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Everyone knows Brexit has meant a lot of uncertainty for British businesses ever since the referendum in 2016. However, now that Theresa May has unveiled a proposed deal with the EU, the question is if UK companies can stop worrying or if they should dial up their concerns to 11.
Let’s start with what has happened so far. On Wednesday November 14 the prime minister emerged after a five-hour marathon meeting with her cabinet, the BBC reported. She claimed the result of which was that the cabinet backed a draft withdrawal agreement between the UK and the EU.
The 585-pages long agreement is a literal brick to plough through. But essentially, it includes things like a commitment to protect the rights of EU nationals in the UK and Britons living in the EU. This means that people from Europe will be able to continue living, working and studying in Britain and vice versa, which is something many entrepreneurs have worried about in the past.The proposed divorce agreement also includes a planned 21-month transition period after the UK leaves the EU in March 2019.
However, the part that has launched a wave of criticism from some Brexiteers has to do with the so called backstop, which aims to ensure no new physical checks will be introduced along the border between the Republic of Ireland and Northern Ireland in the event this is not settled by a UK-EU trade deal.
This was one of the main reasons Brexit secretary Dominic Raab cited when, following the announcement, he handed in his resignation. He said the idea “presents a very real threat to the integrity of the United Kingdom” and that he “cannot support an indefinite backstop arrangement where the EU holds a veto over our ability to exit.”
Raab added: “No democratic nation has ever signed up to be bound by such an extensive regime, imposed externally without any democratic control over the laws to be applied, nor the ability to decide to exit the arrangement.”
Raab wasn’t the only one who handed in his resignation. One of his junior ministers, Suella Braverman, a former chair of the hardline Brexit ERG group of Tory backbenchers, has also left the cabinet. So far, pensions secretary Esther McVey and Northern Ireland minister Shailesh Vara have also resigned.
This may be cause for concern, Mike Smith, director at Business Expert, the invoice finance platform, told Elite Business. “The question is whether the resignations of Raab and McVey will trigger a landslide that will bury May’s Brexit deal for good,” he said.” Both are clearly angered by the terms of May’s backstop from which, in the absence of a deal, we will be unable to withdraw and which would leave Northern Ireland in a different relationship with the EU than the rest of the UK.”
Smith continued: “We could well see the UK heading towards general election. The move has already seen [the] sterling drop more than 1% against the dollar, which will only get worse if May’s leadership is challenged.”
In fact, one such challenge may be underway. Grand Brexiteer Jacob Rees-Moog has called for a vote of no confidence against the prime minister, The Guardian reports.
UK businesses also expressed concerns about what was actually in the draft withdrawal agreement. “It’s disappointing that the proposed deal is so incomplete and vague,” commented Andrew Leech managing director at Fleet Evolution, the green car scheme provider. “. However, the rapid escalation in the process is something that we see as positive. Brexit was always going to cause mass upheaval and disruption, we are far better having this political fallout now than have a slow process to an eventual stall.”
Leech added: “Brexit is a tough one, no solution can please everyone and playing party politics on both sides isn’t serving the people nor business so hopefully we can now move to set politics aside and get a resolution that all sides can live with and mutually benefit from.”
So despite May’s deal now being on the table, it’s clear many business leaders still feel Brexit means lots of uncertainties. “Many companies are not set up for continuous planning and may find it difficult to respond to and adjust their forecasts in light of unexpected political changes and the ripple effect that they have throughout the economy” said Robert Douglas, vice-president of UK and Ireland, Adaptive Insights, the company develop business planning software.
He continued: “This will make it hard for these finance and management teams to devise an accurate financial plan and make business-critical decisions.”
In other words, it’s understandable that leaders like Dean Sadler, CEO at TribePad, the recruitment software company, are less than happy with the members of parliament right now. “Politicians have managed to create an almighty mess and continue to act like five-year-olds in the playground,” Sadler said. “The only saving grace is that more young people are now engaged in the debate and may be able to hold them to account better, in [the] future.”
Despite May’s draft agreement, Brexit is far from over. So it’s worth keeping yourself educated on how you’re going to run your company in a Britain outside the EU.