21 days to go: What now?
For nine long months I’ve been speaking to businesses about Brexit.
We’ve tried to guide businesses through the potential commercial landmines that await their next steps.
We’ve tried to simplify this mind-boggling process down to two words: contracts and compliance. If you deal with these two things you can brexitproof your business. Landmines avoided.
But, as we all know, most businesses have been agonising about whether they should spend any money at all to prepare for Brexit. The Black Country Chamber of Commerce reveals that fewer than 20% of their region’s 36,000 companies have a plan. The same is true for only 4% of farmers say Knight Frank.
The on-off, will-we-won’t-we political see-saw has turned everybody off. The public are lost in a storm of new jargon and incomprehensible problems. Business, unsupported either financially or practically by government, has chosen to carry on regardless. Entrepreneurial optimism – boosted by the pound’s 18% devaluation – means that stockpiling before Brexit deadlines has pretty much been the sum total of preparation.
But now the chances of getting a Brexit deal are evaporating. The warning signs on the M54 and M6 urge freight traffic to check their papers as “rules may change” at the turn of November. Adverts on getting ready for Brexit send listeners to complex websites with few solutions.
This month, I shall be speaking all over the region to rooms of anxious businesspeople. What will I tell them?
Is the dreaded no-deal going to happen on Halloween?
That is the good news.
Firstly, by October 19th the UK will have sought an extension. This might be delayed by the government refusing and contesting the validity of the Benn Act (which requires the PM to seek an extension) but not for long.
Secondly, by October 19th – and especially if the PM denounces the Benn Act – a vote of no confidence may usher in either a minority Labour government or a government of national unity. If this is to happen, the opposition better have the numbers and quickly. Because, if they haven’t, the PM can squat in No10 for 14 days before calling a general election. By then, Britain will have left the EU by automatic operation of law on October 31st.
Thirdly, and alternatively, a successful extension request would satisfy Jeremy Corbyn’s pre-condition for agreeing a general election. We would have the required 2/3 MP majority to dissolve Parliament under the Fixed Term Parliament Act and an election would happen in late November or early December.
There are two issues here. How long an extension will the EU give to the UK? Do the opposition parties want an early general election?
If the EU grant a long extension (a year has been mooted) there will be enough time for a referendum. This would encourage opposition parties to seize power, organise a referendum first and hold a general election once that result is concluded. However, a long extension is more likely than a pro-referendum government remaining united for long.
So an early election is more likely because the PM is obliged to seek an extension only to January 31stat the earliest. If granted, this would not be adequate for a referendum and thus we will be heading to a general election first. This is a massive risk for Labour and the LibDems. And for business. Because for non-Tory politicians and businesses, opinion polls are as anaemic as economic growth. An election now could mean that they have jumped out of a Halloween frying pan only to be landing in the Brexit fire again by Christmas. Why?
Because any 2019 general election will be the fiercest in living memory. Boris Johnson – who, if deposed, will by this time be leader of the opposition – seeks a return to power by blitzing the country with Trumpian bravado. He knows he needs no more than 35% to win an election against divided Labour and Lib Dem parties. Weaponising the extension “betrayal” narrative in order to solidify the pro-leave voting community might well work. The trouble is that the Conservatives will have to advocate no-deal to win. If they do, a triumphant Johnson will almost certainly pull the rug on Britain’s membership of the European Union in his first executive action. The M54 signs will, this time, really mean what they say.
Of course, the election might result in another hung parliament. In this event we should all get ready – not for Brexit – but for another referendum in summer/autumn 2020. Whereupon the business community will have to continue worrying whether or not to really plan for the no deal they might have so recently avoided.
So by New Year’s Day – four long years after the June 23rd 2016 vote – the Brexit saga will either have ended in the blink of an eye or be reaching its climax in a new and probably even more divisive referendum.
Either way, while the businesses I speak to today believe that the UK will still be in the EU on November 1st, I warn them that this will only be the calm before the next storm. This crisis is reaching its climax. Historic questions of high power and big money are at stake. Those at the top who crave their Brexit will not give up without a fight.
It pays now to be prepared.
Peter is part of a team of stellar experts who can help make sure your business is as prepared for Brexit as possible. If you would like to speak to a Brexit Advisor, please contact email@example.com or on 01694 724440.