Preparing for Brexit

Jan 25, 2019

In preparation of Brexit, Charlie looks at how we can start to identify areas of exposure within our organisation.

I imagine a lot of us haven’t yet prepared for Brexit, and our organisations have continued on quite happily doing what they do. The problem is what to prepare for, as there seems to be a different flavour of Brexit every day. Are we heading towards a Canada-plus, a Customs Union, a Norway deal (plus or minus), no deal or the Prime Minister’s plan A – she doesn’t really seem to have a plan B. Secondly, the direction we are going in seems to change every couple of days. We were strongly heading towards no deal and now (24 January 2019, 8.00pm), according to the news, the no deal Brexit destination seems to be less likely. Who knows what tomorrow and next week will bring.

For many of us, myself included, there have been so many different permutations that it is difficult to know where to start, and it is very difficult to know what to prepare for. I personally give you a call to arms, if you have not done so already, as a minimum, look at your organisation’s exposure to Brexit and see where you are vulnerable. Putting off doing something about Brexit reminds me very much of the time, about three weeks before my first daughter Amy was born, when the midwife asked if we had bought anything for the fast approaching baby. At that point we had done nothing, slightly out of superstition and not wanting to buy anything too early, but mainly out of denial! The midwife told us in no uncertain terms to go out and buy at least nappies, a baby grow and a car seat, the minimum essentials for a newborn. For those who have not done anything yet, on Brexit, now is the time.

I have been asked to run a Brexit preparation workshop in a couple of weeks, for a Local Authority in Scotland. In reading through their preparations, I was surprised by the amount of detailed planning they had already done. They showed me a first draft of their preparation before Christmas and since then the work and identification of the risks, have become a lot more substantial and there seems to be a lot more urgency in the work. This is also becoming apparent in the information we are starting to hear on the news. Yesterday, a lady on the news was saying that her cross channel ferry time had been changed by the company due to extra Brexit ferries, I suspect instances like this are a result of work going on in the background which most of us don’t really see. So enough of the problem, what is the solution?

The main thing, if nothing else, should be to look at your organisation’s exposure to Brexit. I always recommend a framework, so I like the government’s advice of looking at the following:

1. Customers – where do you sell your goods or provide your services?
2. Competitors – is Brexit an opportunity? As it will prevent competition from European organisations or will your competitors be fighting over a smaller pool of customers in the UK.
3. Staff – are your staff EU nationals and could they possibly return home? Might you find it more difficult to recruit new staff, as currently there is very low unemployment, and there may be no new migrants coming into the country from the EU to fill some of the gaps.
4. Suppliers – where do your suppliers come from and does your supply chain include European countries? You need to think about tier two and three suppliers. If there are scarcities, will the price of goods go up?
5. Funding/Investment – do you or your customers get grants from the EU or are they funded through EU companies? What is your exposure to and requirement for new funds?
6. Regulations – you presumably comply with European regulation at the moment. How nimble are you, to adapt to changing regulations? If we make trade deals with non-EU countries, might they have lower regulations than us and could they flood the market, undercutting your higher standard goods. If you are only used to sending your goods within the EU with no customs, then do you have the software, procedures and knowledge to export under World Trade Organisation rules?

You also have to think through the effect on your staff and the country in general. This is a little more difficult to predict, but if there are shortages, people may spend their time queuing for scarce goods, and if there is unrest, this may affect your organisation and business model.

Once you have established your exposure to the EU, then you can start to apply whatever scenario you want and decide how it will affect your organisation. If you want to go a little deeper and model the effects of what might happen, take a look at the government’s Brexit planning assumptions. They will give you some idea of what might happen and what you should be planning for, at least for a no deal Brexit. If you take them at face value, this will at least give you a starting point and prevent you spending lots of time and energy arguing internally about what event you should plan for.

There are lots of government websites out there which can help you with your planning. The one I particularly liked was the Scottish Enterprise site:

If you know of any good sites, please email me or BCT and we will make them available to bulletin readers. So, you have heard the call and if you haven’t done so already, go out and prepare for Brexit!

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