Richard North, 21/10/2020  
 


"We've had more than four years to prepare for our now imminent rupture with the EU, but neither the government nor the business community seem to have used them well".

So says Jeremy Warner in another of those statements of the bleedin' obvious. But that's how the fourth estate seems to make (or lose) its money these days, recycling thoughts and ideas that have been churning around forever, and claiming ownership of them.

But, as a practical illustration of where we're at, there is not much better on the table at the moment than a series of reports about a "perfunctory" conference phone call with 250 business leaders, hosted yesterday by Johnson and Michael Gove on the end of the Brexit transition period.

The Financial Times has it that Johnson "fails to calm business concerns over Brexit", with "bosses" left disappointed after a phone call with the prime minister, while Politico has: "British business frustrated by 20 minute Brexit call with government".

In a parallel report, the Telegraph was actually more robust, headlining "'Brexit is like moving house' Gove tells business in 'disastrous' conference call'", having Ministers telling "industry to brace for no-deal in 'shocking, embarrassing and not constructive' call with 250 business leaders".

Staying with the Telegraph, we learn that the gist of the call was to warn UK firms to prepare for a possible no-deal end to talks with the EU, from which one business leader gained the impression that no-deal preparations "are in businesses' court now", amid growing fears that the government will seek to blame any disruption to trade on companies' failure to prepare.

Johnson spoke for ten minutes before leaving in what one person described as a "disrespectful" move underlining his lack of interest in business. Another source described the call as "anodyne" and a third said it was "shocking, embarrassing and not constructive".

One listener is said to have complained that "It felt like it was to rally business and tell us about the 'great opportunities to come' from Brexit the Government sees". He adds: "They didn’t use the phrase 'sunny uplands of Brexit', but that's what they were saying".

The call was "not bad tempered, there was no opportunity for it to be bad tempered", said another person, adding the event "was carefully stage-managed. Just three obviously pre-selected questions were taken".

Yet another source said: "It felt like an exercise so the government can say it has formally talked to business. The prime minister does not have a grasp of detail and that's what Brexit is about. It feels like only in the past few weeks they have realised this and it's incredibly scary, especially as we don't have a lot of time".

Then from one more listener came the view that they had learned nothing not easily accessible in the newspapers. "It felt like an exercise so the Government can say it has formally talked to business".

From the FT, we learn that "disappointed" business leaders had hoped for guidance about what to expect between now and the end of the year, with worries that a government campaign launched this week to inject urgency into Brexit preparations will prove too little, too late.

Many companies, the paper says, are struggling to survive the coronavirus pandemic and are still in the dark about the impact of leaving the EU, business groups and companies said.

Helpfully, the FT offers some direct comment from active business personnel, for instance Neil Clifton, managing director at Cube Precision Engineering, a Midlands-based group that makes products for the automotive and aerospace sectors.

He says he had been focused on adapting his workplace to Covid-19 related changes. "We are not naive enough to say that is going to be the same but no one knows the shape and size of the deal and what it means", he adds.

Rod McKenzie, head of policy at the Road Haulage Association, says 85 percent of UK hauliers were smaller operators who did not have the space to look ahead, while Adam Marshall, director-general of the British Chambers of Commerce, says the government was partly responsible for failing to impress on business the scale and urgency of the changes coming.

Marshall singled out the government's glossy "check, change, go" advertising campaign in July which focused on the hypothetical benefits of Brexit. "It presents it like it’s a routine MOT test but for a lot of businesses Brexit is more like co-ordinating a moon landing", he complains.

According to the FT, the BCC recently highlighted 26 outstanding key questions relating to the government's guidance on post-transition trade, including on UK-EU customs checks and rules of origin.

Then we get Craig Beaumont, chief of external affairs at the Federation for Small Businesses. He says that without positive news about a deal "the message still hasn't cut through". Many businesses are focusing on "surviving to Christmas" rather than what happens on 1 January.

"We don’t know what we are shooting for", says Mark Adams, managing director at Royal Leamington Spa-based furniture maker Vitsoe, which exports to more than 60 countries. Referring to the lack of clarity over VAT, he complains that: "We don’t know what price we are charging. We are watching still and thinking at what point do we sit down and plan what to do".

Adams claims he has done what he can, almost doubling stock in the run-up to the end of the year. But he points out that there is already "stress in the supply chain" with delivery times almost doubling in recent months.

For others, "stockpiles to help firms prepare for Brexit changes, that were previously purchased earlier in the year, have now been run down during the pandemic". That comes from Tamzen Isacsson, chief executive of the Management Consultancies Association.

"Some global head offices", he says, "have communicated that they are unwilling to dedicate more resources to another Brexit deadline … until the situation is clearer and talks have concluded".

Ben Fletcher, head of policy at Make UK, which represents the UK’s manufacturing industry, also said significantly fewer businesses were stockpiling compared to last year. "Their bandwidth has been occupied by Covid", he explains.

Fletcher adds that many companies were still expecting a last-minute deal, rendering "no deal" preparations unnecessary. "There is a presumption among some that this will all be fixed by 31 December - the big multinationals get it but it has not cut through lower down. The message is not landing".

And so it comes to pass that industry in general, so voluble before the referendum in supporting remain, has been comparatively quiet over which option it prefers for Brexit, while many are sticking their heads firmly in the sand, expecting it to be "alright on the night", with Johnson pulling off a last-minute deal, the nature of which they know not.

As for Johnson, he must be wishing that the EU was Manchester's mayor so that, when negotiations broke down, he could bully his way to a solution and impose it anyway.

But it is highly instructive that the prime minister claimed that he could not up Manchester's financial settlement, because extra spending might set a precedent, leading to other regions also demanding more money and starting a bidding war.

It's a pity Johnson can't apply this experience to the EU trade negotiations and understand that, should the EU make concessions to the UK, it might set a precedent leading to other third countries demanding the same. But then, as business is finding out, the prime minister does not have a grasp of detail and that's what Brexit is about.

His own personal tragedy is that, while he can bully Manchester's Andy Burnham to get his way, he can't do the same with the EU.

Also published on Turbulent Times.






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