It’s in the rules

With Brexit promising to drag out longer than the US Presidential elections and our media and politicians already beginning to generate high levels of vitriol, it is worth taking a step back and looking at Brexit from a slightly different perspective.

Brexit is essentially about deciding which set of rules we are going to adopt. Unfortunately we can’t unilaterally decide which set of rules we are going to follow as we still want to trade with the European Union (EU). The EU works on the basis that the more a non-member adopts its directives and guidelines the more access it will typically get.

Businesses with highly-integrated supply chains within the EU like carmakers, aerospace manufacturers or pharmaceutical firms would probably prefer a so-called ‘soft Brexit’ which involves us remaining a member of the Customs Union. However, this is a poor option for the UK as we would be unable to strike our own international trade deals.

Furthermore, as the UK is unwilling to accept the free movement of people, it is likely that British based companies will only be allowed limited access to European markets. This means that those businesses who offer cross border services such as financial services and cloud computing will have to relocate some of their operations abroad.

Finally, for those businesses who rely on the UK’s flexible labour market to deliver services, the implementation of work visas will cause a headache. It will take more time to fill positions as businesses will have to show they have exhausted local sources of labour before being allowed to recruit from overseas.

Adopting a new set of rules can be challenging under any circumstances and it is even harder when some of those rules are subject to negotiation. However, by looking at Brexit in terms of the underpinning rules, it is possible to map out a set of scenarios that can help to externalise organisational anxieties.