What's the solution to this Brexit mess?

Author
Matt Griffith
Director of Policy | Business West
11th February 2019

If you thought things in Parliament were bad, pity the people whose livelihoods will depend on the decisions made by MPs over the coming weeks. Take back control? If only. 

Somewhere beyond the fog of Westminster lies someone who has to deal with the consequences. The ‘real world’ of factories, offices and farms. 

We’ve been speaking to many, often small, sometimes family, firms, all struggling to get to grips with that happens next

In the past couple of months the tone and urgency of company enquiries has got much sharper – it is now urgent and concerned. The prospect of “No Deal” has moved from being an abstract scenario, to being a concrete date in the diary. 

The day before the Prime Minister’s Brexit deal was voted down, I was talking to the owner of one local small manufacturer who sell their products to European manufacturers. Like me, they are completely baffled by what is happening in Westminster. But he is heading to Holland this week to try and secure warehousing, so that he can still get product to key customers if a No Deal happens. 

Yesterday I was talking to a clothing company. They have a quarter of a million pound cargo of shoes due to be shipped from China for sale in the UK and Europe. Should they tell the ship’s captain to sail to Southampton or Rotterdam? If there is a No Deal, they risk having to pay a 16.9% tariff twice. 

Another company is due to start laying off staff as they move a large part of their operations from the west country to warehousing and offices in Germany and Romania. 

To many business observers, the political management of Brexit appears to have been designed to maximise the erosion of confidence.

We were meant to have a deal in place by March 2018, which then shifted to July, then October, which became late November. We were meant to have a parliamentary vote well before Christmas, it is now mid January. No Deal was meant to be off the table, but it is fast becoming the default outcome.

The longer this goes on, the more business loses confidence: in the ability of the PM to deliver a deal; in ability of parliament to avoid a No Deal.

This is serious – confidence is everything in businesses, and we are taking big risks if we start undermining it. 

Make no mistake: if someone says No Deal is not a problem, they don’t know what they are talking about. 

We know medical products companies, chemical companies, aerospace companies who would legally not be able to sell their products into Europe on March 30th. Their certificates would not be recognised as legally valid. Our aerospace sector and automotive sectors would be badly damaged. Food and Drink would face crippling tariffs. Profit margins would be wiped out, cash flow would become highly stressed.

No serious politician should be contemplating this outcome.

Businesses are tired of political games and party factions. This is the biggest decision of our lifetimes. We need to see decisions made across parties in the national interest and we need to start making pragmatic compromises. 

Too much of the current political debate is based on fantasy outcomes and posturing. In the real world, this isn’t good enough.

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