Article 50 has been triggered – mutually beneficial or utter cluster**ck?

11 min read

29 March 2017

A letter to European council president Donald Tusk announced that Article 50 has been triggered, starting a two-year countdown until Britain leaves the EU. But while MPs congratulate prime minister Theresa May on her wording, we wondered what UK industry leaders had to say.

The UK’s representative to the EU handed a letter to Tusk confirming that Article 50 has been triggered. May followed this up by giving a statement in parliament, claiming it to be “an historic moment from which there can be no turning back”. But do business leaders think the deal will be mutually beneficial or are we jumping off a cliff without a parachute?

James Parsons, CEO and founder of Arrows Group

“May revealed that Article 50 has been triggered – and it marks the beginning of significant change. We’re already seeing a ten per cent reduction of skilled workers from within the EU relocating to the UK. If this continues it could lead to a brain drain of top talent. Our best developers have even started taking roles in Switzerland.

“This isn’t welcome news at a time where the UK digital skills gap is already large. As the government takes these next steps it’s critical that it puts the right laws and incentives in place. In the mean time, my advice to bosses is to expand operations to where the talent is located, as well as to be proactive in expanding the pipeline of homegrown UK digital talent.”

Terry Scuoler, CEO of EEF

“Article 50 has been triggered – and while I welcome May calling for a deep partnership, she must ensure the government heads in the right direction and is not driven by those who will pressurise her to leave without a deal. That cannot be an option. Doing all of this within a two-year timetable will be difficult to begin with, if not impossible, and Britain will need to seek a transition period to enable all sides to adjust and avoid economic shocks.

“Both sides should work towards a form of regulatory co-operation that allows current comprehensive trade arrangements to continue. Our mutual national economic interest is at stake and the government must work hand-in-glove with industry to get this process right and avoid cavalier or ill-judged negotiating positions.”

Nick Katz, founder of Splittable

“I hate to be the bearer of bad news, but we spend too much time sugar coating things. A lot of companies won’t make it as purse strings are tightened. It is a shame, but at the same time that creative destruction does amazing things. It frees up talent to go find new homes at companies with more stable footing. So in the end it’s not all doom and gloom.

“Many will fall, none of us are invincible. But we celebrate trying and failing. We help each other up, give each other advice, hope, and a reason to keep on building. Our real concern is the uncertainty around immigration and foreign workers. We need clarity around policy and the things that as the UK we can control. At the very least, make it abundantly clear if foreigners will be able to stay and under what set of circumstances.”

David Mundy, government and infrastructure partner at Bircham Dyson Bell

“So Article 50 has been triggered and the UK’s new relationship with Europe is to be forged. One constitutional area that will receive scrutiny is the extent to which the Great Repeal Act confers powers to change existing Acts of Parliament by delegated legislation. These are known as Henry VIII powers. There’s an enormous volume of European law that will necessarily change. The government would find it handy to do this without promoting lengthy Bills but by using ministerial orders or other forms of delegated legislation instead.

“While there’s no doubt full Acts of Parliament will be required to deal with ‘big’ issues such as immigration and citizens’ rights, parliament will need to look carefully at what ‘Henry VIII’ powers they ought to bestow on ministers to pass new laws, in this extraordinary situation.”

What to know more about one founder deeming Brexit to be a total and utter cluster**ck? Keep going to the next page then.

Francesco Cardoletti, founder of PawSquad

“The UK is a net receiver of funding from the EU for R&D. As these funds dry up, the UK will not be able to retain scientific talent. Along the same line, the EIF backs some of the largest UK VC funds and it is not clear whether it will continue backing tech firms. So the fact that Article 50 has been triggered could be seen as the equivalent of jumping off a cliff hoping that your untested parachute will open.

“It is quite the risky business. The government approach to Brexit has been strictly political and it is clear the cost to the UK economy has not been factored in. Regrettably, how we’d like the process to look is irrelevant. We have effectively no bargaining chips and the EU has little to no incentive to offer a good deal. Our best hope is (i) to find a solution for EU/UK foreign residents (ii) retain passporting rights for financial institutions to trade in the EU and (iii) create incentives for business to keep investing in Britain’s economy.”

Paul Drechsler, president of CBI

“This is a pivotal moment in our history and it’s time to be ambitious and confident. It is in the interests of businesses across Europe to work together in absolute determination to make a success of Brexit. Of course, we’ll need to secure some early wins. The first six months are crucial as the UK heads into these challenging and unprecedented negotiations. Most welcome of all would be the immediate guarantee of the right to remain for EU citizens here and UK nationals in Europe.

“Meanwhile, we must maintain some influence over regulations – and discussing new trading arrangements should go hand-in-hand with negotiating our exit. It will be important to deliver on the commitment to include the devolved nations and all regions of the UK in the discussions. Business has a crucial role to play in making the economic case as the negotiations progress so we can be clear about the impact on real people, jobs and communities.”

Benjamin Southworth, founder of Unicorn Hunt

“Article 50 has been triggered and it needs to be treated like any hugely disruptive moment – there are opportunities to rebound, rebuild and reinvest. But Brexit, in my view, is a total and utter cluster**ck. The current conservative administration and it’s parliamentary opposition are unfit for purpose. I read the writing on the wall and am now very happily based in Amsterdam and enjoying the process of ensuring my European citizenship.

“I’ve remained fairly silent on this matter, but it is the worst self imposed, unnecesary political catastrophe in living memory. I suggest you all move to Amsterdam, Lisbon, Paris or Berlin and continue building world class businesses and teams until the UK has learned to grow up and stop being a rock in the sea populated by supermarkets. London may survive through sheer mass and money, but it’s going to be close.”

Nancy Curtin, chief investment officer at Close Brothers Asset Management

“Theresa May has finally announced Article 50 has been triggered. While May faces the tall order of negotiating the best possible result, she does have a surprisingly strong economy at home. The fall in sterling provided a boost to the value of UK large-caps, given the largely international makeup of the FTSE 100. It is also bringing some economic upside, stimulating a much awaited rebalancing of the economy, as exporters and manufacturers benefit from the cheaper pound.

“For the most part, we are yet to see the negative effects many touted as inevitable. However, with inflation on the increase and with the pound reaching a one-month high against the dollar, it’s unclear how long this positive backdrop will last. If companies choose to pass on the higher price of imports to consumers, it may be short-lived. Then there’s the situation in Europe itself. Political uncertainties loom and the outcome of the French election could impact negotiations.”

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