The UK has voted in favour of exiting the European Union. At 6am the result was around 52% in favour of Brexit, 48% against, and that was not expected to vary a great deal as final results come in.
What now? In April, New Power polled its expert forum to ask about the possible effect of Brexit on their businesses.
In our final question, we asked how long it would take before companies would feel confident in making business decisions for the future in the event of a vote to exit.
We asked the Expert Forum: in the event of a vote for Brexit how long do you think it will take for your organisation to be able to confidently make business decisions for the future?
Overall, a quarter of respondents in the energy sector thought they would be able to take immediate decisions in the event of a vote to exit. “The uncertainty over the vote will have gone, and for business as usual decisions this will help, longer term we will only have to be concerned about UK policy decisions. The overarching layer of European policy will have been lightened,” said one.
Half of respondents thought they would have to wait until the terms of any exit were understood. And one respondent summarised the resulting problem: “ Virtually no consideration has been given as to how the UK will be able to withdraw legally from the EU.”
The energy industry is confident that the UK and European electricity and gas industries will remain closely linked after exit – nevertheless, a quarter of respondents were very cautious, saying that business decisions would be delayed until after the exit had been completed or even longer.
In a simultaneous poll of water companies carried out by The Water Report, nearly 60% thought they would be able to make decisions once the terms of exit were understood – but one added a timeframe: “I think it will take a number of years to negotiate Brexit and a few more to implement.” And 24% of water companies expected major decisions to wait until immediately or some time after exit was complete.
If the vote were in favour of exit: what is your immediate action?
We asked both energy and water Expert Forum members what their first action would be in the event of an exit.
Some had a cautious approach:
“Accept that the people have spoken – and realise life (including trade and investment in energy) will go on, one way or another.”
“Do nothing – sit tight and see what is happening.”
“Take no action, but continue as we are, but start to access the opportunities.”
“Apologise to my European clients, and seek to maintain relationships.”
“Confirm existing financing facilities.”
Some needed more information:
“Seek advice on potential impact on competition law.”
“Change macro-economic assumptions on inflation and exchange rates, with feed-through to commodity prices. Become more positive on the defensive regulated utilities.”
“We will have to review our investment and project pipeline, but have already slowed down investments.”
“Wait to understand the full terms and how they will be implemented.”
Some expected or planned immediate action:
“Issue a statement as to how the company will be responding, having considered this eventuality in detail over previous months. It needs to accept that the pound sterling will probably be quite weak, thereby benefiting exports. Also any statement would need to focus on handling key customers that underpin the company’s revenues and profits.”
“Plan to downsize.”
“Activate our plan to replace euro bank loans on the open market.”
“Spend time trying to persuade shareholders that it will be alright really!”
“An organisation I do some work for would immediately revise its procurement processes.”
“We are a consultancy and we would pitch for new clients.”
New Power Expert Forum
New Power, in partnership with market research company Accent, consults the Expert Forum every two to three months on a key industry issue.