Big Four in talks with UK government on Brexit
Accountants’ expertise will be needed as the trade negotiations start following the UK’s vote to leave the EU, the government has confirmed, while the Big Four are building up specialist Brexit teams to meet the demand for advice on the way forward, reports Pat Sweet.
Sir Jeremy Heywood, head of the civil service, has held talks with professional services firms including EY and KPMG, while there have also been discussions with members of the government’s professional and business services council, who include PwC and Deloitte. PwC has said ‘we are ready to help as required’.
The government needs to develop teams of negotiators to handle a range of trade deals with other countries, plus regulatory issues, which will need to be addressed in the next couple of years. Recent estimates suggest the UK currently has around 20 ‘hands on’ trade negotiators, while there are some 600 trade specialists in Brussels.
Mike Turley, Deloitte’s head of public sector, said: ‘Government has looked to the private sector for input as they begin the large task of withdrawing from the EU.
‘We have considerable experience of some of the public sector’s biggest and most challenging programmes. Whether in the form of bringing our own business experience to the table, or helping the public sector equip itself with the right skills and operating models to deliver a successful exit, we are in position to provide support to government as needed.’
In common with the rest of the Big Four, Deloitte has established a Brexit Centre to co-ordinate the firm’s response and share knowledge.
Turley said: ‘Prior to the vote, we identified Brexit leads for each of our industry groups and conducted “war game” exercises to help our clients and our own firm think through potential scenarios.’
Similarly, PwC reports that in the 12 months leading up to the referendum it produced a number of impact reports, for the CBI and TheCityUK among others, and created an EU referendum hub to help inform staff on the debate. Since the result, PwC firm has held a series of webcasts to discuss the main issues and implications which the firm says have been watched by over 20,000 viewers and prompted hundreds of questions.
Kevin Ellis, chairman and senior partner of PwC, said: ‘The Brexit group I lead has three areas of focus – supporting our clients with what Brexit may mean for their business plans; developing our insight on the impacts on industries, regions and people; and gearing up to resource areas where there is client demand.
‘We are already seeing increased appetite for strategy advice as well as for support around treasury management, immigration advice and pensions.’
Steve Varley, UK chairman, EY also confirmed having a team in place since last year to prepare for the potential outcome of the referendum, and said the firm was already working with many of its clients to assess the impact of Brexit on their business.
‘Brexit will affect their business strategy, supply chain, funding, tax position, regulation, growth opportunities and talent pipeline.
‘We have a big and diverse team in the UK – in the heart of our business we have mobilised a group of more than 60 partners to help our clients respond. Given the importance of UK business in global trade, we are working with our global business to put together the right teams and solutions for our clients across the world,’ Varley said.
Earlier this month, KPMG announced a newly created role of head of Brexit, to be filled by Karen Briggs, who was formerly the firm’s head of solutions, which comprises tax, deal advisory and management and risk consulting. KPMG also has a Brexit response panel, which comprises senior partners and experts in tax, economics, audit, immigration and financial regulation amongst others.
Karen Briggs, head of Brexit at KPMG, said: ‘Our dialogue with clients shows that they need expert support on mitigating the risks and taking advantage of the opportunities that arise from a Brexit. To ensure we can deliver both the Brexit-related services our clients are demanding, on top of business as usual, I plan to build a dedicated team.’
KPMG’s advice to clients is to consider the next two weeks, two months and two years to assess the path ahead. Briggs reports many inquiries at the moment focus on immediate risks, but there are some clients also looking further ahead in areas such as bolstering trading relationships with China.
‘We are also engaging international clients and are observing, interestingly, predatory intentions from other European nations considering what competitive advantage a Brexit might mean for them.
‘Of course, it is not just a case of risk versus opportunity. For some businesses, a potential Brexit is stalling activity. The M&A and IPO market would be a good example of this. We are the largest M&A adviser by volume and we have seen half a dozen deals we are working on put on hold in the wake of the vote outcome,’ Briggs said.
Turley sums up the changing landscape as Brexit becomes a reality, a month after the referendum vote.
‘While every part of the UK economy starts to grapple with the implications of our departure from the EU, just one – the public sector – will ultimately be responsible for its implementation.
‘But business as usual will need to continue – taxes will need to be collected and public services will need to be delivered.
‘The process of leaving the EU will be a marathon not a sprint and as the campaign rhetoric fades, Brexit becomes a reality with complex operational, administrative and political challenges,’ he said.
Source: CCH Daily – Big Four in talks with government on Brexit
