Back to Brexits
I've been involved with a variety of Brexit projects since mid 2016, all of them are effectively Scenario Planning combined with some good housekeeping due to the absolute absence of any sense of direction or a clearly stated objective from negotiators or political leaders.
I thought I would share the main scenarios that I'm working with right now to see what feedback LinkedIn members might offer on the likelihood of these or, other outcomes that businesses might be planning for:
Scenario One: “UK Does not exit.”
In the current climate, this would be politically difficult and currently therefore seems unlikely but, some experienced commentators believe it possible. Should there be a decisive second referendum on whatever deal is negotiated, this would of course be back in the mix. In a recent opinion poll, 47% of UK voters believed that the Brexit decision was a bad one and 42% believe it to be good.
Scenario Two: “A (long term) transitional arrangement.”
This currently seems the most likely of outcomes and, whilst it would have it’s opponents, may prove the most expedient outcome politically (and the only workable one practically). The main priorities of the Brexit lobby are for the UK to take control of it’s laws, borders and money; this solution could potentially go some way towards this call whilst allowing a continuation of bilateral trade and commitments for a period of years.
Scenario Three: “EFTA style agreement.”
This type of agreement would see a Norway / Switzerland type agreement with preferential and simplified trade arrangements but not the frictionless trading currently enjoyed from within the EU. This would be a significant change for UK businesses currently trading within Europe and should not be taken lightly.
Scenario Four: “Canada style FTA.”
A Canada style free trade agreement could be developed (although the Canada deal was over 15 years in the making.) Both Scenario 3 and 4 would require the UK to adopt some form of framework to replace Existing EU FTA’s and schedules for trade with non EU countries.
Scenario Five: “Orderly exit without a deal.”
You may hear politicians referring to returning to WTO rules, this would be a challenging situation for both the UK and the EU it would involve a complete rebasing of all of our international trade. Trade tariffs and schedules would need to be re negotiated on a bilateral basis and the process would be immensely complex. In this scenario, higher tariffs and a degree of disruption would seem inevitable.
Scenario Six: “Disorderly exit without a deal.”
Politically and hopefully, the least likely outcome. In this scenario, there would be significant disruption to trade and a material economic impact on both the UK, the EU and wider economies. There may be a reduction in consumer and business demand as businesses conserve cash amid the uncertainty. Physical disruption would presumably be temporary but it would be material and businesses may find it necessary to prepare contingencies to position stock in key markets to maintain continuity of supply.
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2 年Steven, thanks for sharing!
Chartered Accountant
6 年Thanks Steve, you've covered a lot of bases there. Personally I think 2 is most likely, although there is growing pressure which might take us to option 5! There are no quick fixes when it comes to Brexit, I can't imagine that many "leavers" had given too much thought to the practicalities and logistics of exit. Too many buses making sweeping statements and not enough detailed planning.
passed away on September 2023
6 年Thanks Steve, an interesting assessment, one I totally agree with. My concern at present is around "which Scenario" is the most likely?!?! Personally I feel that (today) 5 or 6 are more likely, but with every passing day this opinion changes, we just have no clarity from the government! For 18m the procrastination has dragged on, I am surprised by the number of businesses I hear that have not considered any (or only done limited) planning waiting for guidance from government - have you heard the same? I feel that at least some planning for each of these 6 scenario's should be in place - do you agree?