Businesses to Brexit Britain as leaked memo reveals Government has no strategy

Government drift is compounding the economic damage wrought by the Brexit decision. It's not too late to turn it around, and there are some businesses willing to help, but ministers need to get a grip 

Click to follow
The Independent Online

Welcome to “they don't know what they’re doing part 2”. A memo has been leaked outlining what many people (including myself) had suspected: The Government has nothing resembling a strategy for dealing with Brexit. 

In the absence of any real sense of direction, Prime Minister Theresa May has taken to drawing in decisions to settle by herself while the Cabinet’s ideological (David Davis, Liam Fox) and opportunistic (Boris Johnson) Brexiteers feud with the voices of sanity such as Chancellor Philip Hammond and his ally Greg Clark, the business secretary. 

They have the unenviable task of trying to run an economy which is slowly being dragged into a pit while persuading businesses not to run for cover.  

Which is what they are doing. Take today’s results from EasyJet, the low cost airline. Profits took a 28 per cent tumble to £495m. Brexit wasn’t solely to blame for that. Terror attacks and air traffic control strikes both played a significant role. 

But it is the effect of Brexit on the low cost airline's longer term strategy that should be worrying the Government. EasyJet has set up a separate airline based on the European mainland to prepare for when the UK leaves the EU. 

Flying rights are just one of the myriad of things that something like 30,000 extra civil servants are needed to help negotiate. No money has been set aside for them by the way but if you want to know why the NHS isn’t getting the promised £350m a week, well, they don't come cheap. 

Hence EasyJet's contingency plan, set up to ensure that it can still fly after Article 50 of the Lisbon Treaty is triggered. It’s a contingency plan that will inevitably be put into action. 

Contingency plans are what Royal Bank of Scotland chairman Sir Howard Davies was talking about when he appeared on Robert Peston's TV show on Sunday. Banks are also putting them into place, he said, and they may also soon be put into action. 

People don't have a lot of sympathy for banks and that's hardly surprising. They have proved to be very good at whinging in the past, while miscreant members of their staff have behaved disgracefully under their bosses' noses. 

However, it’s still a fact that they employ a lot of people and pay quite a lot of tax. There are plenty of European cities that would welcome them with open arms. And it's not just banks, as EasyJet proves, and as others will prove in the weeks and months ahead. 

The leaked memo frets about businesses holding a gun to Government’s head. They’re not doing that. They’re starting to pull the trigger on Brexiting Britain. 

Even where they are not, investment decisions have been put on hold. According to a study by the Centre for Business & Economic Research, Hitachi Capital and YouGov, a third of businesses operating here have either put investment decisions on hold or abandoned them. The cost to the UK economy? A staggering £65.5bn. To put some flesh on the bones of that number, it translates into tens of thousands of jobs, livelihoods and taxes that could help fund our NHS and much more besides. 

But Brexiteers have never been too fond of letting facts like that get in the way of their story of a supposed economic Shangri La that Britain will allegedly enjoy sans Brussels. 

That certainly won't happen while Brexit backing ministers behave like the spoiled public school boys too many of them are. Meanwhile, businesses are walking away from the mess they’ve created. 

Now it is quite true that businesses, and business leaders, have themselves often behaved like spoiled children in the past. Grossly over paid executives have been too ready to bemoan their lot. They have regularly responded to progressive reforms, such as the introduction of, and then the plans to significantly increase, the minimum wage, with predictions of doom and gloom. They have thrown hissy fits when people have asked them pay their already low corporation tax bills instead of using artificial mechanisms to reduce them further.  

They have too often cried wolf. Now a full pack of canines are attacking the sheep, no one's listening.

Business leaders need to play a more constructive role than they have in the past. To be fair, there are a number of them that have started to recognise that fact. The trouble is it’s hard for them to do so when they don’t know the country's direction of travel and when they can’t make any sensible predictions about the sort of environment they will be operating in within the next two years. 

It is also hard for them to work out to whom they should be speaking given the competing centres of power in Government. Faced with that, a disturbingly large number are voting with their feet. The Government needs to get a grip, and quickly. The current drift is compounding the already grevious damage done by the Out vote. 

It is still possible to limit it, but the clock is ticking.