Howard Bentwood client, Contract, Temporary...
It may be Valentine’s Day, but so far there has been little love lost between Remainers and Brexiteers in the argument over whether Britain’s formal departure from the European Union harbours a new era for prosperity or economic ruin.
The rapid passing of the bill to begin the Brexit process, hot on the heels of a landmark Supreme Court ruling, appears to have paved the way to a definitive break from our European connections tout suite. Despite this, last-gasp efforts continue from some quarters (notably the Scottish Nationalists and Liberal Democrats) to shoehorn in multiple amendments before the Prime Minister’s self-imposed 31st March deadline to trigger Article 50.
The uncertainty that has shrouded both the Brexit process and the UK’s negotiating position has obviously affected the domestic and international markets. In the days following the Yes vote the FTSE 100 dropped sharply before recovering quickly to hit a ten month high just a week later.
In the run up to the vote, Cedar saw many clients understandably taking a more cautious approach to hiring, especially at the most senior levels and particularly for permanent positions. However, in a turbulent political and economic environment, there is arguably an even greater need for top-tier expertise on board and many clients instead opted for an interim approach, taking on senior support on a more flexible basis. This allowed them to benefit from high-level skills, without committing to the long-term overheads of a permanent employee. For the candidate, too, this presented additional opportunities to leverage their experience for higher recompense and exposure to a number of different sectors, allowing them to increase their own professional development.
While Cedar has many reasons to be cheerful, until the exact picture of a post-Brexit Britain becomes clear opinion will remain divided on the prospects for UK Plc. An FT poll of 120 leading UK economists in January claimed that the majority of them are pessimistic about Brexit, believing it will harm medium-term prospects. Diana Coyle, Professor of Economics at the University of Manchester claimed that worsened trading relationships will hurt exporters – including those in the financial and professional services industries – and “tear a hole in the fabric of the economy”.
The negotiating position that the UK government adopts with the EU will be critical for future growth, leading some to be cautiously optimistic. In the same FT poll Gerard Lyons, Chief Economic Strategist for Netwealth Investments, said, “Even though there are challenges associated with leaving the EU, I expect the government to have decided upon a strong negotiating stance by the time it triggers Article 50”.
Despite the government ruling out an EEA model, some believe that the UK will continue to maintain the existing trade barriers the EU imposes on the rest of the world, while also facing trade barriers when trading with EU members. Professor Patrick Minford, Professor of Economics at Cardiff University, and other prominent voices from the group Economists for Brexit, have dubbed this the “Great Brexit Consensus Deceit”. Indeed, the status quo does appear to relegate Britain to the role of the unwelcome relative at a family gathering: Tolerated, while still expecting an inheritance.
Professor Minford et al make a compelling case for unilateral free trade, claiming it will lead to a fall in consumer prices, increased competition and output, equivalent to a large tax cut. They argue that a Green Card visa system for skilled workers would offer adequate protection for EU-residents already in-situ while also eliminating the welfare burden.
While it’s difficult to fully support such a rose-tinted version of events, there are certainly tangible benefits to the Leave vote, even in the short-term. The fall in the value of the pound creates great opportunities for export in goods and services. Every dollar- and euro-denominated business that buys from UK suppliers has enjoyed significant savings on their purchases since June. The relatively weak pound and a greater focus on global trade could lead to a boom for experienced finance and procurement professionals able and willing to seek opportunities outside the UK, or to provide expertise for global companies with UK operations.
Forward-thinking companies would do well to consider creating their own Department for Brexit by bringing in or dedicating internal resources to look specifically at their strategy in light of the risks and opportunities we face following our emergence from the European Union.