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Brexit chaos

Tuesday 11 December 2018

OUR business and politics experts react to the news that Theresa May had cancelled the planned vote on her Brexit deal.

Dr Jonathan Owens, Lecturer in Operations Management at the University of Salford Business School, and expert in supply chains comments on the huge uncertainty surrounding Brexit after Theresa May cancelled a planned vote on her deal. As a no deal scenario becomes more likely Dr Owens looks at what might happen under World Trade Organisation rules.

Dr Owens said: “There has been much talk that future trade after 29th March next year could revert to rules set out by the World Trade Organisation (WTO), and therefore suggests that’s how we currently trade with the rest of the world.  

“If you are not sure how this applies to you, then look round your own home and see how many products you have bought that are not made in the European Union.  Some key government supporters of Brexit have suggested that failing to reach a deal wouldn’t be all bad.  Indeed, it has been suggested that even if we left with a no deal position, we could still get a favoured nation status under WTO to trade with the rest of the world.  

“However, regrettably this would not be as simple as it sounds to develop, i.e. new trading channels, routes, tariffs, supply chains etc.  For example, if we consider tariffs, Britain currently trades with twenty-four countries and territories under the sole agreement of WTO rules.  However, with sixty eight countries, it has either fully or partly in place the EU free trade agreement, that enables the UK to trade on better terms.  

“Canada spent seven years getting in place its Comprehensive Economic and Trade Agreement (CETA) with the European Union.  Though, as former UK Foreign Secretary Boris Johnson has claimed, whilst there would be inevitably some disruption, these issues are not insurmountable.  It is a little difficult to go along with the government’s economic claims that fan the “Project Fear” flames, particularly as they are long term (15 years) forecasts.  For example, if you ran a business and it was predicted that your growth “would be reduced by 8% with a no deal”, are you going to accept that or try and reduce this figure?  

“Most businesses would make alternative arrangements, otherwise (unlike the UK Government) they may not have a business to run.  UK businesses are resilient, resourceful and some become the envy of their competition, however what they do struggle with is being out of control, which is where they find themselves today.  

“What UK businesses crave on the Brexit question is a decision; the PM’s deal or No Deal.  Presently the UK Government appears to be lacking in clear and unequivocal direction to provide the UK businesses and population with this key decision, this would enable them to regain control once again.”

Dave Spicer, Dean of the Business School at the University of Salford said:“It is chaos at the moment, there is no other word for it. Business is crying out for some certainty and it is just not coming

“You are seeing the impact of Brexit now on investment decisions but it’s different for different sectors, which means it is difficult to generalise. Some are putting off investment decision, others may be bringing them forward.

“We are far from any certainty at the moment. It is not ideal to say the least to be coming to the end of 2018 and still be no clearer what approach we will be taking after March next year

“There seems to be very little upside to Brexit at the moment. The businesses I have spoken to who never wanted to leave are even more sure now that we should stay and even those businesses that wanted to leave are starting to have reservations about the process. 
“It is clear that from an economic perspective whatever deal we end up with will be worse than what we have now.” 

Dr Ben Williams, Lecturer in Politics and Political Theory at the University of Salford comments as Theresa May delays a vote in Parliament on her Brexit deal.

Dr Williams said: “Recent Conservative general election pledges now seem more ironic than ever. David Cameron warned of a “a coalition of chaos” if Labour’s Ed Miliband became Prime Minister in 2015, while in 2017 Theresa May promised that if elected to power her government would be “strong and stable”.

“In light of current political events, an atmosphere of chaos can certainly be associated with Theresa May’s administration, which is proving to be anything put strong and stable. Indeed, her willingness to call off this week’s vote appears to indicate attributes that are completely the opposite. 

“These seem to be unprecedented times in British politics, with instability in evidence on a constitutional, political and economic level, and which is increasingly impacting on the wider public mood. The Brexit saga shows no sign of abating, and the Conservative government seems unable to respond. The mood of doom on its parliamentary benches this week has been evident for all to see. 

“Since Britain joined the European Community in 1973, Europe has always divided and damaged the Conservative Party, and the current bout of internal part blood-letting could well prove to be fatal. There is even talk of any future general election resulting in voters punishing the Conservatives for their handling of Brexit since the referendum vote of 2016, on a scale even worse than the 1997 Labour landslide, and which could even see the party split. 

“How much longer Theresa May can survive is now subject to almost daily speculation, and although her durability and stubbornness in managing this issue seems admirable, it does look ever more likely that we are witnessing the final days and weeks of her premiership. 

“However, whether any other political leader from another party can offer a clear solution to this intractable impasse remains to be seen. As we enter 2019, the future of British politics seems uncertain to put it mildly, with dark undercurrents of extremism on both the left and right gaining support amid such wider public disenchantment.  A change of Prime Minister, “A people’s vote” or a general election are all dramatic imminent possibilities in these very unstable times.” 

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Sam Wood

0161 295 5361