26 July 2016

Brexit: What happens next

I talked briefly at the BPIF AGM about the BPIF's position following the referendum result. Just to recap, our survey of members prior to the referendum indicated a clear preference that remaining within the EU was the preferred business outcome, although 27% felt the opposite, while 24% were undecided.

In any event, the UK has chosen to depart from the EU, and in the words of our new Prime Minister, "Brexit means Brexit".  At the BPIF, our approach to public affairs and government policy issues is advised by our Government and Industry Committee, comprising 11 members.  Our last meeting was on July 1st, immediately prior to the AGM, and during the period when we knew that David Cameron was stepping down, but before the composition of the new Government had become clear.

The G&I Committee is an essential means for the BPIF to ensure that its approach to important legislative issues is aligned with member needs, and we naturally discussed Brexit at some length.  Our approach is firstly to ensure that we have a good understanding of the impact of Brexit on member businesses, secondly, to identify the priorities that we need to push for as we enter the new post-EU membership period, and thirdly, to consider the best way to ensure our sector's needs are recognised as policy is decided.  Each of these stages is more important than ever as we enter into a period of such significant change.

Our Outlook surveys are an extremely important tool in helping the BPIF understand sort term changes in business expectations.  Individual company experiences feed into an overall picture of what's happening in our diverse sector, and, we in turn feed this information into Government and other industry representative bodies such as the CBI, where the picture across different sectors is aggregated.  It's become increasingly clear to me since joining the BPIF, just how important these qualitative "opinion" surveys are, in supplementing the statistical analysis that the Government and Bank of England undertake.

We are also planning a more detailed "Brexit Specific" survey, which will be undertaken in early September, once the Summer vacation period is over, and the new Cabinet have had a little more time to get to grips with their new responsibilities.  We will use that to further inform both our assessment of the impact of the referendum, and to tune-up our views on what our sector needs from the negotiations as we move towards triggering the 24 month Article 50 exit process.

We will continue to assess member needs, but, as identified on Members Day, our requirements will include steps to address the productivity gap that's so clear relative to our peer group economies.  For this, support for investment in skills and equipment makes sense, as part of an overall industrial strategy that enables a highly efficient and productive manufacturing sector.  I also identified that, as a "bellwether" industry, we want to ensure that addressing the underlying concerns that lead to the exit do not damage our economy - notably, continued tariff free access to the EU's markets will need to be very carefully balanced against steps to control the movement of labour.

We are already working closely with the CBI, the EEF and other trade bodies to ensure that the voice of industry is heard loudly and clearly within Government, and that our message is as aligned as possible with like minded sectors, to ensure it has maximum impact.  My personal hope is that, rather than negotiating some kind of Brexit-lite, EEA-Lite, or similar, each of which implies giving up things that we have and like now, instead a clearer vision of how Brexit enables a stronger, more vibrant, engaged and inclusive UK will emerge.  After all, that's presumably why we're going down this road at all.

Charles Jarrold
Chief Executive, BPIF