Chapter 12
IN THIS CHAPTER
Highlighting as-yet unresolved issues
Staying up to date on the latest developments
Accessing useful resources
Brexit is a complicated subject that’s constantly evolving. Some issues are simply unresolved or unclear at the time of writing this book; others, such as trade, are subject to ongoing negotiations. Brexit is a bit like playing whack-a-mole in that sense — one uncertainty gets resolved or one hurdle is cleared (whack!), and another one pops up immediately to take its place.
In this chapter, I suggest key topics that you may want to keep an eye on (while steering clear of the obvious questions on everyone’s lips, such as “When will Brexit happen?” or even “Will Brexit happen?”). Some topics, such as Scottish independence, have wider implications for the UK as a whole, while others, such as workforce pressures, may directly impact your business over time. (No doubt, you’ll care more about some of these issues than others, and that’s fine. As with the rest of the chapters in this book, focus on what’s most relevant to you.) Finally, at the end of the chapter, I list some useful sources that will help you to stay up to date.
The Brexit withdrawal deal allows for a transition period (see Chapter 3), where certain things, like trade arrangements and the UK abiding by EU rules, will continue unchanged until December 2020, or whenever the transition period is set to end.
Those in favor of extending the transition period say it’ll give the UK more time to negotiate a trade deal with the EU. Most experts agree that December 2020 doesn’t give nearly enough time to negotiate a trade deal. (As an example, Canada’s trade agreement with the EU took seven years!)
Meanwhile, those against an extension are unhappy at the idea of being hitched to the EU for any longer than necessary. They’d much rather take a “rip off the Band-Aid” approach.
We don’t yet know how the UK will trade with Europe and the rest of the world after it leaves the EU. What sort of barriers will there be to moving goods across borders? What tariffs will apply? The answer, for now, is anyone’s guess.
What about trading with countries outside the EU after Brexit, after we’re no longer covered by the EU’s trade deals with those countries? For one thing, any new non-EU trade deals won’t come into force until after the transition period has ended (we can negotiate and sign deals with countries during the transition period, but those deals won’t apply until after the transition period).
Meanwhile, many Brexit supporters point to the Commonwealth as a bright prospect in the UK’s future trade relationships, which makes sense given the close bond the UK has with its Commonwealth partners. Yet, some of the same quality concerns may apply (for example, Australian beef is treated with hormones that are currently banned in the EU), and the EU is, for now, a much bigger export customer for UK businesses than the Commonwealth is.
All in all, expect trade negotiations to have more twists and turns than Game of Thrones! It’ll certainly be interesting to see how all this plays out over the next few years.
I’ve written already about the issues surrounding the potential “hard border” between Northern Ireland and the Republic of Ireland (see Chapter 3). I don’t want to repeat what I said earlier, but it’s worth mentioning the Irish border and backstop as a key issue to keep an eye on.
In 2014, Scotland held a referendum to decide whether Scotland should leave the UK and become an independent country. After what was a record turnout for a UK election, the result was a pretty confident “no,” with 55.3 percent of voters opting to remain part of the UK.
Then the UK as a whole voted to leave the EU in 2016, even though Scottish voters were overwhelmingly in favor of staying in the EU.
In March 2017, Scottish First Minister Nicola Sturgeon formally announced she would seek approval for a second Scottish referendum. The Scottish government approved this request, but the UK government chose not to respond. In fact, at the time of writing, the UK government still hadn’t formally responded. It’s probably on someone’s to-do list somewhere… .
Whether calls for a second referendum get louder or quietly disappear remains to be seen. But if there is a second referendum, and Scotland chooses independence, will Wales follow suit? And what will it mean for those in favor of unification between Ireland and Northern Ireland?
Assuming the UK exits the EU with a withdrawal agreement (see Chapter 3), the UK plans to keep EU laws during the transition period. Quite how much the UK will be able to change its laws after that isn’t yet clear — much will depend on the international agreements we make with the EU and potentially other trade partners. Even if the UK ultimately decided to repeal and completely change all inherited EU laws (which is unlikely — just think of all the paperwork involved!), UK businesses wanting to trade in the EU would likely still have to comply broadly with certain EU laws.
