The uncertainty surrounding Brexit continues after Prime Minister of the United Kingdom Theresa May decided to suspend the key parliamentary vote on her proposed Brexit Withdrawal Agreement.
With May attempting to address concerns raised by MPs in order to avoid a revolt, and European negotiators refusing to reopen discussions, a potential no-deal Brexit is back on the cards.
Timeline for Brexit
A previous report estimated the cost of a no-deal Brexit for the UK at £80bn annually by 2033. For businesses, additional import costs and customs checks would see the cost of production rise by as much as 15%.
Following suggestions that MPs could be considering plans to trigger a vote of no confidence against May, Verdict asked eight business leaders how they would like to see the Brexit process play out.
Need for clarity
“If Tory MPs trigger a no confidence vote against Theresa May, they are unleashing even more chaos in an already chaotic environment.
“Businesses’ trust in the government and confidence in their ability to deliver a stable and orderly exit from the EU is at an all-time low. At best, a no confidence vote will result in a leadership challenge which will distract the government from its real task ahead.
“The other consequence is the likelihood of a further collapse of the Government resulting a General Election. This would almost certainly result in a Jeremy Corbyn-led administration which would feature a cabinet of MPs who have largely had little experience in the higher echelons of Government.
“Currently, the UK as a whole is between a rock and a very hard place. We have an administration that is limping from one crisis to the next, disrespecting Parliament as it goes. Brexit is seen by most in business as a disaster for the economy. And none of the alternatives is palatable… except Remain.
“Brexit has most definitely had a negative impact on our business. When the result of the Brexit vote was announced, ExtraMile Communications – a multilingual digital marketing agency with a UK and International client base – immediately lost two clients whose businesses were new initiatives that were working across borders and would have been based in the UK, creating employment in the country and therefore contributing to the economy. Both were shelved indefinitely at that point. Secondly, we are finding that both and existing new clients are taking longer to come to decisions about new contracts. We have the impression that they are waiting and seeing before committing, particularly in the case of larger scale projects such as multilingual websites.
“Given that many businesses are in a ‘wait and see’ mode, where they are nervous of the outcomes of the Government’s negotiations with the EU, it’s important to understand that such delay impacts on all aspects of business, whether national or international. Supply chains, access to workforce and the ultimate production of finished goods and services are all impacted when the business community pauses and holds its breath.
“Our preferred outcome would be that we would dearly love to see a return to the status quo before the Brexit vote. This is not said while wearing rose-tinted spectacles. The EU, like any huge organisation, is flawed – quite deeply in many respects. However, simply destroying something which has had so many benefits for our country and economy, or walking away, will not solve anything and will in the short to medium term make our country and its people much poorer. Those who say it’s a price worth paying have not thought through the consequences.
“Being realistic, we are of the view that a second referendum would provide a definitive answer one way or the other, in the light of the emerging facts about the impact of Brexit. May’s deal is the best option, if we have to have this, but it’s deeply unpalatable, nonetheless. We don’t have confidence that a general election will solve anything – the opposition is long on talk, but short on definitive policy. As Carolyn Fairbairn, the Director General of the CBI said today, delaying the vote on the PM’s deal is ‘yet another blow for companies desperate for clarity’.”
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Nick Evans, Chairman of ExtraMile Communications Ltd
“We are undoubtedly in the middle of a chaotic period and if MPs call a vote of no-confidence in Theresa May, then in the short-term things will feel even more turbulent.
“Brexit is a challenge, but I think much of this is due to Brexit uncertainty rather than the specific detail of whichever form Brexit takes. The last business I set up, eShare, was founded in the middle of the recession and we found a way to grow. I believe that if your business is successful, it’s not going to hinge on whether Brexit causes a problem or not.”
“I think the uncertainty over Brexit is worse than anything and any pressure on the economy has been caused by that uncertainty. Once Brexit finally takes place, we have steered our way through the initial period and businesses will be clearer in how things operate, then the economy will gradually settle down.”
Alister Esam, CEO of Process Bliss
“The latest developments in the Brexit process have served to highlight the current chaos that has surrounded it since the results of the referendum in 2016.
“With the pound reaching new lows and growing uncertainty around Theresa May’s withdrawal agreement, the likelihood of MPs triggering a no-confidence vote against the Prime Minister remains high.
“This has been a possibility since Jacob Rees-Mogg issued a vote of no confidence last month following the draft agreement and could become a popular option amongst Brexiteer MPs within her party when voting over the deal recommences.
“A no-confidence motion against May would only delay the Brexit proceedings further and increase the likelihood of a no-deal Brexit.
“With just four months to go to the scheduled date for the UK departure, stability and confidence are essential for investor and business confidence in what is expected to be a difficult time.
“With the Parliamentary vote over the Brexit deal postponed, the pound has continued its decline as Prime Minister May frantically looks to save her Brexit deal. Although European stock markets have been lifted today by the turnaround and recovery overnight in US stocks and some positive sentiment over the US-China trade dispute, Brexit continues to weigh on sentiment, and is likely to influence trading between now and March 2019 when the UK leaves the EU.
“Concerns over the prospect of a no-deal Brexit have increased as the EU continues to insist the Brexit Withdrawal Agreement will not be re-opened. As a result, this is only likely to add to more pressure on the pound.
Mihir Kapadia, CEO of Sun Global Investments
Property in limbo
“The worse case scenario of a no-deal could see homeowners trapped in negative equity and estate agents struggling due to a lack of properties to sell.
