Article 50: One year in and one year to go - a very British Brexit.

 London

“Keep calm and carry on” now reflects the mood across the remaining 27 EU countries.  They have discounted the UK’s future net financial contribution and are quietly but effectively moving institutions and decision-making out of Britain.

Meanwhile, in the UK, the detailed scrutiny, analysis and quantification of the impact of Brexit on people, goods, finance and services continues.  As we get into the detail, our understanding of the consequences becomes ever wider and deeper – geographically, politically, financially and socially.

The House of Lords has the constitutional role and responsibility for providing this oversight and scrutiny for the UK – and to report its findings and recommendations to Parliament and the people.  Brexitis a mighty and, arguably, one of their most vital tasksfor decades.

The UK triggered Article 50 – a process that sets in motion a 2-year exit timetable from the EU – exactly a year ago.  Today marks the mid-point.  At 23:00 GMT on 29 March 2019, the UK will exit the European Union.

Vexingly, for all those that have to understand, plan and deal with the myriad of changes needed to cope with Brexit–and with the clock that is ticking down - the terms of the exit are still far from settled.  And the timing isn’t totally certain – whilst a 21 month transition period is on the negotiating table – “nothing is agreed until everything is agreed.”

Every citizen in the UK is affected by Brexit – some more than others.  The Parliamentary investigations and reports address issues that touch everyone such as: issuing new non-EU passports; and what happens to the arrangements for free health care for the British whilst visiting another EU country.  Other subjects are more specific such as: devolution of “repatriated powers for Scotland, Wales and Northern Ireland; the future of border formalities between Northern and Southern Ireland; and the even more severe impacts on the global UK family including Gibraltar, Channel Islands, Falklands, Antigua and the Isle-of-Man.

Every business in the UK is impacted by Brexit – it’s just more direct for some than others.  Any organisation involved with importing or exporting – pretty much the whole of the manufacturing sector - is on tenterhooks waiting to see whether the UK will leave or remain a member of the single market, the customer union – or both.  These represent three vastly different scenarios with impacts ranging from ‘minor’ to ‘life-threatening’according to trade bodies such as British Chambers of Commerce and the Confederation of British Industry.

The indirect impacts are also now being modelled and span such things as: supply chains and logistics; postal services; insurance; export guarantee; raising of finance and loans; grants; type approvals and certificates of origin; use of CE standards and kite-marks; copyright and Trade Marks to protect intellectual capital; employment rights; product guarantees and warranties; position of employees and agents working in the EU; ‘passporting’ of services; prevention of counterfeiting, cyber-crime and smuggling; recognition of professional qualifications; and data protection – to mention just a few.  It is hard to imagine that there is any organisation in the UK private or public sectors that is entirely immune from the impacts of Brexit.

To use an analogy – it feels as if the UK decided to do a ski-jump without knowing exactly what it was signing up for - and hasn’t had any chance to do any training.  Right now, having pushed off in blind faith – it is half-way down the slope and rapidly gaining speed –and informed observers are wondering if they are anywhere near equipped and prepared for the great leap into the unknown.

The ‘mid-term’ reports from trade, professional and advisory bodies consistently show that about one-third of organisations believe that they have done sufficient planning, are tracking the discussions and decisions, and will deal with whichever Brexit scenario emerges.  Another third have done some scenario planning but have not yet begun preparations as they believe that the impacts will be relatively minor for them; and one third have yet to address Brexit – with a significant proportion of this group admitting that the impacts will be significant, but are waiting for certainty from the outcomes of the EU-UK discussions before investing time and resources in ‘contingency’ planning.

The House of Lords completed its marathon ‘line-by-line’ examination (‘Committee Stage’) of the European Union (Withdrawal) Bill on Wednesday 28 March 2018 – travelling far and wide and taking evidence through many sub-committees.  We will focus on the details of their findings and recommendations in a later publication.  What is clear is that there is more to do to prepare Government, the Civil Service - along with the associated regulations and processes - than there is time left to Brexit.  Transition, if it happens, will mitigate this to some extent – but even then does not allow sufficient to do a thorough and constitutionally correct job.

So what should industry and commerce be doing at this stage?  As a minimum, appointing a senior executive to take accountability for Brexit impact analysis, planning and preparations; working towards a worse-case scenario of a ‘hard’ Brexit in a years’ time; and opening up discussions about seizing any opportunities that Brexit may offer – and there are many.

Trade and research bodies – such as the CBI and British Chambers of Commerce – have produced guidelines.  Other bodies, such as local Councils and Economic Forums are actively canvassing for clarity.  Some are encouraging the Government defining negotiating positions and ‘red-lines’.  Academic institutions, such the Centre for Brexit Studies at Birmingham City University, have published insights that add enormously to decisions that need to be taken and acted upon.  What distinguishes the work quoted is that the findings and recommendations transcend the political rhetoric and personal views of the staff and organisations – they are evidence-based facts that need to be understood and upon which hard-nosed business decisions should be taken.

This reflects the values espoused by Brexit-Partners and the organisations that we work with.  We have built an approach - supported by processes and tools - to mitigate the impact and maximise the opportunities arising from Brexit.

We share this knowledge and experience through publications and our website – and you and meet us to discuss at the upcoming ‘Going Global’ event at Excel in London in May.  If that sounds like a ‘plug’ for the work we do – it is.  But comes from a team that has come together to make sure that the ski-jump doesn’t end up in a crash-landing and - whilst there are no promises that it will be elegant – will be a landing that we survive and live to ski away into the future.

http://www.goinggloballive.co.uk/exhibitors/brexit-partners/

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John Shuttleworth is a Partner at Brexit Partners

John ShuttleworthComment