Orderly Brexit required: egos need to be parkedMartin Tripp 10th July 2018
For a moment, there was clarity. And then, it was gone.
A few weeks ago, we noted that the challenge for business is not Brexit, but uncertainty. At that time, we called for business leaders to make their positions clear. In due course, the heads of Airbus, BMW, and many other businesses stepped up. To be fair, they were probably responding to the comments by the outgoing head of the CBI, which prompted our blog, rather than to us. But we like to dream.
Let’s be clear: the deal proposed by Theresa May last Friday would have been at best partially good for our clients rather than wholly brilliant. After all, services were excluded from the customs arrangement she had suggested, and our clients are largely in the services sector (digital media, entertainment, SaaS, training, etc). While they may have faced tariffs, depending on later individual trade agreements, this was sweetened by the beginnings of a framework for modified free movement of EU citizens to work, which is critical to their sectors. Meanwhile, the proposal on free movement of physical goods would have kept supply chains and food supplies moving. That is a good balance to strike. The May proposals were a sensible and broadly supportable solution to an intractable conundrum: how do you exit the largest free trade arrangement in the world without killing your economy?
Of course, there was no guarantee that the EU would agree to this set of proposals. But, as the Brexiteers keep saying, the negotiating government needs at least to present a united front to ensure those negotiations stay on course. By resigning, David Davis and Boris Johnson have already torpedoed that sense of consensus.
Worse, though, is what this harbingers. However much the May proposal was a compromise (and any deal will be), the country has experienced more than two years of economic uncertainty based on the referendum result. This followed eight years of lo-yo* performance since the financial crisis of 2008. The UK can ill-afford another few months of no-confidence votes, inconclusive elections, and dithering on the Brexit negotiations. ‘Brexit day’ is due in eight months.
There is an old joke about a stranger, lost, coming across an ancient local, and asking how to get to such-and-such a place. The old man pauses, and says: “well, I wouldn’t start from here…” What the rebel members of the May government and other Brexiteers fail to acknowledge is the forty years of history that has brought us to where we are. To unwind that completely in a short time would be disastrous. Further, to ignore the reality that the complexities of implementing Brexit were hugely underestimated by all parties is disingenuous. None of it is where we would have wanted to start, but it is the reality of where we are.
It is clear that an ideological pursuit of a ‘pure’ Brexit in which business can go hang is no solution to any of the country’s ills. And it should always be remembered that, in losing Boris Johnson, the government has lost an intemperate foreign minister who said “f**k business” when told about the Airbus concerns. That is no loss at all.
The UK economy on all sorts of measures is growing slower than its counterparts in Europe and the US. It will slow even further unless there is unanimity. It needs to put the farce of “Brexit Bulldog” David Davis and the cavalier Boris Johnson behind it, and get on with some realpolitik.
Yes, the May proposal is a fudge. But it did at least appear to be a workable framework towards an orderly Brexit which might provide some clarity for business. It is for now the best option we have, and far better than the chaos that undermining it will bring.
Let’s hope that further acts of bravado by ego-centric politicians will not further undermine an already shaky framework.
*I thought that lo-yo was a recognised economic term, but it seems I made it up. I meant it to refer to an economy which is rising and falling as events change, but consistently performing at the lower end of expectations.
Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work in the TMT (technology, media, and telecoms) space, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.