What Does Brexit Mean For British Business?
Simple answer: nobody knows.
Because 1. The issue is overlaid with unreason, emotion, politics and patriotism and 2. Predicting the future is for saints and sibyls! The Left is currently shouting "We're doomed!" and the Right is replying "Freedom!"
In business, we must never assume we are dealing with rational beings. The reasonable expectation is that, yes, Britain will revert to the status it had previously: there will be visa-free travel to and from certain countries, and not others. There may be more forms to fill in and fees to pay if you post to and from certain countries. Given that China is not part of the EU, that should not affect most small British businessmen!
However, small-minded technocrats with short-term views may try to cause trouble: Britain must no be seen to get away with its 'crime' scot-free! British residents living in the EU and EU members living here may have some bureaucratic discomfort.
The British Pound will be affected, but not for the reasons you think. The Pound itself is an item of trade. People buy it, hoard it and sell it, to make a profit.
This is something that happens to shares as well. Brokers don't just buy shares because they like the company; they also buy them because they think the company is secretly a pig and are betting its shares will fall in the short term. They know that Brexit will cause movement, so, they bet on it. Nothing personal.
So it is likely that there will be an exchange-rate see-saw around the time Brexit is triggered. That's just the lads cashing-in or cashing-out.
What can you do about this?
Keep your head.
Prepare for short-term pain.
Plan for long-term profit.
Businesses which import or export to/from EU member states may experience some uncertainty. However, it seems to this writer that only a fool would wilfully put impediments to established free trade arrangements. Medium-term, trade barriers would create blow-back to national politicians from annoyed businessmen.
The only people who can freely cause upset to the Brexit process are bureaucrats, socialists and journalists whose livelihood is not directly tied to trade. More sober minds are keeping quiet. It is notable that it's not national politicians which are talking about 'punishing' Britain, only MEPs and EU Council members i.e. people with something to lose if the EU unravels.
Britain is getting out of an arrangement that, to this writer, has obvious long-term deficits and uncertain benefits. Sovereignty is king. If you can't make your own decisions independently, you're therefore at someone else's mercy. This is terrible for a man, or a nation. It is further notable that one response to Brexit from some EU worthies is threats. Another is attempts to lure City financial firms to their countries; they know the City Of London is a big money-spinner. This does not match the promoted image of European harmony and benignity.
Long-term, Britain is an offshore haven. It exists at the centre of the international date line: GMT. English is the international language of business. Britain has historical ties to most of the world's nations. Some countries applaud its current daring move. It is thus unlikely to become a pariah.
Foreigners like its stability, which they do not have in their own countries. It has its own currency, so, if you're someone with too much money tied up in your own country, you buy Sterling as a hedge. You buy British property because the crooks running your own country might take yours off you, or, just run your economy into the ground! This is partly why property in London is so expensive.
There is also the fact that being locked into a club, with delinquent members, whom you can't control, is not a good idea. Very few nations in the EU are solvent in a way our grandfathers would recognise. I'm afraid this includes Britain. It is better to leave a deal before it goes bad and then be forced to do so at a time, and under circumstances, not of your own choosing.
Disclaimer: the opinions expressed in this article represent the opinion of the writer and do not necessarily reflect the opinions of the management of Registered Address Limited.
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