Brexit: summer update

Adam Jackson Adam Jackson

As the clock ticks down on Article 50 negotiations organisations need to plan for a No Deal Brexit.

Watch as we explore where negotiations are at, what comes next, what to look out for and steps organisations can take to prepare.

A lot has happened since March.

The Government published its white paper at the start of July, setting out its negotiating position for ongoing talks with the EU over the UK’s future trading relationship. The paper contained contentious points for politicians on either side of the channel. Several high profile UK Ministers resigned and Michele Barnier, chief EU negotiator, has suggested that key elements of the UK proposals would be unacceptable to the European member states.

Politicians go on their summer break with much left to be agreed and progress sorely needed.

What are businesses doing to prepare?

Organisations are responding to the ongoing uncertainty in different ways. Here are three things we have seen our clients doing to prepare:

1 Implementing plans for any outcome - some businesses, particularly large corporates and those in heavily regulated sectors such as financial services and pharmaceuticals have carried out scenario planning, developed contingency plans and in many cases are starting to implement their contingency plans. 

2 Streamlining customs procedures - we have seen a rising interest in Authorised Economic Operator (AEO) accreditation. AEO gives businesses quicker access to simplified customs procedures and, in some cases, the right to ‘fast track’ shipments through customs, safety and security procedures. Those organisations that trade internationally are using this internationally recognised accreditation to simplify their customs procedures and enhance the reputation of their business. Given many of the benefits will remain available irrespective of the Brexit outcome, clients are treating this as a ‘no regrets’ action.

3 Updating their data protocols -  Multinational organisations are increasingly looking for a global solution to their personal information compliance issues. There will always be variations in national law but we find that a pragmatic, principle-based approach can be effective wherever a company operates.

We know many organisations still feel that with such uncertainty it is difficult to make Brexit plans. Our experience of working with businesses shows that it is possible to plan for the UK’s departure from the EU.

Planning is possible

Over the last 18 months, I have talked to over 500 organisations about Brexit.

Working with these organisations and with our expert business advisers across a range of areas we have developed a methodology for Brexit planning. We model a number of different scenarios, exploring possible market and business environment changes then assessing these to identify business risks and opportunities.

For one defence contractor, it showed that their business model is resilient to most Brexit changes and their risks are minimal. For another services business it narrowed their focus by identifying that their critical risks and opportunities are all related to the economic impact of Brexit on their own clients.

Similar risks and opportunities appear across multiple scenarios, enabling businesses to take ‘no regrets' action now. Examples include clients:

  • developing export and customs management capability
  • looking at export markets less affected by Brexit such as the Gulf, USA, India and China
  • developing plans to recruit and develop home grown talent and workforce
  • reviewing their foreign exchange hedging and working capital.

Plan for No Deal

Brexit is an opportunity to look at your organisation and review operations and strategy. 

Brexit planning does not need to be a sunk cost that is lost should things change. Clients who have done Brexit planning invariably find beneficial changes they can make today – delivering immediate value - and feel more confident as Brexit approaches.

If you only plan for one scenario plan for No Deal.It is the most disruptive and could be reality in less than 8 months. Use our guidance to help you think about the potential impact, minimise risks and seize opportunities.

Read our Brexit insight and guidance

Consider the potential impacts and opportunities it will create for your organisation