Going for growth in the face of uncertainty

Here Ward Hadaway Partner, Damien Charlton, takes a look at what companies can do in the face of such uncertainty.

Much has been said about Brexit since the referendum of June 2016, but the political debate shows no sign of abating. The politics of Brexit now seem to dominate the news, but rather than the way ahead for businesses becoming clearer, things seem to have become ever more uncertain.

Anyone that has been following recent developments will now be familiar with parliamentary processes such as ‘prorogation’. Profound questions about our constitutional arrangements have been tested in the Supreme Court. We’ve even been introduced to the concept of documents that are referred to as ‘non-papers’.

Politicians in Westminster have been arguing about basic Brexit issues ever since the referendum result, which was now over three years ago. These questions about the nature of Brexit are going to be with us for a long time to come. After all, much of the political machinations over the past year or so have not been about the long term trading relationship between the UK and the EU, only the exit deal.

It’s rather sobering to remind ourselves that the much vexed question of the Irish backstop is only part of an arrangement intended to apply if we can’t reach agreement about the long term, and the detailed discussions about the long term relationship are yet to come.

If we leave without a deal, much of the context of the transitional arrangements will still have to be addressed to enable us to continue to deal with the EU in the short term.

The outcome of current political wrangles and the terms of any future trade deal between the UK and both EU and non-EU partners could potentially have a huge impact on our economy regionally and nationally. Unfortunately, a state of uncertainty about the future has, for the time being at least, become the new normal.

Nobody has a crystal ball, and the debate appears to have become more polarised than ever, so how should businesses prepare themselves? That is a difficult question to answer. As negotiations have ebbed and flowed, and deadlines have come and gone, it’s not always been clear what businesses should be preparing for, or indeed when they should expect it to happen.

Somewhat self-evidently, the default is that we will leave without a transitional deal unless an agreement is reached. Whether this could happen at the end of October, or another extension will be sought or granted, has been hotly debated. Given the extent of legal and economic integration that has occurred during the UK’s membership of the EU, planning for this sort of ‘no deal’ scenario spans a broad range of issues.

Most businesses will have already considered their contingency plans in the run up to the date last March that was set for our departure from the EU. Such plans generally include several important areas, such as potential delays and disruption to supply chains, the impact of customs duties and tariffs, and whether steps need to be taken to mitigate the risks of currency fluctuations.

Businesses have had to learn to live with current political and economic circumstances – and the Fastest 50 list shows that many have risen to the challenge magnificently and continued to deliver consistent growth. We’ve seen a combined total increase in turnover of the 2019 Fastest 50 over the past three years of £714,323,000. We can also see a total combined turnover of the North East Fastest 50, 2019 of £1,834,496,000 which is hugely encouraging.

Their success is to be celebrated, but to sustain growth, businesses will need the confidence to invest. Companies across the region will be hoping for more clarity about the future to help them make the decisions that drive growth and deliver the results that will catapult them into the Fastest 50 lists of years to come.