Time for a reset on Brexit as Boris takes command
Our new Prime Minster has arrived on the political main stage with a bang. A newly-minted Cabinet, with many fresh policy announcements. A spirit of ambition. For business, there’s plenty to applaud – pledges to transform connectivity and create an immigration system based on need, not numbers. Early signals that will help lift business confidence.
But there’s also a daunting new reality on Brexit. Leaving without a deal on October 31 has become a serious possibility. That will land Wales with a colossal bill of £7bn in lost growth. At the CBI we could not have been clearer – nodeal will damage our economy, no matter how much we prepare. Our view has not changed.
But we are also pragmatists. We have been preparing our members for the possibility of no-deal for many months. Now is the time to shift on to an emergency footing.
While it’s not possible to seal our economy from all the damage the floodwaters of no-deal will cause, we can lay down some sandbags.
The CBI recently published a comprehensive review of the existing nodeal plans of the UK Government, European Commission, member states and firms. This shows, beyond doubt, that no-one is ready, neither Wales nor the EU. There is no one area of the economy where it could legitimately be said that the UK, EU and businesses are fully prepared. And, contrary to some claims, the EU is behind the UK in its plans to prevent the worst effects.
With just over three months to go, there’s a mountain to climb and no time to waste. Of 27 key areas of the economy, disruption is likely in at least 24 of them immediately after October 31. In some sectors, such as banking, preparation is in decent shape. For others, from haulage and agriculture to manufacturing and chemicals, there’s a great deal more the Government, and firms, must do.
The CBI has set out more than 200 recommendations for action. For the Government, it shows that good work has been carried out in prioritising short-term stability and temporary measures, such as its approach to licences for regulated EU goods imports. But now old technical notices need updating. Working with the Welsh Government, a business-facing campaign should be launched as soon as possible, focused on the thousands of hardto-reach smaller businesses across Wales, who need the most help to prepare. A large number can never be ready – they lack the resources to meet the cost and complexity of such an undertaking – but anything that can be fixed, must be.
For the EU, it means at least matching the UK’s sensible temporary mitigations in a range of areas. They must look at further potential temporary standstills and extensions of emergency measures, especially around borders and data flows. They should also bring forward the ability for UK firms to apply for essential licences as a third country before the UK leaves.
For those businesses that are able, it means they should immediately resume their no-deal preparations, costly as they may be, and engage with the new wave of government communications. Perhaps most importantly, in the event of no deal businesses can prioritise their people. Being in a position to reach out and reassure their employees quickly is their priority.
Two stark messages stand out. The first is to get on with the work. The second is to get back to the negotiating table so that this wasteful and complex process becomes redundant. The EU’s preparations lag the UK’s, so it’s in their interest as much as ours to use the dynamic of a new Prime Minister to reset the approach. Business desperately hopes both sides will dedicate as much blood, sweat and tears to agreeing a deal as they do to preparing for failure.
Even with the best preparation in the world, the shock of no-deal can only be reduced, not removed. It’s a shock that will reverberate for years to come. But prepare we must.
■ Ian Price is director of CBI Wales