“The industry is hopeful that this will be a short-term blow, but it’s expected that the housing market will slow down dramatically in the meantime, as home movers slam the brakes on plans to buy or sell, adopting a wait and see policy.
“On the other hand, if by some miracle Theresa May gets agreements on her current deal, or persuades the EU to agree to amending the deal, then we could see a buoyant property market for all parties in 2019, with a renewed confidence after a very shaky period for the UK as a whole.
“Leaving with a deal could drive the market upwards in the latter part of next year, as strengthened consumer confidence leads to stability – which is what we need in the industry right now, after a prolonged period of uncertainty.
“Although it’s crucial for estate agents and the housing industry to prepare for the worst, the reality of Brexit will hopefully be slightly less dramatic, even if we do reach a no deal situation. The financial crash of 2007/2008 hit our sector hard, and Brexit is predicted to be less harmful for the economy as a whole.
“The concern is that Brexit, whether with a deal or not, will in the short-term at least negatively affect the economy and reduce the Government’s ability to spend. We’ve already seen a huge fundraising drive since the brexit vote, with tax increases hitting groups like landlords. As the Government scrambles to replace lost revenues in the wake of Brexit, the fear is housing will slip further down the priority list.
“Currently, the retrospective, piecemeal approach leaves a lot to be desired and a joined-up, proactive approach from the Government and lenders needs to be adopted, deal or no deal.
“However, with the vote on the deal postponed, and ever-increasing talk of a no confidence vote, the Brexit chaos has left even more uncertainty, putting the property market into a limbo situation that we can ill afford.”
Alexandra Morris, Managing Director at MakeUrMove
Out of touch
“There doesn’t appear to be anyone other than Theresa May trying to do the best for our country against what are proving to be insurmountable odds.
“A tiny majority of the UK people voted to leave the EU based on lies, half-truths and prejudice. Hopefully when Mrs May returns from her trip today she will be able to re-iterate that the rest of Europe has bigger problems on their plate than appeasing an irritation on their northern border. Perhaps then we will all come to our senses and abandon leaving the EU.
“I suspect Labour want to leave it all to the Tories to go back on their word, keep us in the EU and then Labour will hope to get voted in on the back of the mess and pick up the pieces. I am sure they will be happy to make a case for not having another go at leaving the EU.
“In the meantime businesses plan for the worst and hope for the best.
“The continued fall in the pound is going to force up prices and the uncertainty is hampering any investment in the near future. There will continue to be a squeeze on wages in a period of rising prices. Any sort of disorderly Brexit will have a further impact on jobs and wages as the pounds falls further. The complications of finding new markets outside Europe are extreme for most small to medium businesses and striking trade deals will take years.
“Politicians are completely out of touch with reality are only be thinking of their own ends.
“Penny Hydraulics has a plan to cope with whatever may be thrown in its path but it is all unnecessary headache and expense.”
Robin Penny, Managing Director at Penny Hydraulics
“It must be Christmas as the UK’s politicians are currently running a pantomime show!
“Businesses want and need certainty in order to invest in people and machinery. Without a decision being made very soon, politicians will simply create an environment where real business interests are pushed over the edge, and a self-fulfilling prophecy of doom and gloom will come about.
“Our political class needs to stop acting like Widow Twankey and friends and lead this country forward.
We have great dynamic businesses in the UK and they are being thwarted at every turn right now. Unfortunately, I cannot see any politician of any political party having the wherewithal to actually get anything done in a sensible and timely manner.”
Dean Sadler, CEO at TribePad
Confidence or Corbyn
“A lot of businesses have come out in favour of signing May’s deal for the sake of stability, but for me that’s just delaying the exit and disruption. We already have had two years of it and I am not looking forward to another two years of it.
“The only reason I would like a confidence vote on May is in the hope that it will trigger a second referendum, as now we have a deal I believe we should vote on whether to take it or to stay in. Ultimately in every scenario run we are better off staying in – 90%+ of tech leaders want to stay in and a big majority of wider business leaders – and I don’t think those stats will change.
“If I were the betting type, I would put money on a general election being called and Corbyn offering a second vote. He is a wily fish and I think that has been his game all along. However eurosceptic he is, he wants power.
“I would hold my nose and vote for Labour – four years of a left-wing socialist for me is preferable to an irreversible Brexit. Oppositions are never as bad once they are in power.”
Alex Depledge, founder and CEO of Resi
Lack of alternatives
“The political events of recent days have read more like a soap opera than a week in Parliament and the current situation continues to be frustratingly unpredictable.
“One thing that remains clear is that MPs of all parties have absolutely no confidence in Theresa May and her plan for exiting the EU. The fact that the prime minister had to call off Tuesday’s vote on the withdrawal bill due to the lack of support from MPs speaks volumes, and was effectively a vote of no confidence in itself.
“While I might not be May’s biggest fan myself, I would be concerned if there was an actual vote of no confidence because there simply does not seem to be a better alternative in the Conservative party at present. A different leader of the same party would not change matters for the better and could add to the uncertainty that is threatening to ruin the economy.
“It is becoming increasingly clear that the issue of Brexit should be taken to a public vote in the form of a second referendum, where people are clear on exactly what they are voting for and the real implications of their decision. The recent ruling from the European Court of Justice starting that the UK can legally cancel Brexit puts more options back on the table and should be taken seriously by the government.”
Jo Sellick, Managing Director of Sellick Partnership