Successfully completing the tongue-twister “Brexit Business Breakfast” proved to be far from the hardest referendum-related problem facing business leaders in Swindon this morning (Wednesday).
As politicians played what seminar host and partner at law firm Royds Withy King Lauren Harkin called “a national Deal or No Deal,” the town’s bosses were desperately trying to get to grips with Brexit, and what leaving the EU would mean for them in just over 100 days time.
It was noted that Wednesday, November 28 was an appropriate day on which to hold a Brexit seminar. While leaving the EU has never been far from the top of the news agenda since the referendum in June 2016, many delegates drove to Swindon’s STEAM Museum listening to chancellor of the exchequer Philip Hammond tell Radio 4’s Today programme that the UK would be poorer under all Brexit scenarios – including the one prime minister Theresa May has struck with the EU.
Economic and political strategist Bob Devine told delegates – with apparent reluctance – that he agreed with Donald Trump, who said May’s deal could prevent a trade agreement between the UK and US.
“We’d be stuck with EU rules if the backstop comes into play, and that will happen if we’ve not successfully completed a trade deal with the EU by 2022,” he said.
“Most deals take four-and-a-half years, so there’s a strong possibility we’ll be somewhat screwed.”
Bob, who worked in the City for 30 years, ran delegates throughs some likely scenarios: MPs will vote on Theresa May's Brexit deal in the Commons on December 11 after five days of debate – that much we do know.
But “the future is uncertain over the next three months,” he said. A Norway or Canada-style deal, a general election, a second referendum, a delayed departure – all are possibilities. And businesses have to plan for each possible outcome.
Denis Moriarty and his corporate bank FX team at Barclays International have - as you would expect - been crunching numbers to determine the effect on the value of sterling caused by each likely outcome.
Mrs May’s deal being passed by Parliament, he told delegates, could see a lift of between one and two percent. A narrow defeat might also cause a small uplift. But a big defeat could see the value of the pound fall by between five and seven percent.
Crashing out of the EU, meanwhile, could see the value of the pound fall by as much as 20 percent – as it did on the day following the referendum.
One of Swindon’s biggest businesses has been busy planning for a variety of Brexit outcomes. And Sarah Munro, Brexit program lead at Intel Corporation, which employs 500 people in Swindon and 100,000 around the world, told delegates of her company’s contingency plans.
Like many ‘reluctant investors’, Intel had been forced to spend money and resources ensuring its business was not caught out by any of the Brexit scenarios.
The company has conducted risk assessments to ensure physical goods and also data can smoothly cross trade borders. Plans for shipping delays have been written, and Intel has looked at its supply chain as well as its own products to minimise disruption to its customers.
The firm’s staff could be also be adversely effected by Brexit, and the HR department had been liaising with both EU nationals working in the UK, and British citizens based in Europe.
Brexit will also mean regulatory changes for the company. Patents and trademarks could be effected. Would the CE mark be replaced by a returning British kite mark, Sarah wondered? Intel has plans in place to ensure it complies with new regulations, and that it has the staff skilled to deal with the paperwork.
Taking questions from the floor business analyst and change consultant Amelia Bishop of Amelia Bishop Consulting said the bare minimum firms could do to prepare for Brexit was to take a proactive, rather than reactive, approach: looking at their supply chains, identifying pinch points, keeping an eye on their competitors, and looking out for opportunities.
She also suggested that while governments were hammering out trade deals, businesses in non-regulated sectors could be establishing their own reciprocal arrangements.
The experts were invited to end the Q&A on a positive note, but this proved problematic. Instead, delegates were told we were living in “an uncertain world” and “in uncertain times”.
Business leaders left the seminar with a better idea of the strategies to adopt to face the challenges of Brexit, but if it was reassurance they were seeking, they’ll have found it in short supply.
The Swindon Brexit Business Breakfast was organised by Royds Withy King, Barclays, and Amelia Bishop Consulting