With the Tory leadership contest throwing the outcome of Brexit into further disarray, the new October deadline is fast approaching.However, the CEO of of one of the world’s largest independent financial advisory organisations, deVere Group, believes that the impact of Brexit is far from over, and the Brexit nightmare could go on long after the Halloween deadline.
This week, it emerged that factory shutdowns ahead of the original March 29 Brexit deadline saw UK car production fall by nearly 45% in April, with many other industries feeling the effects of the ongoing Brexit uncertainty.
Nigel Green, the chief executive and founder of deVere Group believes that this is a taste of things to come,as the UK has lost out in terms of innovation and economic growth due to Brexit’s domination of the political landscape. According to Econocom, 38% of UK businesses are delaying investment in new technology due to Brexit:
“It has cost Britain three lost years of opportunity. Brexit has almost entirely overtaken the public sphere in Britain. All of Parliament’s time and energy is vested in Brexit. It appears nothing else is getting done. And so much needs to be done.
“Imagine what amazing social and economic progress could have been achieved if the media, political life and the civil service had been dominated by ‘best in class’ individuals and organisations building an inclusive, long-term, sustainable economic growth strategy for the last three years?
“Imagine if the industries of the future, such as fintech, blockchain and clean energy, had been developed to secure jobs and wealth creators of the next generation?”
The great Brexit escape
He believes that Brexit has meant that a significant number of companies are looking elsewhere, and will continue to do so, with companies such as Panasonic, Sony and Dyson moving their headquarters away from the UK:
“Following years of uncertainty and a lack of leadership from all parties, many companies across the sector have relocated parts of their business or key staff to places like Paris, Luxembourg, Dublin, Frankfurt and Amsterdam, or setting up legal entities in the EU. Once they’ve gone, they are unlikely to return. And this is just one sector.”
According to The Guardian, the pound has hit its lowest level in four months against the US dollar, at less than $1.27, with The National Institute of Economic and Social Research warning that the UK will be £80bn worse off if it leaves the customs union:
“There’s also been the significant drop in the value of the pound. This has contributed to reducing people’s purchasing power. Weaker sterling means imports are more expensive, with rising prices typically being passed on to consumers.
“For the government’s part, the Treasury has allocated £4.2bn towards government departments for Brexit preparations since 2016; the 2017 general election which was held due to Brexit ramifications cost £269m; and let’s not forget, the £39bn “divorce bill” agreed with the EU.”
The cost of Brexit has been substantial, but Green believes that the lack of certainty has also contributed to a drop in confidence in the UK’s financial sector, which he has experienced first-hand.
“Indeed, it has cost the UK economy a staggering £66bn in just under three years, according to S&P Global Ratings. For the government’s part, the Treasury has allocated £4.2bn towards government departments for Brexit preparations since 2016; the 2017 general election which was held due to Brexit ramifications cost £269m; and let’s not forget, the £39bn “divorce bill” agreed with the EU.
“Speaking from experience, the lack of confidence in the UK’s vital financial services sector – which contributes 6.5% to Britain’s GDP – is at an all-time low.”
The deVere CEO concludes: “With so many serious and far-reaching questions hanging ominously unanswered – and more growing each week – Brexit Britain’s Lost Years are not even close to being over.The haemorrhaging of opportunity and money will continue far beyond the deadline.”