It looks official: we’re heading for the hardest of Brexits after Theresa May all but confirmed the deal that the government is seeking will make it impossible for Britain to remain in the single market.
The EU has stated repeatedly that its four freedoms - free movement of goods, services, capital and people - are indivisible. Accepting those terms, said May, would not amount to leaving the EU. Instead, the UK will seek the establishment of a new free trade agreement with European partners.
Some will be relieved that the government is following through, others will be more disheartened than ever. British businesses are now preparing for life outside of the EU.
“It’s been a disaster,” says Kat Wczesniak, founder of CuriousKat Adventures, reflecting on her business’s post-referendum experience. The pound’s erratic performance has hurt her bottom line because CuriousKat negotiates prices with suppliers in local currencies. “Our clients pay for their trips in advance, so when the pound suddenly dropped we lost a lot of money,” explains Wczesniak.
Now, with Britain’s exit from the EU bearing an increasing resemblance to a crash landing rather than a swan dive, Wczesniak is worried about the future of her diverse, dispersed workforce and suppliers. “We co-operate very closely with suppliers on the continent,” she says. “And we’ve also outsourced some admin work to Europe. What happens now?”
Immigration reform is also a worry for Wczesniak. She has resided in the UK for 15 years and is a naturalised British citizen. The decision to naturalise, she wryly notes, to protect herself from Poland ever leaving the EU. Some of her staff, however, are EU citizens.
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This is a theft of democracy, a presumption that the 51.9% of people who voted to leave meant the most extreme version of Brexit available.
The potential difficulties presented by post-Brexit cross-border cooperation and immigration has Wczesniak pondering a move to elsewhere within the EU. “The fact that I live here doesn’t mean the business needs to be here,” she says. “My business is already very virtual, we work all over the world. Everything is set up online. So the task of potentially moving the business is made easier.”
The threat to the free movement of goods and capital also has Paresh Davdra, CEO and co-founder of RationalFX and Xendpay on red alert. “If we’re unable to maintain access to the single market, we won’t be able to passport into Europe which is a big issue for us,” Davdra told BusinessZone. “We’re still hoping the UK has access to passporting. If it doesn’t, we’ll need to look at passporting from another EU country.”
Before taking any drastic steps, says Davdra, the company will wait and see what kind of arrangement is reached with the EU. “We need to wait and see what happens at the end of March. From then we’ll still have two years. But we’ve done research into what we could do.”
Now we need to put an end to the division and the language associated with it – Leaver and Remainer and all the accompanying insults – and unite to make a success of Brexit and build a truly global Britain.
Davdra’s wait-and-see pragmatism was also apparent in the British Chambers of Commerce’s reaction to May’s speech. “In business, what you achieve in a negotiation - not what you bid for - is what really matters,” said BCC’s director general Adam Marshall. “The Brexit process is no different. While businesses now have a clearer sense of the prime minister’s top-line priorities, they will come away from her speech knowing little more about the likely outcome of the Brexit negotiations than they did yesterday.
“The simple fact is that businesses all across the UK are carrying on. Directly-affected companies are being pragmatic, and are preparing for a range of possible outcomes.”
Despite the enduring nervousness, May maintained a sanguine tone throughout her speech, promising that her government would “use this moment of change to build a stronger economy”. She also preemptively denied any accusation that completely severing ties with the EU represented “a decision to turn inward”.
“So the country is coming together,” said the Prime Minister. “Now we need to put an end to the division and the language associated with it – Leaver and Remainer and all the accompanying insults – and unite to make a success of Brexit and build a truly global Britain.”
The call for unity has already failed to alleviate Westminster’s bitter atmosphere. “This is a theft of democracy, a presumption that the 51.9% of people who voted to leave meant the most extreme version of Brexit available,” said Tim Farron leader of the Liberal Democrats.
Jeremy Corbyn also delivered an excoriating rebuke of the speech: “Theresa May has made clear that she is determined to use Brexit to turn Britain into a bargain basement tax haven on the shores of Europe. She makes out this is a negotiating threat to the 27 EU countries but it’s actually a threat to the British people’s jobs, services and living standards.”
About Francois Badenhorst
Francois is the deputy editor of BusinessZone and UK Business Forums.