A seismic shift in the way UK businesses operate in the future is fast approaching, so it is necessary for every organisation to be prepared for multiple scenarios. No business will be left untouched because so many crucial factors are about to be altered, and if our current and future governments do not proceed with extreme intelligence, prudence and guile then Brexit could be every bit as damaging to the UK economy as many experts have predicted all along.
Striking a Balance
To accurately reflect on both the Remaining and the Leaving sides of the argument it must be acknowledged that most of the worst case scenarios surmised have not come to pass, and this should instil hope for the future. Yes, there is much uncertainty clouding the talks between the UK government and Brussels, but on the whole, we have not fallen off any cliff edges as predicted. Yet, anyway.
However, while acknowledging the positive aspects that are possible, it would be prudent to remember that if politicians bungle our exit from the EU then industries such as food manufacturing will almost certainly be hit very hard. This is because it is a sector that relies heavily on low-skilled, manual labourers, and this workforce is heavily supplemented by European economic migrants that have left their own countries to take advantage of the strength of the pound and the buoyancy of the UK economy.
So if the UK wishes to stay in a healthy position, then we as a country cannot afford to allow external factors beyond our control to ruin our labour market or demand for our exports. And this will almost certainly happen if we suddenly prevent or drastically deter the number of migrants that we need in our businesses from coming to the UK, or staying once they are here. It will take a fine balancing act from any government to fully leave the EU, phase out freedom of movement of EU nationals, and still keep the UK attractive as a destination for economic migrants. It would also be very easy for them to ruin negotiations with Brussels and come back empty-handed as we witnessed with PM David Cameron in 2016, prior to the Referendum.
The Immigration Migraine
The emotionally charged issue of immigration is one that can cause all sorts of problems in the future, but it must be realised, even by the staunchest Brexiteers, that the UK cannot rely solely on its own native workforce because there just isn’t the numbers qualified, willing and able to fill the key roles that are necessary, such as is required by the food manufacturing industry. A balance needs to be struck that makes it plain to the foreign workforce that we already have working here that their contribution as members of UK society is valued and will be protected, which has already been vocalised by PM Theresa May. We cannot afford to have the skilled and experienced workforce already residing here leaving en masse. They need to know that their futures and that of their families already living here will be protected after Brexit. Uncontrolled mass immigration is expensive to support, but lack of a useful labour market is just as damaging.
No Deal Dramas
A massive danger, albeit a very unlikely one, is that no deal is reached with Brussels and the UK leaves the EU on the 29th March 2019 with no deal. We pay nothing and we walk away. Then what? It is a farcical notion to believe that trade with the EU will cease. That is impossible because nobody can afford that scenario, and past all the hysterics, the reality is that the European markets need the UK to buy their products or there will be massive turmoil in the European job markets. The UK needs the EU as consumers as well, although we do buy more than we sell, so it could be argued that this falls in our favour. Therefore trade will continue. It is just a matter of how. In the worst case scenario, a trade war could ignite, where each side starts charging the other a 20%+ premium to trade with the other. And this will go on until somebody finally cracks and/or sees sense, which may only happen when somebody gets voted out of office. And nobody in any of the countries involved wants that. This is a stupid policy for both the EU and the UK to pursue as it will only result in more backlash from voters that no country wants or can afford. Common sense says that some form of an amicable deal for both the EU and the UK is the best way forwards.
So it is down to the politicians to make this transition work for all involved. It is no use punishing the UK for being insolent enough to decide its own future via a democratic process. The UK is not in the same position as Ireland, for example, and will almost definitely not be bullied into voting again until the “correct” result is obtained, as was forced upon Ireland twice (Nice Treaty and Lisbon Treaty) and Denmark once before (Maastricht Treaty). If the EU pushes hard enough then the Leavers in government may eventually snap and oust Theresa May, and the last thing the EU wants is a new UK government to deal with, because they may have to deal with someone far less agreeable to their terms than Theresa May.
Will a Corbyn government be better than the current Tory leadership? Some would argue that any government would be better than what we have, and sometimes that is hard to dispute, but is a massive change in leadership really what we need halfway through such a crucial period in the UK’s new transition? Time will tell, but there are certain to be many more unexpected developments that nobody ever dreamed of accounting for in June 2016 when the nation went to that historic poll.
What is the lesson here for business leaders then? Panic and emotional irrationality do nobody any good. But neither does wishful thinking and assuming everything will be alright. Unlike both of the main UK political parties after the Brexit result, organisations should be prepared for the opportunities that will arise, and have multiple strategies good to go. Unexpected threats and challenges will surely raise their heads as well, and if businesses do not examine the cards they are dealt with a curious creativity and work out how to take advantage of any given situation then they will be left behind. Because you can guarantee that at least one of their major competitors will exploit the political and economic climate to their advantage. Challenges and uncertainty always bring about opportunity – it is up to business leaders to stop blaming Brexit for their own failings and take responsibility for the future of their organisations.