Negotiating Brexit. Identifying the upsides, downsides and new market opportunities...

Over recent months, MTM has written and spoken a great deal about the Brexit campaign. It was disappointing to see how badly both side communicated the facts, the risks and the potential benefits of their positions and how the campaign strategy of attacking their opponents, rather than informing and persuading the electorate, led to voters confused about what they stood for.

Now the vote is history and we are left with a real conundrum. The UK voted leave.... it was clear that 37% of voters in the majority didn't want to stay in the European Union. That sounds simple, but for negotiators, it's not!

It raises the real issue of what we actually DO want...That is a big headache for those have to define the new vision for the UK and our route to achieve it.

The rainbow coalition of the Leave camp stretches from the political far right, across a spectrum that includes those simply protesting at David Cameron, through those with a nostalgic glow for the last days of the British Empire and its trading routes and onwards into those who were simply confused as to what they were voting about.

For the government's new negotiators tasked with Brexit, it gives them the the very real problem of what to negotiate FOR.  

All negotiators need to know the starting point, the must haves items, the nice to haves and the not bothered/don't care points. They also need to properly assess the risks/rewards of taking in any given starting position.

Without a clear vision of what they want to achieve - and in the case of the Brexit leave campaign, what the acceptable end-game is supposed to look like, they can't aim for a specific outcome or balance their negotiations to achieve the best result.

Then, the danger is that whatever negotiated settlement is brought back to Parliament, and potentially the electorate, it will be far short of what is acceptable to the diverse views of voters who opted to leave, those who voted to stay or simply didn't vote. Without a second referendum, there is a good chance that the negotiations will leave us with a fail/fail rather than a win/win. 

Currently, the scale of the negotiating task and the potential economic impact is still being evaluated by government to see how much of our science, research,  innovation and business is integrated and financially dependent on EU sources and EU based organisations. Of course, there are also many global corporations who up to the vote in June, saw the UK as the place to be for easy access through the English speaking door into wider Europe. Their own re-evaluation of the potential impact of Brexit on their businesses and what that means for continued investment into their UK headquarters, trading and manufacturing operations may deliver some unpleasant truths about how much our employment statistics rely on wider overseas funding.  

Hence the UK government is attempting to quickly gather and analyse as much data as it can, prior to starting any firm moves towards the exit, something one may suggest is rather belated. Their work is much harder because of Mr Cameron's instruction, prior to the referendum, banning civil servants across the UK from planning for Brexit.

Now Brexit is happening, the short term benefit of a falling currency is their key strategy in making Britain stay attractive and financially competitive to global manufacturers such as the car and aerospace industries.

However for financial services and banking industry, any profits made in sterling are continuing to fall as the pound continues to slide. Such businesses, which contribute so much towards the UK's GDP, are now looking elsewhere. Hence the proposed drop in corporation tax to 18% is being dangled as a carrot to keep them interested in staying, at least in the short term.

In the face of even lower corporation tax rates offered by some other European countries who are keen to cash in on Brexit's downside and uncertainty, the current position is unlikely to be sustainable. The Bank of England will be looking hard at the impact of further currency devaluation on UK domestic inflation which will start to show even more over the next few months, in higher fuel prices, more costly overseas holidays, more expensive fresh food imports along with a potential reduction in certain types of jobs as some companies restructure to stay competitive or move overseas.  

So what can smaller and medium sized UK business do to stay afloat as the inevitable recession begins to bite? The answer is to look overseas to deliver products and services  in areas where they can charge in €uros and US$. As the pound falls, the prices charged by UK companies are becoming more and more competitive in US$ or €uro markets.

Government help is readily available through UKTI (UK Trade and Investment) and the British Chambers of Commerce. They are set up to help businesses evaluate local markets and create introductions to potential buyers. Access is easy through the local chambers of commerce across Britain and with the £ lower than for many years, UK SME's have never been more competitive. It's time to get on a plane and go and sell. For some, it may be a lifeline in the turmoil ahead.....

The MTM Centre for Leadership and Management, based in the UK Midlands is helping more and more teams from across a wide number of sectors, prepare to go out and communicate effectively about their products and services in overseas markets, pitching and presenting using English as the common language. We deliver a cost-effective way of quickly gaining specific, but vital skills to increase impact and ensure clarity across the cultural divides and barriers that exist when you enter overseas markets.

To find out more about high impact coaching for overseas sales individuals or their teams, email or call 01386 859664