call me.

As I said, the focus of this blog is the impact the decision has on business – our clients, friends and colleagues. It is trite to say that, on 28th June 2016, when asked “what now?” the answer is “nobody knows”. None of us would, I hope, go into critical negotiations without knowing what we want, considering what the other side wants and working out how to get there. And critically, we would counsel against laying down ultimatums without being prepared to carry them out. But, I am getting into rant mode again.

We are already starting to advise clients on the likely impact of the decision:

  • Should holding companies be set up elsewhere in the EU
  • For businesses based elsewhere in the UK, might a holding company in Scotland make sense if there is a possibility that Scotland will remain in the EU
  • What do we do about key employees who come from other EU countries?

We will be preparing and updating a briefing note for clients as the implications of the referendum decision become clearer – if they ever will – in the coming weeks and months (and, heaven help us, years). If you’d like to be on the circulation list, please email brexit@ccwlegal.co.uk.

Let me finish with a practical example. Friday’s result came on the last full day of a holiday in Torridon. For those of you who don’t know the area, Torridon is a remote and beautiful part of Wester Ross, in the north-west Scottish highlands. To get there – one of the EU’s “less favoured areas” – you pass along roads and projects partly or mainly funded by EU money. And, as a result the local tourism business is doing very well: you see lots of non-UK number plates. The owner of the hotel to which our cottage was attached has 25 full time employees – 3 of whom are UK nationals (largely because he couldn’t get other UK nationals to fill vacant posts). And by Saturday morning he was worried whether he would be able to employ non-UK nationals in the future; whether he would have to apply for visas; and so on.

The Chinese curse was “may you live in interesting times”. Or, more relevantly, be careful what you wish for.

John Clarke

28 June 2016