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Brexit – Positive Thinking In Very Short Supply By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

 

 

 

Those choosing to moan about the UK Government agreeing contracts worth £104 million for outside help on Brexit might better have wished that the amount being spent on consultants was double or even treble that amount!

It is to me frankly quite amazing that a country such as ours could have been allowed by its political masters to enter into the possibility of leaving the EU and then, following a referendum vote that for such a very important decision, was based on a simple majority vote, find ourselves in the position of seemingly not having a clue about the consequences of leaving and of how to manage them!

Thank you David Cameron for leaving us with such a mess to sort out following the ill-considered manner and timing of the question that you posed for referendum voters let alone the dreadful manner in which you conducted your campaign for us to stay in the EU. Not that it was just the ‘remainers’ that messed up of course – the leavers or as we tend to call them these days, Brexiteers deserve to be equally hung, drawn and quartered for some of the more ridiculous and dangerous promises and claims that they made and their own complete lack of understanding and comprehension of the potential consequences.

Like so many others in industry, I have all but completely lost faith in the Government’s ability to deliver an agreed Brexit solution – one that is suitable for all and that would remove dangerous uncertainty and provide both the security and scope that industry and commerce needs to prosper.        

If there is one thing that is certain in this wretched debate it is that no matter what side of the Brexit fence you choose to sit on that neither voter nor politician, Labour, Conservative, Lib-Dem or UKIP, journalist, broadcaster or armchair critic had much if any idea of the implications that might follow a vote to leave the European Union. 

Indeed, it seems to me that very few, apart from a handful of remaining top civil servants that the poacher turned gamekeeper former Chancellor of the Exchequer, George Osborne now editor of the Evening Standard, managed to leave in their posts, had sufficient knowledge at the time of the June 2016 Referendum vote that allowed them to fully understand the implications of, following the vote to leave, how this might be satisfactorily negotiated and best achieved in the interests of all concerned. Looked at another way, how can you destroy legislation, operation and understanding built up over 45 years of UK membership of the EU and negotiate and agree a satisfactory way out in a period that is just slightly short of three years?  

I note this morning that the BBC is reporting on its website that “companies with the most valuable Brexit contracts include Boston Consulting Group, PWC and Deloitte. The BBC quotes a government spokesman saying that “Departments drawing on the advice of external specialists was “standard” practice and that “six companies each received a contract worth £10m for Cabinet Office Consultancy Support for EU Exit”. My comment on this is good, what a pity that a lot more companies and those with expertise that we need had not been involved!

According to the BBC “contracts for strategic programme management run for a year until 1 May 2019” and they give government the option of extending them for another year at the same price” – “this according to letters from the Crown Commercial Service to the suppliers”. The US-based Boston Consulting Group received five contracts, worth £14.2m, to work with the Cabinet Office, Departments for Environment, Exiting the European Union and Business”.

You could well argue about what have we got for our money apart from an un-wholly mess but I take the view that the problems we are suffering now in regard to finding a negotiated Brexit solution might well have been twice as bad had we not had consultants working alongside senior civil servants and government officials.

As I write this I have absolutely no idea of what the outcome to this mess will be. Like many others, I want to believe that Prime Minister Theresa May will pull off whatever it is that she is trying to achieve in time for March 29th and that Parliament will give whatever that is their support. As to the attitude of the EU itself, I remains of the firm belief that deep down the EU dies not want the UK to leave without an agreed deal and that somehow, at the 99th hour, some kind of rabbit will come out of the hat. We will see!

Right now while industry sweats as it awaits news of whether we move out of the EU with a deal or without or, whether the can is kicked down further the road – a situation which would also be damaging for industry especially in regard of long term choices that need to be made, we are seeing sufficient signs of companies turning their backs on Britain. Honda was inevitable and while probably only indirectly linked to Brexit, one might well say that it is Brexit that provided a neat opportunity to announce its decision.

Again, any decisions that have or will be taken by Toyota and Nissan in regard of the sudden new benefits provided by the EU/Japan trade deal and that over time eliminates tariffs on cars made in Japan being sold in the EU area and to an extent, negates any need assemble cars in a third country will probably be played out using Brexit as an excuse.

As I have said before, Jaguar Land Rover and a few other smaller yet to be considered ‘real’ manufacturers of cars in the UK as opposed to the bulk that merely assemble cars using predominantly but not wholly imported components such as Vauxhall, Nissan, Toyota and Honda, means that the UK car industry today is not what it often seems and is portrayed by media. Yes it is important form a jobs perspective and for the economy as a whole even if not quite so much for the skills it fosters.

In respect of Brexit I am somewhat less worried about the prospects for the UK banking industry than hitherto as degrees of commons sense decisions in respect accepting the importance of the UK banking sector to the benefit of the EU do seem somewhat more apparent.

However, my concerns over the damage that a no-deal Brexit would cause grows by the day. Each time I have previously written on the subject of the dangers for the UK Aerospace industry from Brexit I usually get a tirade of abuse form Brexiteers. For me personally, that is water off a ducks back but in respect of the reality of what this would means – indeed what Brexit as a whole might eventually mean for the UK aerospace industry – I am filled with foreboding. I am left to ask myself why on earth would Airbus invest in the UK when in a post Brexit world it could do so in France, Germany and Spain with few ramifications apart from aspects of cash flow?  Sure, the UK wing manufacturing site at Broughton in North Wales may well be secure for a decade and more but I would give much for its chances after that!

I have all but given up hope that Brexit might be stopped and to be fair I said right from the start of this dreadful exercise if misunderstood choices that in the end I would be forced to go with the flow. That Mrs. May is trying to achieve something to our benefit is not in doubt but it looks increasingly as if members of her own split political party will do their best to either wreck it or to not give her the chance. Whatever, no one whether you are a Brexiteer or Remainer should fail to understand the unprecedented levels of work that have been piled on a reduced number of civil servants and others who understand the complications involved of leaving the EU.

Today the civil service is probably 30% smaller than it was when the Coalition Government took office in 2010. No one envisaged a Brexit referendum vote coming back then and just as has been very evident in the Foreign and Commonwealth Office, the Treasure is today seriously short of the skills required to support such an enormous change as Brexit presents to the nation.     

To accusations that all she is doing is buying more time my answer ought to be what is wrong with that and why on earth wouldn’t she do that? As to Labour’s role in all this – God help us either way!    

CHW (London – 25th February 2019)

Howard Wheeldon FRAeS 

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon

hwheeldon@wheeldonstrategic.com

@AirSeaRescue  

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