This proposal is based on economic reform in this context this research paper discusses about the impact of Brexit and the economic reforms required decreasing the negative impact of Brexit in the UK. The reason behind selecting this case study is that it is identified that the decision of the UK to leave EU has created many concerns for the employment, economic growth and many other parameters (Copeland, & James, 2014).
So, it is essential to give concern towards this parameter and to design effective proposal which will remain supportive to decrease the negative impact of Brexit over the country. This proposal can be used for academic as well as managerial implication as it has supported to consider real challenge of the country. So, in this context, this proposal will support to offer the understanding regarding the impact of economic reform of taxation and tariff plan on the UK export.
Theoretical and Empirical Rationale
The motivational factor of undertaking this proposal is that Brexit has given huge negative impact towards the UK which is inversely impacting the country economic growth.
So, it is essential to take corrective action to eliminate the situation of risk and to give concern towards the upliftment of the economy. In the context of Brexit, it is identified that it has highly impacted the UK exports. From the statistics, it is identified that in 2015, the UK has exported £133 billion goods to the EU (Meng, et al., 2013). This is almost half to the global goods exports.
Moreover, it is analysed that the Brexit has created the loss of at least £4.5 billion a year (Brinded, 2017). This loss has created the situation of increased tariffs. Due to this reason, UK business is being less competitive as compared to the EU as well as global market.
Impact of Brexit
(Source: Market Inspector, 2017)
From the above graphs, it can be analysed that from the year 2015, UK is facing the situation of decrease in domestic expenditure, exports and imports in the year 2016 and 2017. Above data has supported to reveal the clear picture of UK market and has supported to analyse the impact of Brexit on import, export and domestic expenditure (Market Inspector, 2017).
So, from this it can be analysed that Brexit has directly impacted the UK economy and there is a need of economic reform to eliminate such situation. Due to this reason, this proposal has theoretical as well as empirical rationale as it has supported to propose the economic reforms which can be utilized to improve the UK export (Baccini, & Urpelainen, 2014).
Impact on Aggregate Output and Income
In the context of aggregate output and income, it is evaluated that due to decrease in export, import and domestic sales, industry can utilize the strategy of decreasing the prices as it remain supportive to create competitive advantage however, it can create negative impact towards organizational profit and can decrease the chances of long-term sustainability and competitive advantage in the industry (George Mulgan, 2013).
Moreover, it is identified that it has directly impacted the country GDP rate. So, there is a need of economic reforms and for this purpose, UK needs to give concern towards decreasing the interest rate as it remains supportive for the firms to take the loan in an easy manner to boost their company performance. At the same time, it will enable to offer the products to the consumers of the domestic market in a reasonable price and will also allow exporting the products while decreasing the price.
So, this strategy will support to increase the economy of the country and will enable the export firms to increase the sales and making the effective relation in the global market. Moreover, Huang, et al. (2016) depicted that there is a need of decreasing the export tariff rate to make it easy to increase the export in the global market. This strategy will remain supportive to increase the output as well as income of the export industry as well as supports to increase the country growth opportunity.
Impact on Unemployment, Inequality and Poverty
According to the views of Faúndez (2016), it is identified that focusing towards the economic reform regarding decreasing the tax rate and export tariff will remain supportive for the UK to increase the chances of export in the global market which will remain highly supportive to increase the employment rate.
It will allow the industry to recruit new employees and labours to fulfil the global demand. In like manner, Hoddie, & Hartzell (2014) depicted that this economic reform will also allow decreasing the chances of inequality and will remain supportive towards the distribution of the economy in the society rather than in a particular group.
It will allow eliminating the wealth gap and will increase the chances of upliftment of the society. At the same time, it will support to increase the income of the individual as increase export will increase the job opportunity and will increase other opportunities as well which will decrease the poverty rate in the country (Balassa, 2013).
It is essential to give concern towards unemployment, inequality and poverty as these parameters are creating constraint towards the country growth and creating issue towards the upliftment of the society.
Discuss the Likely Environmental Impacts
Imbrogno (2016) stated that UK majorly exports, oil, gas, coal, diversified metals, mining, nuclear, wind and solar PV, tobacco and beverages. Increased export will increase the demand of these products which adversely impact the environment of the country.
For instance, increasing demand of coal will increase the chances of mining which will directly impact the eco-system of the country. In like manner, farming of tobacco will decrease the farming area for food. According to the views of Copeland, & James (2014), tobacco industry hugely impact the environment as it creates the situation of deforestation, litter, climate change, forest fires, etc.
These negative impacts are higher as compared to the negative impact of tobacco on an individual due to smoking. At the same time, conventional and liquefied gas gives hue negative impact to the health as its production directly impacts the air quality of local and regional area.
Additionally, production of nuclear, wind and solar PV creates the negative impact towards land use, habitat loss and water use (Baccini, & Urpelainen, 2014). Not only this, but also, hazardous materials are utilized for the manufacturing which adversely impacts the environment.
From this, it can be analysed that increase rate of export can negatively impact the environment. So, it is essential to give concern towards utilization of effective strategies to increase the productivity as it will remain supportive to increase the outcome and profit while focusing towards sustainable parameters. Additionally, it will enable to uplift the society on the basis of employment, equality and decreased poverty (Huang, et al., 2016).
According to the views of Baccini, & Urpelainen (2014), unemployment, poverty and inequality are the major challenge of the country which creates issue towards increasing the presence in the global market. So, government needs to utilize the economic reform of decrease in interest rate and tariff so that the new opportunities can be developed in the UK market which will remain supportive to increase the economic growth of the country while decreasing the negative impact of Brexit.
It is identified that it is necessary for the UK to increase the concern towards the economic reform of taxation and tariff to boost the export rate in the country as it will remain supportive to increase the output and income of this industry which will remain supportive towards the upliftment of the society (Hoddie, & Hartzell, 2014).
In like manner, this economic reform will allow increasing the employment rate while decreasing the level of inequality and poverty. However, in the contrary, it is identified that the increased export will directly impact the environment as well and will create question mark towards sustainability (Imbrogno, 2016).
So, there is a need of designing effective rules and regulations towards the export of the products which can adversely impact the environment such as coal, tobacco, oil, etc. as it will remain supportive to control the risk parameters.
At the same time, there is a need of giving the focus towards eliminating the situation of illegal production of these kinds of products. So, from this, it can be recommended that there is a need of boosting the economic reforms to increase the export in the UK but it is also essential to give concern towards environment as eliminating the concern towards environment can create big challenge especially in the context of sustainability. So, there is a need of focusing towards this parameter as well.
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