Brexit

Brexit
By Alex Davies - Research Analyst
Politics, like Economics, is all about trade-offs. In all areas of policy, there is general agreement as to the broad objectives, but enormous differences of opinion in how we can move from our current position towards these ends; more specifically, there is disagreement about how the trade-offs should be managed. It is because there are different routes to any desired outcome and any number of trade-offs included in the process of getting there that organisations like ourselves overwhelmingly call for pragmatism rather than any particular policy. Politics often gets in the way of this approach, as we see time and time again with those from the left or from the right choosing to support or oppose a particular policy based on who proposes it rather than the trade-offs it addresses.
 
This is how things usually work, anyway, but Brexit is making things a little more complicated this election. We have broad agreement on some things – trade for example. Nobody wants us to export less, and as far as I know everybody would like us to trade with everyone else on the best possible terms. Even so, we have disagreements on the route we should take and how the trade-offs should be played – do we try for a new arrangement, sever ties and rebuild, or stay in the single market at least for the time being? Then we have an issue like immigration, where neither the public nor political spectrum has agreement on the desired outcomes or the means to achieve them.
 
The businesses we represent understand trade-offs and have to deal with them every day. Businesses are pragmatic by nature, having to regularly deal with constantly shifting conditions in order to survive. What businesses really don’t like is surprises. Any obstacle is surmountable if there has been adequate time to assess and plan effectively. This is why when it comes to Brexit, businesses prioritise stability over all else; a new world is acceptable if it can be seen from a distance and if the old one isn’t blown up in the meantime.
 
Alas, with a beast as complex as Brexit, and going into prolonged negotiations with another 27 countries, the communications between political parties and the business world is perhaps not conducive to the stable environment that business craves. Parties differ on everything from the final destination, to how long we should take to get there, to whether we should be prepared to walk into the unknown. To be frank, they are signalling in an effort to keep their options open. All we ask is that when down to the details, pragmatism in the name of stability reigns supreme.
 
If we are going to leave the single market, let’s make sure we can hold on to as many of the benefits it has delivered as possible before doing so. If we can’t do that, let’s make sure that businesses understand the changes and have time to adapt. Let’s make sure that those businesses currently taking advantage of trade deals can continue to do so before we try to make any new ones. If we can’t do that, let’s take time to reassess the trade-offs and see what the options are. Let’s not be tied down to any particular strategy or destination, and give businesses the signals they need to accommodate whatever change may come.
 
The final destination is still up for debate, but the new government should do its utmost to make sure that the path there is as smooth as it needs to be to maintain a stable environment for business.  A sudden shift of environment in exchange for the promise of a long-term gain does not work for the day-today operations of a company, and many simply cannot survive it. For businesses the downside risk of Brexit really lies in the means, not the ends.

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