The referendum vote last June for a ‘Brexit’ from the EU has ushered in a new age of uncertainty, and possibly of new opportunities, for UK industry. The vote and the details of the British exit from the legal and economic structures of the European Union have been highly contentious both at home and abroad. No one is yet certain what forms post-Brexit agreements and funding will ultimately take and what effects this may have on businesses and research.
“The situation is still very fluid, so it’s business as usual for many companies for the time being”, comments Victor Rouleau, Senior Associate in Innovation Funding at Leyton UK. “Some have made decisions to try to pre-empt any potential unfavourable results, but their freedom to change varies. A digital services company may be able to react more quickly, for example by moving their operations elsewhere in the EU should it become more difficult to recruit qualified staff in the UK. However, a manufacturer will have to be more deliberate in their decision-making, while they assess the impact of changes to the business climate such as fluctuations in imported raw material costs”.
On 23 January, Prime Minister Theresa May revealed further details about a 10-point plan by the UK government intended to help boost British industry after the uncertainty of Brexit and the loss of EU funds. The government’s new interventions will focus on:
- Investment in science, research and innovation
- Developing employees’ skills
- Upgrading infrastructure
- Supporting business start-ups and company growth
- Improving government procurement
- Encouraging trade and inward investment
- Delivering affordable energy and clean growth
- Cultivating world-leading sectors
- Driving growth across the whole country
- Creating the right institutions to bring together sectors and places
R&D in the UK will be one of the main beneficiaries of these steps, which include a total of £4.7 billion in additional funding and grants for companies and research organisations. One of the main concerns since the referendum has been the curtailing of research due to the loss of EU funding and due to potential exclusion for international consortia.
“A running theme since the Brexit vote has been the importance of encouraging R&D in order to help UK companies and the national economy to weather the change and thrive in the long run”, says Chris Hallman, Associate Partner in Innovation Funding at Leyton UK. “The Prime Minister has indicated that the government will be adopting a far more active role in encouraging R&D. This will help some industries more than others, since a lot of it will be specifically aimed at pursuing local growth priorities including improving energy, transport and broadband communication”.
These initiatives and the outcomes of the ongoing negotiations for Britain to leave the EU will potentially have a big impact on Leyton UK’s specialties as well including R&D tax relief, employment law and grants.
“We have been keeping a close eye on the government’s responses to Brexit and on what they may mean for our clients”, says Dr. Alexi Baker, Grants Specialist at Leyton UK. “In theory, the big influx of new funding will go a long way to offsetting the loss of EU funds, and certainly it will give us even more opportunities to help companies optimize their funding applications. However, we don’t yet know the details of the international agreements which will have to be agreed to for the UK to leave the EU. These may leave some companies at a disadvantage – particularly those with export operations and international outsourcing or subcontracting. Only time will tell”.