This week there was a flurry of interest from the media over a suggested ‘leak’ from DEXU (Department for Exiting the European Union to give it its full name) on their contingency planning for no-deal Brexit scenarios. These scenarios ranged from mild to severe to ‘Armageddon’! Of course, this made for a great story in the Sunday papers (Sunday Times) with suggestions of the collapse of the port of Dover, empty supermarket shelves in Cornwall and Scotland and even hospitals running out of medicine. Earlier this week, I was asked by the BBC (Victoria Derbyshire Programme and BBC Cornwall) to give a view as someone who has some understanding of the EU landscape and a business owner in Cornwall.
I’m not going dwell here on whether there’ll be Greek yoghurt and French cheese at the dairy counter… But I am going to dig a little deeper on comments I made on air which were along the lines of, ‘there’s a real vacuum of information on the content of the Brexit negotiations and what life is going to be like for a business in April 2019’ (that’s less than 10 months away). Interestingly, the same day (Monday 4thJune) the PM met with the FTSE 100 Business Advisory Council which pretty much said the same thing, i.e. ‘[we] urgently need clarity on the Brexit plans’.
It could be argued that no-one should show their hand too early in any negotiation, but frankly I think we’ve passed that point. And surely it would make a stronger case if Government and business were speaking with a united voice? In all my experience with Brussels, I have always found that they respond well to a strong evidence base and the backing of a range of stakeholders (especially if they are businesses and communities).
So, where is the vacuum? Well, no-one can accuse Whitehall officials of not consulting (albeit through channels that most of the population won’t engage in). There’s been on-line consultation, Select Committees, debates, specialist workshops, numerous think tanks. You get the picture. However, there’s almost nothing of substance that has come out the other end – or if it has, it’s taken so long that much of it won’t be ready for 2019.
My evidence? Well, there’s the obvious focus on a customs union (or not) and the free movement of people, goods and services, but no clarity on how it will all work in practice. Scenarios range from long queues at Dover and Calais right through to the UK throwing open its borders and the French locking down theirs. Don’t even mention Northern Ireland. The fact that the Brexit White Paper is now delayed until after the 28thJune EU Summit is cause for even more concern.
Beyond the ‘cause célèbre’ examples, here’s a few you might not be so aware of:
- DEFRA (Department for Environment, Food and Rural Affairs)has started two major pieces of work in recent months, one on the ‘Future for Food, Farming and the Environment’ (essentially a consultation on a future British Agriculture Policy) and the other on ‘Environmental Principles and Governance after EU Exit’. Well, the consultation only ended on the 8thMay 2018 for the Future of Food and we’ve heard nothing since. The consultation on Environmental Principles doesn’t even finish until August 2018. Given the fact that the UK Government has talked about a “Green Brexit”, that a significant proportion of the EU budget comes back to the UK in this area, and that food supply and our environment are reasonably important to our survival, this causes concern. Even if officials work their little cotton socks off between now and 2019, there’s still a transition period to organise and prepare for, and there’s been absolutely nothing about that.
- Shared Prosperity Fund:If you’re reading my blog, you’ve probably heard of this, but it’s essentially what traditional EU funding programmes will (or not) get replaced with. The consultation hasn’t even started yet. Rather, the current EU programmes will gradually grind to a halt/slow death by 2020. To be fair, the Government is upping its investment profile across research and innovation as part of the Industrial Strategy Challenge Fund and the work of the UKRI (UK Research and Innovation). That’s great news for some businesses – but it won’t impact directly on the vast majority. There’s a very real danger that there will be a complete gap in investment on things like employment, skills and SME support once the current EU programmes end.
- As I said, in the last 24 months there’s been consultation on everything from migration to medical instruments to the justice system. There’s also been various spats that have highlighted discrepancies in approach – can UK business get involved in all parts of the Galileo satellite project or not? But the simple fact is that almost nothing of clarity has come out the other end of this consultation sausage machine.
Does it really matter?
I’m generally a glass half full kind of person, and I know there are rafts of officials working very hard behind the scenes to get this stuff done. But there is an enormous amount to do. Over 20,000 pieces of legislation and polices and budgets and so on. It’s not going to be ready for next April. This is going to drag on and on – and I hope officials will be allowed to concentrate on the really critical stuff to underpin some kind of economic stability before any headline grabbing policies the politicians love.
Businesses and investors in economic growth are going to have to operate in an uncertain global market for quite some time to come – and that’s not a place any investor or business wants to be. It’s not even as if the UK economy is robust to cope with that in the first place, with a more than disappointing set of results in the first quarter of 2018, the weakest for six years.
This could be an opportune time for breaking the mould and promoting more innovative and even creative way of doing business. Finding new markets and clusters, re-thinking how our supply chains work, using technology to keep a focus on lean and agile production. Those who are nimble and brave may do very well. Those who are part of a European supply chain that is difficult to extract from, or who rely on additional investment to manage and enhance land, and those who are reliant on additional support in areas such as employment training, may struggle. You might be a business reading this thinking, “I don’t export, I’m not part of an EU supply chain, I don’t have a migrant workforce – this isn’t going to affect me at all”. Well I think it really is – even if it’s only to access your usual business supplies and of course, fill a shopping basket with basics from the dairy counter.
Here at ROTHWELL. we work with and support businesses who want to come through Brexit uncertainty in a stronger positon. Contact us at hello@rothwellpoint.com