Monday 03 September 2018
Self-confessed Brexit nerd, Michael Moore Senior Adviser at PwC, joined us for a Brexit-focused update and advice on what professional service firms should be doing for clients. PMF Scotland was delighted to host such a high-profile speaker; Michael was previously Secretary of State for Scotland (2010-13) during his 18 years in the House of Commons, and European Business Adviser to the Deputy Prime Minister (2013-2015).
Michael outlined at the beginning of the session that one thing is for sure - Brexit is ever changing. Is a deal or no deal, likely or not likely? Risk of ‘no deal’ is real. Bank of England Governor Mark Carney recently said: “The risk of no deal is uncomfortably high”.
However, Michael suggested that a no deal is a helpful benchmark to communicate with our clients – this is a starting point. However, the later an agreement arrives, the less certainty there will be of the details in place, and the less information on what the final deal means for our clients. Transition is not a separate treaty and is offered only if we have an ‘orderly exit’ and all items agreed, therefore clients should ask themselves, ‘if it goes wrong, what do we need to do?’. It’s also important to keep in mind that once the Acts of Parliaments are in place, details will then only be apparent for the trade acts – how businesses are affected.
Another point to keep in mind is the EU has 45 trade agreements in place on behalf of all 28 members, will the UK have to negotiate new terms again with other countries? It’s all very well for politicians to say a deal is done, but businesses need to be aware of what this means in reality – how will this impact on the bottom line?
On the subject of which sectors will be impacted the most – Michael explained that businesses that have a higher level of regulatory/ operational complexity, need to do the most Brexit planning e.g. financial services/ pharmaceutical/ transport/ chemicals/ energy.
On what clients can do now, Michael advised that if businesses haven’t already looked at Brexit planning, they risk losing key components in their supply chain, which could quickly breakdown. If businesses look at short-term contingency planning, they risk missing the bigger picture. Clients should be asking themselves some straightforward questions on where staff are coming from/ supply chain/ logistics.
Whatever Brexit we get, there is a very narrow timeline to when we legally leave the EU, that we have triggered.
Written by Kerry Manton, Regional Chair Scotland
Marketing Manager, Chiene + Tait