As we hurtle towards another major Brexit milestone, businesses should be stepping off the back foot and engaging with the conversation in Europe, says Mark Essex.
Two years on - and where are we now? Anniversaries often stagger under the weight of their own significance. This weekend’s red letter day, marking the second year since the EU Referendum, could hardly be more loaded.
Yet, for me, this isn’t the occasion to rue what has – or hasn’t – come to pass. I see it instead as a prime time to challenge some of the misleading narratives around Brexit – and to help promote a pragmatic outcome to the negotiations.
Take, for example, the neat dictum we hear repeatedly: ‘Britain divided, Europe united’. To my mind, not only is this a simplistic reading of the situation. If we’re not careful, there’s also a very real risk of it becoming self-fulfilling.
Of course, in a country which voted 52 to 48, debate is inevitable. We see that reflected in the prime time drama that’s recently been playing out in Parliament and the Upper House. The room for manoeuvre is clearly limited – which is why it has taken so long to get as far as we have. But we are just a few weeks away from the crunch point that is the trade bill and we probably need to let the politics play itself out. Business lobbying is crucial for some matters, but there is no point just piling more pressure on to the government in the UK.
And, if we’re talking unity, let’s remember that the EU’s own cohesion has barely been stress-tested as yet. For now, certainly, they speak as one in terms of their tariff border, citizens’ rights, or extracting a divorce settlement from the UK. But what will happen when issues that pit one state against another start to surface: 27 different partners, each with their own priorities and agendas? Perhaps unity will prevail, but we can’t be certain.
Time to step up
I’m nervous that we are leaving it so long to find out. Last January, I wrote here about the need for business to step up and actively engage in Europe, with their customers, their European HQ or with European industry lobby groups. Some 18 months on, that engagement with our neighbours on our own terms has yet to take off. But we must look at how we can work together on our contingency planning should the talks break down. What practical and operational steps can we take together to avoid the worst of the disruption?
We could also, in our day-to-day interactions, try to reduce the likelihood of that scenario. We could explain some of the reasons why finding a Brexit position is difficult for our divided country. Through pan-European business groups or trade bodies, we could challenge the argument that Brexit has to be punitive in order to discourage others from jumping ship. With respect to our friends in Brussels, I’d counter that there’s only one Brexit, because there’s only one UK in the EU. Setting aside national modesty, we’d be something of a hard act to follow. We are the world’s fifth largest economy and a net contributor to the EU’s coffers. And we also already sit outside of both the euro and the Schengen agreement.
We could also explain that, as business leaders, most of us are not calling for a bonfire of green tape. Nor to prevent long distance lorry drivers from taking breaks. We follow the rules; queuing for buses is in our national DNA. So I think, all in all, it very unlikely that any other country weighing up leaving the EU could ever expect a deal on similar terms to those Britain may eventually achieve.
And I think the mood, certainly from businesses in Europe, could well be more receptive, now that transition is on the table. As one of my Spanish colleagues explained here in April, that agreement was a wake-up call. It jolted EU companies from denial to acceptance, that Brexit was indeed going to happen – and could have very real implications for their business, whether that’s food production in Barcelona or car parts manufacturing in Bavaria.
At a time when Europe already has a bulging in-tray – internal EU reforms, immigration, political flare-ups in various member states – could we finally be at the point where we move beyond acceptance? To meaningful bargaining? If business now also brings some much-needed pragmatism and good-will to bear in that process, perhaps – whisper it – a workable deal could finally be done.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK. You can register for the email subscription list of this column and expert views from our Brexit leaders.