Oh, it’s all so confusing. These darned Brexit negotiations, set to run and run. But sadly, we don’t have the luxury of time and we are not much clearer as to where the UK will end up after seemingly months of talks.
The CBI, for one, has had enough of this bluster. CBI President Paul Dreschler has declared that the ‘soap opera’ of Brexit negotiations is doing serious damage to Britain’s economy. “At the moment, I’m reminded of a prime-time soap opera, with a different episode each week. First Lancaster House, then Article 50, the European Council, two dinners with Juncker – and no doubt many exciting instalments to follow,” he said. Know what? I wholeheartedly agree. What a mess.
At the lobby group’s annual conference this week, he will call on Theresa May to articulate a ‘single, clear strategy’ for the approach to leaving the EU. This new approach is needed to protect the UK’s economy, he will say. This follows research conducted by the CBI showing that 60% of companies will trigger contingency plans if a transitional plan has not been agreed by March 2018. Bosses say time is running out to seal a transition deal. The research also suggests 10% of companies have already begun to move staff or cut investment in response to uncertainty. A further 24% said they would follow suit by end-January if a deal has not been agreed.
Speaking at the weekend, Mr Drechsler said: “We were the fastest-growing economy in the G7. Where are we now? We have gone from the top to the bottom of the league. It isn’t down to Brexit per se, it’s the uncertainty about the future. If every politician is allowed to articulate a different point of view, it doesn’t help. Companies are really struggling because they can’t figure out what the plan is. If you don’t know, you have to assume the worst.”
Ah, there it is. That word that no business wants to hear: uncertainty. It is a key factor in undermining business confidence and future investment. In my mind, uncertainty more than anything else affects productivity and hence economic growth.
Mark Carney, governor of the Bank of England, has also warned that the economy will suffer unless businesses get a Brexit transition deal to a new trading relationship with the EU. He told an audience at the launch of the Bank’s inflation report that almost half of UK companies are affected by Brexit – a quarter of them materially.
Worryingly, the survey of CBI members suggests that 13% of companies have yet to discuss Brexit at board level; those firms ‘need to roll up their sleeves’, the CBI said. Smaller businesses, the research found, are ‘struggling’ and are less prepared than larger firms. But being prepared is so much easier if you know exactly what you are preparing for – so how long can they wait for this? Must they just go into a holding pattern and sit on their hands? This really is not doing these businesses any good.
The lobby group warned that the ‘clock is ticking’, with Brexit 508 days away. That puts things into perspective and it’s a frightening thought. We need clarity now. No more uncertainty, please. As Mr Drechsler warned: “Once we make decisions in the board room, those decisions will not be reversible.”
Sage words indeed.