Brexit: John Lewis and Siemens warn government
FT Whitehall editor James Blitz looks at the mounting frustration of leading UK companies - Siemens and John Lewis - over the Brexit process and the UK's future trading relationship with the EU.
Filmed by Matthew Brown. Produced by Josh de la Mare. Additional producing by Timothy Conley. Images from Getty and Reuters.
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There are fewer than 300 days left before Britain leaves the European Union, and British business leaders are becoming increasingly concerned about the lack of clarity that's coming from the government over precisely what terms there will be when the UK departs in March 2019.
Here behind me in parliament, debates are continuing about the nature of the departure, and particularly around the question of whether Britain should leave the customs union, and what it's relationship should be with Europe's single market.
At an FT Live Conference, we were able to hear the views of a number of business leaders on either side of the debate. There was Juergen Maier of UK Siemens, Charlie Mayfield of John Lewis, and then on the other side representing much more of the Brexiter view, John Mills of the consumer exporting company JML. Here's what they had to say.
I just think we're at a crunch point, and I think we, very fast now, need to know what the alternative customs arrangements are going to be. We will be supportive of any of those which are practical and sensible, but if there aren't any that can be made to work, our position is clear, we remain in the customs union.
At the moment, if we import salad leaves from Spain, for example, they can be on the shelves with five days shelf life because we have frictionless borders. If we had to impose plant and animal inspections on those products, that would take as much as two days out of that shelf life, almost half of that shelf life. And that's just one small example. There are many others, and this would magnify across the economy in a pretty dramatic way.
Well I think the problems about the customs and the border are very easy to exaggerate. The paperwork that you have to have if you have either free trade agreement, or WTO rules compared to free movement, are not all that different. The customs procedures are a little bit more complicated, but with goodwill, an expenditure of money, not a huge amount, and with modern technology, I would've thought these problems really ought to be solvable.
We actually already tell customs what's going to be passing the border before it passes the border. The problem is that we are a large company and we can do that, but the truth is that what moves across the borders is actually products from lots of very small companies who haven't set those processes up. And to set those technology processes up will take a very long time, and much longer than the time we've got left to sort out what the arrangements need to be.
This whole debate has been the most political that we've seen in a generation. And I think, frankly, that the political heat of this debate is getting in the way of sensible pragmatic approaches to secure the best future for the UK.
I think, looking ahead, Brexit is not going to be such a big deal as a number of other possible things that could happen. Depending on what economic policies internally the UK adopt, or what might happen in the outside world with Italian banks, with the eurozone, with what's happening in Saudi Arabia, North Korea, I think there are lots of external threats and internal possibilities, which are going to have much more influence over the way the economy goes than Brexit will.
There is an increasing frustration quite frankly. And I think people are going to be raising the temperature on really wanting to know what the practicalities are of us being able to continue to do our business efficiently here in the UK.
The big question in the next few weeks and months is going to be the extent to which the UK government, Theresa May on the one hand, and the European Union on the other, are going to be able to compromise to get some kind of deal. If the British are prepared to make further moves, saying that they will be long term members of a customs union, that they are prepared to have regulatory alignment in goods within the single market, prepared to accept the rule of the European Court of Justice in those areas, and pay a bit more money to the EU, then I think there could be room for some kind of deal.
But on the other hand, the Europeans are going to have to accept that there will have to be, perhaps, some compromise on what they call the indivisibility of Europe's four freedoms. The one thing I do know is this: it's going to be very, very late in the day before we know the answer to that. And the people we've seen in that film are going to have to wait until November, December, perhaps even January next year, before they definitely know that we have avoided the outcome of no deal.