16 June 2017 category: strategy & business planning
Brexit just got tougher – for now!
The results of the UK general election have temporarily thrown the imminent Brexit negotiations into disarray. The Prime Minister needs to form a pact with the Democratic Unionist party before entering Brexit talks and her mandate will be shaky for a while. The timetable may also need to be adjusted by a week or two.
All we are going to get in the short term - as citizens and business people - is negativity.
Politicians are doing what they like to do best; retreating to their respective tribes and scoring points off each other.
Negativity is also emanating from the Press who are doing what they like to do best, which is asking questions that cannot possibly be answered, like "what will “Brexit” look like?" It is an unanswerable question because Brexit will be a large number of separate agreements on a wide variety of issues and until discussions have commenced between all 28 countries it is impossible to see what the outcome will be. The question is no more relevant than asking what the regulation to be imposed by the EU will “look like” in the next five years. The Press wish to ask such questions because it makes it look as though they have uncovered something controversial and unacceptable, whereas it is merely a natural course of events.
We have to remind ourselves that the Press make most of their money by printing controversial headlines and bad news. A headline saying, “There is a good chance that the UK will come to a reasonable Brexit settlement in due course”, would not be attractive to editors and will probably sell no papers or raise online advertising revenue. It is, however, the most likely outcome of negotiations.
The need for confidence
Confidence is an important commodity for people in business (and the customers that buy their goods and services). A frenzy of negativity from the Press and Politicians does not do anything to support the Brexit process, improve the economy or help businesses or the public in general. We therefore have to take responsibility and think for ourselves.
So, behind all the noise, what might happen with Brexit?
- The election campaign and press coverage has made it look as though the Prime Minister will personally negotiate everything. This will not happen. The detail is too great and it will be dealt with by an army of civil servants and consultants, with cameo appearances by ministers.
- We are led to think that the EU will want to "punish" the UK by cutting trade with us. We should therefore remember that we trade with citizens and companies in the EU who freely decide to trade with us and vice versa. The main change that the EU can impose is tariffs. If they were to overdo this and the UK were reciprocal then larger exporters to the UK such as French wine producers and German car manufacturers would do the U.K.'s negotiating for us as their losses would be enormous.
- 92% of businesses in the UK do not trade with EU countries at all. The 8% of companies that do so account for 12% of GDP in their trade with the EU.
- The way that most legislative, financial and legal transactions work is as follows:
- A task force will be created to deal with the overall Brexit position
- They will produce a list of issues that might be considered (such as border controls, security services cooperation and extradition treaties etc.) There are likely to be up to 800 issues to be dealt with.
- Teams will be appointed in every government department to deal with the appropriate items on the issues list.
- They will link up with professional advisers, their opposite numbers in other countries and a list of consultative bodies.
- During negotiations on individual issues, the first thing they will do is to find points on which they can all agree.
- They will then work on points on which they do not agree to try to narrow the differences.
- They will then bring outstanding issues to the politicians to make a deal.
Why should we keep our confidence high?
There are a number of reasons to ensure that people do not talk down the economy, overestimate the problems, fail to grasp opportunities or generally create a self-fulfilling gloomy prophecy. Business confidence has a number of benefits:
- It is good for the business.
- It is good for the economy.
- Every business still has 200 countries with which they can trade, including the 27 remaining EU countries.
- Most successful companies seem to be relatively untroubled by economic and political instability because they set about ways to get around it.
- Forced change can often “kick-start businesses to raise their sights and achieve greater things.
- Most businesses are nowhere near fulfilling their potential, so there is a lot of scope for improvement, most of which will affect the bottom line positively.
Practical step you can take to eliminate uncertainty and fulfil the potential of your business
If you would like to find out more about practical steps that you can take to enhance your business, lift your business confidence and fulfil your potential, we recommend that you take the first small step immediately.
Take five minutes now and change your business for the better
Click on the following link, answer 20 simple questions and you will receive a confidential report, giving you a clear idea of what you can do to improve your business dramatically.