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20 Jun 2018

Bracing for Brexit: Getting Ready to See EU Later

Bracing for Brexit: Getting Ready to See EU Later

When first we covered Britain’s separation from the EU in the referendum’s afterglow in 2016, uncertainty ruled. Article 50 hadn’t been triggered, a transition arrangement was speculation and whether we’d remain in the Single Market was up for grabs. Two years on from the fateful vote, can we now speak with clarity on Britain’s future relationship with the EU? Because if it’s one thing the regularity of Brexit in the headlines attests to, it’s that it matters. Brexit is a huge strategic shift – abroad, in Britain’s dealings with the rest of the world, and at home in the way we govern ourselves. The implications are profound, especially for British business and therefore our customers.

Join us as we assess the negotiations’ progress, share what we think the final deal will look like and how that will impact you – your business and its future.

The Brexit to Expect

To us, it’s become increasingly clear that, from the Government’s perspective, Brexit has become an exercise in damage limitation. Rather than seizing opportunities of life outside the EU, a fractured Cabinet, animated by fear of disruption and unable to agree the path ahead, has frequently opted for upholding the status quo. That’s why, although the UK is still on course to leave the EU on 29th March 2019, it’ll be little more than a BRINO – BRexit In Name Only. For years after 29th March 2019, we’ll effectively remain in the EU, in the Single Market, in the Customs Union, in the Common Agricultural Policy, in the Common Fisheries Policy and as a fee-paying member but without representation, in either the Council of Ministers or European Parliament.

A Brexit where Britain regains its sovereignty, emerges from EU structures and organisations, doesn’t fork over an annual membership fee and forges its own free trade deals has become like the horizon – something to which you move towards but never reach.

Confirmation of this is evident in the continual slippage that’s marked Government announcements – a ‘clean’ Brexit, with Britain outside the Single Market and Customs Union, once billed for 29th March 2019, was pushed back to 31st December 2020 with the agreement of a near-two-year transitionary period. A transitionary period initially believed to exclude British membership of the Fisheries policy, changed to include British membership. And continued Customs Union membership, once set to end with the transition period, now looks like it’ll roll on until 2021 at least.

Join the dots, trace out the trajectory, and it looks as though the nearer we approach a deadline, the farther it recedes.

Bracing for Brexit: Getting Ready to See EU Later

Political Realities

We’ve been here before. Politicians often grasp for a narrative, a mission, an imperative that animates all that they do. Most recently, this was closing the budget deficit – but what have you heard of this in recent years? David Cameron’s Coalition veered far off its targets, spent more than Labour under Gordon Brown projected and, without fanfare, stopped talking of austerity because to do so would point to failure. Politicians, for simplicity’s sake, like to assign themselves these overriding objectives, but rarely achieve them – either at all or in full as they originally intended. Events intrude, compromises are made and practicalities erect roadblocks.  

Compounding the problem is the lack of will to implement Brexit. For many Parliamentarians, the referendum result was something like a receding tide with the sea flowing out to reveal unfamiliar land – for MPs, that most of the British public, unlike them, wanted out of the EU. For some this has prompted a rethink, especially for Remainer MPs in Leave constituencies, but this is occurring at different rates for different MPs, and for others who dedicated their careers to deepening the UK’s EU involvement, not at all.

Without belief in or enthusiasm for Britain’s EU exit, the task from the perspective of these politicians will be many times harder – just ask any employee reluctant to do their job. And as the Coalition’s inability to wipe out the deficit suggests, even strong belief in an agenda may not be enough to overcome setbacks.

What does all this mean for business? For you?  

Bracing for Brexit: Getting Ready to See EU LaterBusiness Implications

On present trends, we think Brexit will ultimately have little impact for business. The emerging picture is of a soft Brexit, essentially preserving the status quo, over a timeframe that’s steadily increasing. But that’s assuming the current political situation endures. An early General Election, not generally spoken of right now, but perhaps prompted by a Government defeat on key Brexit legislation before 2022, could upset the dynamic. Because we think a careful reading of the polls suggests there’s not an unrealistic chance that the Conservatives could regain their majority, reduce the influence of their Remainer rebels and pursue a harder line with the EU. Jeremy Corbyn’s appeal is faltering and, as the referendum itself showed, the Leave vote is distributed in such a way as to yield a supermajority of seats for any party that brings them to their side en masse – a play the Conservatives can make with greater credibility.

The more immediate threat to business, we believe, is another downturn unrelated to Brexit. And while when it’ll occur, where it’ll start and how are hard to pinpoint, we believe its chances are surely increasing the longer the current expansion, now almost a decade old, goes on. Rising interest rates, a Chinese slowdown and excessive debt are all excellent candidates for triggering another recession. But it could quite easily be something far off the radar today that comes to prominence tomorrow.

Khaos Control: Clarity in Business

That’s why you need Khaos Control – because we believe that a controlled business is an enabler for growth. Growth you’ll need to survive and thrive whatever the economic climate.

Consider Fizzco. With Khaos Control, they weathered the Great Recession, and tried and tested new business ideas to find the recurring income they needed to grow, taking them from a Portakabin to a warehouse they can’t wait to leave for a bigger one!

Start your Khaos Control journey with a free demo today.

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