With the clock ticking closer toward the United Kingdom’s scheduled departure from the European Union on March 29, the collective freak-out is roaring louder.
With the clock ticking closer toward the United Kingdom’s scheduled departure from the European Union on March 29, the collective freak-out is roaring louder. Many businesses have long been vocal over the U.K. government’s clumsy attempt to find its way to a “soft” (i.e., negotiated) rather than “hard” (no-deal) Brexit, the latter of which has festered all sorts of scenarios – none of them ideal.
“The government is probably not ready to prevent the economic impact of a no-deal,” Danielle Haralambous, U.K. analyst at the Economist Intelligence Unit (EIU), told CNBC last month in one of the more understated assessments about Brexit.
The business community’s skittishness over what could occur in the event of a hard Brexit is summed up by the actions of Dyson, the British technology company that manufactures a bevy of products including vacuum cleaners, blade-less fans, hair dryers and perhaps in the future, electric cars. Its founder, James Dyson, has been described as a hard-core supporter of Brexit, but his namesake company is moving its headquarters from the U.K. to Singapore. The company claims the move is due to the fact more of its customers and manufacturing are in Asia; nevertheless, the optics couldn’t be worse.
More business and nonprofit leaders is coping with the uncertainty over Brexit with one, or more, of these three tactics: speaking up, stocking up or moving out.
When it comes to all matters related sustainability, plenty of doubts remain about the U.K.’s post-Brexit future. One of them involves the circular economy. Like many countries, the U.K. already has its own waste management struggles with China’s ban on waste imports. “Substantial investment in new recycling infrastructure is likely to be required,” says one observer, a tall order considering the island nation is already struggling with recycling targets. The situation could be dire, considering reports suggesting the U.K. government risks grappling with “putrefying stockpiles” of waste in the event export licenses to send garbage to the European continent expire at the end of March.
And while we’re on the subject of ditching agreements, there’s another EU commitment that could fall by the wayside with disastrous results: the drive to end overfishing by next year. Although the U.K.’s government has promised to fold in all EU environmental measures into the country’s domestic laws, Greenpeace alleges a fisheries bill making its way through the House of Commons could actually lead to more overfishing.
Some companies will temporarily shut down as they assume a hard Brexit will disrupt their supply chains. Jaguar Land Rover recently announced their U.K. factories will tack on another week of a production “stand down,” stretching that period to mid-April.
The good news – there could be a short-term economic stimulus as the Brexit deadline nears, as the evidence suggests both consumers and businesses are stockpiling supplies as one way to dodge the effects of sudden changes in customs regulations. For example, Unilever, which owns the popular ice cream brands Magnum and Ben & Jerry’s, has admitted that the company is building up extra supplies of ice cream that will last several weeks. Unilever is also shoring up supplies of several brands of deodorant in the event tariffs kick in. But any such stockpiling is akin to a sugar high: it will wear off fast and the lingering effects could get ugly.
Doubts over Brexit are wreaking havoc with supply chains across all sectors. The fast food chains McDonald’s, KFC and Pret a Manger last month joined dozens of retailers in warning the U.K. government that tariffs could ruin farmers. These companies also say that stockpiling supplies is no longer an option, as they have maxed out all possible frozen and refrigerated storage options.
Furthermore, the rush to stock up on supplies could threaten public health, as in reports of consumers snapping up medical supplies over fears of potential shortages. Some consumer behavior borders on the extreme, with one example being the 48% Preppers for Families page on Facebook, which shares advice for coping in a post-Brexit world that ranges from food storage tactics to identifying wild edible plants. Nevertheless, consumers have plenty of reasons to be concerned about their post-Brexit reality, with one reason being that prices for generic drugs continue to increase.
Don’t expect the U.K.’s Premier League to be stockpiling on players, however. The league’s world-class soccer clubs, including Manchester United, Chelsea and Arsenal could find it hard to attract top talent as the pound keeps losing value against other global currencies.
The numbers are grim: a recent survey suggested that as many as one-third of all businesses based in the U.K. are considering some type of a move abroad, from shifting some staff to a complete relocation.
The U.K. market analytics research firm GlobalData concluded earlier this month that many tech companies are ready to join the Brexit “exodus” and relocate elsewhere in the EU – Ireland alone reportedly claimed 55 such Brexit-related investments that generated 4,500 jobs last year.
Other companies may not be moving personnel, but are moving their international or headquarters out of the U.K. Sony, for example, announced its European headquarters is moving to Amsterdam.
One U.K. company that dates back to the 1837 isn’t moving its headquarters but is ditching the Union Jack. P&O, which operates six ferries that cross the English Channel, plans to replace the U.S. flag with the Cypriot flag in order to salvage its EU tax benefits.
Image credit: Giuseppe Milo/Flickr
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.