Commentators have lost interest in deriding the UK’s attempts to line up non-EU trade deals, and begun to focus on the potential chaos for exporting businesses. But while it’s going to be tricky short term, businesses will triumph, even in a no-deal Brexit.
Brexit is interesting on a number of levels, not least the way it has demonstrated the media’s lack of understanding of the culture and attitudes of British business; and their ability to cope. Some more vocal exporters including economist and Labour-donor John Mills of JML and Anthony Bamford of JCB remain relaxed about Brexit, and I suspect they represent a sizable contingent of business owners.
But why, if the prospects are as dire as the commentators predict, aren’t more businesses up in arms at this late stage? Why are most trade bodies getting quieter, rather than increasing in volume? I think this goes to the heart of the UK business culture.
British businesses are problem solvers and they have the measure of Brexit
First, of course, it’s worth remembering that only about 10% of UK businesses engage in any form of exporting at all, so almost all of them don’t. However, this does not give the full picture.
According to the ONS if you add in importing, this figure rises to 14.3% and, in fact, more than 50% of Britain’s largest businesses do trade internationally, and they make up half of all private sector turnover. So a no-deal Brexit will hit big business disproportionately, and it will hit GDP and our financial system hard, of that there can be little doubt.
But British businesses are problem solvers. And this is likely to become more apparent the closer we get to Brexit. Just last week there was hint of this changing tone when the Governor of the Bank of England, Mark Carney, was interviewed on the Radio 4 Today programme.
Despite being invited to go full ‘Project Fear’, Mr Carney remained both balanced and candid. He said that “we are absolutely confident” that banks and financial institutions, the core of the UK’s financial system, are ready for a no-deal Brexit, and that our retail and supermarket sector is the “most competitive, efficient and impressive in the world, so if anyone can address [preparedness], they can”.
But what was most interesting was how he tackled the allegation that leaving the Bank of England’s no-deal economic forecasts until September to be published was too late.
In response, Mr Carney said: “you can get a lot done” before then, and went on to say that 75% of the 10,000 businesses they survey are currently “as ready as they can be” for a no-deal Brexit, and a further 10% are ready for Brexit with a deal. They have secured alternative suppliers, stockpiled and leased extra warehousing capacity. If you follow the logic of this, it clearly indicates that all but a few British businesses will be totally ready for all the challenges they can predict by 31st October.
UK businesses solve problems, they move at pace when faced with a hard deadline, and they have, I suspect already solved most, if not all, of the challenges possible within their remit.
They’re battle-hardened and not easy to scare
It’s also worth remembering that UK businesses had a taste of turmoil just after the EU Referendum when the pound fell sharply and there was zero information about what they should do next. Looking back, it must have been a horrendous time for UK companies. Their EU-national employees were devastated and very worried, many left over the coming months.
Suddenly, overnight, with no warning – thanks to the fact that the government had never countenanced a Leave victory and had therefore done zero planning – the pound tanked and business import costs rocketed. It must have seemed for many as bad as the crash in 2008.
But here’s the thing – they lived through that. The ones that survived have learnt huge and valuable lessons; and the ones founded in the years since have been born into Brexit – they know the score. The vast majority will be taking no chances this time; they will be prepared, of that I’m certain.
But could the government do more? Of course – and they must, fast.
There are still huge questions surrounding the numbers of customers officers needed in order to avoid the M20 at Dover turning into a lorry park, and, as the Road Haulage Association suggested, drivers waiting in queues for 48 hours with no food or toilet facilities. And there are still debates raging on social media as to whether the government’s advice surrounding Economic Operators Registration and Identification (EORI) numbers is accurate. It had better be.
In any event, the government absolutely must step up to the plate. The majority of British businesses have done all they can to ensure they’re ready for a no-deal Brexit. The government has one job between now and the 31st October, and that’s to ensure they’ve played their part to make a no-deal Brexit work for UK businesses. If they don’t, you can bet that they’ll be punished at the ballot box shortly after.