Unite to achieve best Brexit deal, counsels CBI chief

At the CBI Annual Conference, CBI President, Paul Drechsler issued a call for unity, to help business, the Government and the European Union to achieve the best Brexit deal to protect the UK’s economy.

Relocate Editorial

6 November 2017

In a speech to over 1,000 business leaders at the CBI’s Annual Conference, CBI President Paul Drechsler unveiled new research showing the extent to which firms are actively preparing for Brexit.Smaller businesses are less prepared, whilst larger firms face greater challenges, but both are being affected by uncertainty. By March 2018, 60 per cent of firms will have triggered their contingency plans if there are no transitional arrangements in place.Highlighting the contribution of business to society, he called for firms and the Government to close the widening productivity gap, and adapt to the changing work practices of the future, as well as recognising the need to allow local areas to deal with these issues their own way.

A single, clear strategy is needed for Brexit

“Business has a responsibility to speak up and suggest solutions when we see obstacles in the way of UK prosperity,” said Mr Drechsler. “Currently, we see one major challenge – not Brexit itself: we’re 100 per cent committed to making a success of it. But the approach to Brexit.“We need a single, clear strategy. A plan for what we want, and what kind of relationship we seek with the EU. At the moment, I’m reminded of a prime-time soap opera, with a different episode each week. First Lancaster House, then article 50, the European Council, two dinners with Juncker – and no doubt many exciting instalments to follow.“Each one becomes the Big Story, until the next one rolls around. And the effect is that genuine steps forward such as the Prime Minister’s Florence speech don’t get the recognition they deserve. That speech represented real progress. It put the needs of the economy first. It set a co-operative tone. And it unlocked progress.“We need to learn from that and recognise that this is the moment to unite behind the principles of the Florence speech. As you’d expect our largest and best-resourced companies lead the way with contingency planning – financial services, tech, logistics.“But for SMEs, powerhouses of the UK economy, things are taking longer. They tell us they’re struggling. Struggling to plan, to predict, to calculate. To those companies, I say this: We will support you. But to Whitehall and Brussels, the Bundestag and the Assemblée Nationale, I say this: Now, more than ever, business is looking for political leaders across Europe to step up.“For 10 per cent of business the alarm has already rung, and they’ve begun moving staff or slowing recruitment. Without a transitional deal, when EU leaders gather in Brussels for the March summit, a total of 60 per cent of businesses will have done the same. The clock is ticking.“So government and the EU need to get a move on. Making progress, remaining flexible and, first of all, sorting out transitional arrangements. These arrangements won’t solve everything, but 75 per cent of the country’s largest firms say it would halt their preparations for no deal.“And then, after banking that short-term stability, we can turn to the biggest prize of all. The long-term relationship between the UK and the EU, based on a trade deal for goods and services that’s right for the people of Britain.”

Mr Drechsler highlighted recent research on Brexit planning carried out by the CBI with 306 of its CBI members. These three key questions provided insight into how UK businesses are planning for Brexit:Has your organisation done any of the following in response to Brexit?

Discussed Brexit at board level: 87 per cent
Created an internal taskforce or steering group to monitor and report on Brexit: 32 per cent
No action taken: 11 per cent
Hired external firms to help manage response to Brexit: 10 per cent
Hired additional employees to help manage response to Brexit: 4 per cent

When do you need greater certainty regarding Brexit to stop the implementation of ‘no deal’ contingency plans?

Deadline already passed: 10 per cent
End of January 2018: 24 per cent
End of March 2018: 26 per cent

Would the agreement of transitional arrangements by the UK and EU halt the implementation of your contingency plans?Those who answered ‘yes’ to the above question broken down by size of company (excluding “don’t knows”):

0-49 employees: 39 per cent
50-249 employees: 19 per cent
250-499 employees: 43 per cent
500-4999 employees: 37 per cent
5000+ employees: 75 per cent

Business and government: a collaborative approach to Brexit

Mr Drechsler continued, “Success comes from developing those different views into a shared vision. I know that Brexit is a huge issue. But parliament has a proud history of meeting unprecedented challenge with unprecedented co-operation.“Just think what we could achieve if we do it right. A constructive and collaborative approach to Brexit would reassure millions of EU nationals in the UK and tell them that yes, we do want you to carry on contributing.“It would make free trade deals quicker and easier to accomplish. And it would project an image of a strong, self-confident nation across the world. But most of all it would be a principled way to get the deal that we want and that Europe wants.“A good deal. A deal that allows businesses to grow, import and export easily. A deal that keeps our R&D structures intact, for new work into robotics and artificial intelligence. A deal that protects jobs, people’s ability to travel, and their freedom to choose the life they want.“In other words, a good deal would secure our prosperity for generations. We need politics, united. Business, united. And Britain, united. That’s the only way to get the Brexit we need, the economy that we deserve and prosperity for all.”

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Uniting the country behind ‘inclusive capitalism’

“British industry has never been more keen to prove its worth to society than it is today. Three quarters of all UK tax revenue – £500 billion – is supported by private sector activities. Through the taxes they pay, the jobs they create and the products they make, the private sector employs almost 27 million people, or over 83 per cent of all employment.“Business has invested billions into UK infrastructure. And we’re fantastic at turning our heritage of diplomacy and innovation into international trade.“Such as our over $1 trillion trading and investment relationship with the USA, split 50:50 each way. Our $2 trillion trading and investment relationship with the EU. Our status as the largest G20 investor and job creator in India. Or even our approach to China, where we’ve been the first to shift our investments into high growth regions and sectors. The entire nation can feel proud of this. We must unite the country behind inclusive capitalism – more equal growth, and a sustainable, resilient economy.“Data from the ONS shows that Britain’s output per hour worked is now around 22 per cent lower than the US and France and around 27 per cent lower than Germany. With those figures, it no longer seems unfortunate that that Germany has grown its exports twice as fast as us over the past five years – it seems inevitable.“As a CBI report identified last year to close the gap we need to invest in infrastructure in infrastructure, in education, and in management. This will take time. But it is possible. We need to revise the apprenticeship levy, to make it more flexible and responsive. And at the same time, we have to invest in all schools, by protecting ‘per pupil’ funding, replenishing capital budgets, and making sure that when young people go out into the world of work, they’ve got the skills, experience and guidance they need to succeed.“But we can also respond ahead of time to the fact that many jobs in the future will be automated – over 35 per cent, according to some studies. This has huge workplace implications. But it also has huge implications for inequality. The low-skilled jobs that disappear will be replaced by high-skilled jobs, responsible for oversight and management.“So business, government and trade unions must work together. And make sure that our economy and our employees are able to adapt.For related news and features, visit our Enterprise section.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online Directory

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