The Day Everything Changed

Aug 6, 2019

The entry of a new Prime Minister into No10 Downing Street at the end of July changed everything.  As the leading politician for the nation he and his team now face a fundamental test – deciding on the best way to deal with an economic, social and political dilemma brought about by a referendum vote 3 years ago.  A head of steam has been building up in British politics to leave the EU and last week the valve burst – this Prime Minister is openly determined to lead the UK out; deal or no deal.

For small and medium-sized enterprises (SMEs) the problems this raises are real and immediate.  There are questions that need answers: Am I still in business? Who and where are my customers? Can I still employ staff that are willing to work for me and that I want? Are my products or services still profitable?  And now there is urgency – will we be ready for an October exit?

There are two parts to this question – will I be ready? And will the UK be ready?

To take the first one first –
Have I done all I can to avoid the dangers posed by a unilateral government decision to leave in 3 months’ time?

Have I made an attempt to try and audit my business to assess my state of readiness?  Under what headings have I attempted this? The CBI in its latest report on the implications of a no-deal exit by the UK suggests that the headings should be: mobility (what will restricted borders really mean?); regulation (what old and new regulations will still apply to my business in both manufacturing and services?); what will be the position in Ireland (if I trade there?); people (current staff and places of origin and future staff?); data flows and information (can this be shared, will it still be available?); and finally what part do trade agreements play in the business that I do that I need to be aware of (e.g. what is the WTO and how does it operate?).

The second one mirrors this –
Has the UK, its government and its trade institutions, done all they can to help and assist me in dealing with all the issues above?

Have they looked at unilateral areas of UK preparedness, such as domestic legislation designed to provide replacements for EU funding (for example for farmers who rely on the common agricultural policy for income and assisted spending) and areas that require action on an international scale, such as the UK’s position at the World Trade Organisation in a no-deal and the position of its Free Trade Agreements with other countries outside the EU.  They also need to be preparing for mobility, regulation, data flows and information, and people issues to emerge very quickly immediately the exit happens.

A recent report (29th July) from the CBI is truly worrying reading.  It concludes that the UK is extremely unprepared both at the level of business and of government.  It says that while there has been some preparation across the UK much of the planning so far only reduces the impact by simply delaying rather than dealing with them; and that the EU has made little progress in thinking about the negative impacts of the UK’s sudden departure; and that joint work to plan for the separation of the EU and UK has been far too thin meaning that inevitably negotiations will have to continue on all the issues as they arise.  Finally the CBI notes that while there has been efforts by British businesses to get ready they have been hampered by unclear advice, tough deadlines, high costs, and masses of complexity.

In a word it’s a mess! Well ‘we knew that’, some will say.  But this is probably the riskiest of government projects that has been attempted in post-war times.  Far riskier than a Chunnel; Concorde; electrification of the railways; or a Severn Bridge – it’s like trying to do a hundred of those projects, all at the same time, all within three months.  Sound daunting?

At Clifford/ Style we seek to assist with specific and rapid ‘state-of-readiness auditing’ for SMEs who are caught up in this challenge.

There will be continuing anxious debate on what the result actually revealed about the views of the population at the time of the vote but like the genie in Arabian Nights – it cannot be put back in the bottle.

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