But one thing is clear: having withdrawn from the EU, the UK (and not Brussels) will be responsible for setting its own laws. But where in the UK will those laws be made? After all, Scotland, Wales, and Northern Ireland have their own devolved parliaments.
So, when the UK “takes back control of its laws,” where does that control go to? In the first instance, all powers will come back to Westminster, and some will be devolved from there. But, to avoid disruption to the UK’s own internal market, Westminster will want to see a UK-wide approach taken on certain areas (which may include devolved matters like agriculture and fishing).
In other words, whether Brexit leads to greater devolution of power (as some in the Scottish Vote Leave camp had speculated) or ends up restricting certain powers remains to be seen.
In February 2019, it was reported that the Netherlands was talking to 250 companies about switching their operations from the UK to the Netherlands, and the Dutch government boasted that it had already tempted more than 40 businesses or branch offices away from the UK.
Whether your company is better off in Amsterdam or Aberdeen is something only you can answer. But assuming you’re opting to stay put, be aware of trends within your industry pulling businesses out of the UK and into the EU. Their leaving could provide an opportunity to increase your market share and grab some of their customers (see Chapter 10).
Many commentators felt that the popularity of the UK Independence Party (UKIP) wasn’t just about a desire to pull out of the EU, but also a desire to give the middle finger to the mainstream establishment — a system that’s seen British politics dominated (for the most part, at least) by two parties for centuries. The same could be said of Donald Trump being elected president in the United States — many voters responded positively to the fact that he wasn’t a politician.
I’d love to say things have improved since the Brexit vote, that voters feel better having gotten their dislike of politicians off their chests. But that’s not the sense I get. Thanks to all the political wrangling behind the withdrawal deal process (see Chapter 3), many in the UK find themselves rolling their eyes at shenanigans in Westminster. The inability of both main parties to find common ground and work together to create the best outcome disgusts many of the people I talk to. Plenty, on both sides of the Brexit debate, feel that politicians just aren’t acting in the interests of the country.
Will our wider political landscape change quite dramatically over the next few years? It’ll be very interesting to see what happens at the next general election (scheduled for May 2022, but it could happen much sooner) — an election that may still be dominated by the Brexit fallout, whether we like it or not. And, of course, if the ruling party changes, that will mean a change in policies, which will further affect businesses… .
Across the public and private sectors, there has been a lot of speculation about how Brexit will affect access to labor. Without wanting to repeat what I cover in Chapter 7 (which is all about employment and access to labor), this will be a key ongoing issue for many UK businesses.
The National Health Service (NHS) alone has around 63,000 employees from the EU, which accounts for 5 percent of the total NHS workforce. In the private sector, care homes and farming are also heavily reliant on overseas labor.
Circle back to Chapter 7 and use the checklists in Chapter 9 to assess potential staffing impacts on your business, and be sure to keep up to date on the latest immigration policy after Brexit.
We all know that worldwide currencies and stock markets are more volatile in times of political and economic uncertainty. The pound has certainly had a bouncy couple of years since the Brexit vote.
But it’s not just the value of the pound that fluctuates. Stock markets and property markets are typically volatile when there’s political and economic uncertainty.
This volatility affects businesses in all sorts of ways, such as:
In addition to your regular news source, you may also want to regularly check the latest Brexit information from the following resources:
www.gov.uk/government/organisations/department-for-exiting-the-european-union
): Known by the snappy acronym DExEU, this is the government department responsible for overseeing Brexit negotiations.www.cbi.org.uk/business-issues/brexit-and-eu-negotiations
): Representing 190,000 businesses across the UK, the CBI has a thorough handle on what Brexit means for companies.www.britishchambers.org.uk/page/brexit
): The BCC has lots of practical advice for companies and thoughtful analyses of Brexit developments.www.fsb.org.uk/standing-up-for-you/brexit/introduction
): FSB is a great resource for small businesses and people who are self-employed.