Brexit Briefing April 2019

Author Gustave Doré

"Day after day, day after day,

We stuck, nor breath nor motion;

As idle as a painted ship

Upon a painted ocean"

Jane Lambert

In the first paragraph of my January Brexit Briefing 5 Feb 2019 I set out four possible scenarios for what could happen before 29 March 2019. The one that occurred was the third of those possibilities:  an extension of the notice period first to 12 April 2019 (see Extension of Art 50 (3) Notice Period 27 March 2019) and subsequently to 31 Oct 2019 (see European Council Decision of 11 April 2019 extending the Period under art 50 (3) of the Treaty of European Union to 31 Oct 2019 11 April 2019).

The uncertainty from which there has been something of a lull since the second extension has been at a cost.   Businesses fearing delays and increased costs in the event of the UK's departure from the EU without a withdrawal agreement stockpiled raw materials and components leaving fewer resources for anything else.  IHS Markit manufacturing purchasing managers’ index dropped from 55.1 to 53.1 in April and demand for exports fell as customers sought alternatives to British suppliers (see IHS/CIPS news release of 1 May 2019).

Uncertainty as to whether the UK will depart from the EU at all and if so on what terms is naturally unsettling for business but that does not require everything to be put on hold. There are opportunities for British business regardless of what happens with brexit. Only last week, heads of state, heads of government and senior ministers met in Beijing for The Second Belt and Road Forum.  I first mentioned the One Belt One Road project in The Shanghai Cooperation Organization on 9 Sept 2017. It is a massive transport infrastructure project to link China more closely with the rest of the world.  As such, it will provide unparalleled opportunities not just for British construction companies and manufacturers but also for the UK's banks and other financial and professional service providers.

The climate change protests in central London and Edinburgh and the visit of Greta Thunberg to the Houses of Parliament have raised public awareness of the need to reduce carbon emissions drastically in the next 30 years.  This will require changes in transportation, housing, agriculture and many other fields that will provide opportunities for enterprising and innovative British companies. This is not the time for industry to cut back on R & D and marketing but to expand it.

Anyone wishing to discuss this article or the legal issues to any of the topics mentioned in it should call me on 020 7404 5252 during office hours or send me a message through my contact page.