The late Denis Norden made his name with his phrase ‘it’ll be alright on the night’. Each morning for some weeks and months now many of us wake in the knowledge that March 29th 2019 is one day closer, each evening we go to bed thinking.., but ‘it’ll be alright on the night’.
Whatever colour political rosette one wears upon the lapel in these times it is simply an unacceptable political situation. The uncertainty and corresponding frustration of the business community surrounding the nature and extent of the UK’s economic relationship with the EU and the wider world in fact is now palpable. I spoke at the Oxford Farming Conference in early January about the Palace of Westminster being a tank where the fish are political lunatics. Six weeks on one is tempted to say that such a statement is a bit harsh on goldfish.
It is remarkable that five or six weeks away from the UK’s exit from the EU, at the time of writing, that not a single person in these Isles knows how matters are going to pan out in our wider economic relations. For businesses this is a real concern, particularly for those that are importing components or selling goods to the EU. One can plan for certain things, as many firms have done so with stockbuilding, but in fresh and short-shelf life food products in particular the capability and capacity to cost effectively plan in the face of such major uncertainties is nay impossible.
“It is remarkable that five or six weeks away from the UK’s exit from the EU……not a single person knows how matters are going to pan out in our wider economic relations”
Food businesses do not know whether or not tariffs and customs controls will be applied from April Fool’s Day. Ministers’ go from pillar to post on tariffs whilst the movement of goods across our international shores is a bit of a minefield to say the least. Logistics firms sit at the moment with mind-boggling confusion about how their vehicles may, or may not, move across the Irish and North Seas, never mind the English Channel.
A hungry nation is a dangerous thing and the political powers that be know that. Equally though supermarket bosses, food manufacturers, farmers and logistics providers sit and watch with horror as to how an orderly food market will progress in April if there is a ‘no deal’ scenario. The scope for material food price inflation and even potential shortages of certain foodstuffs, noting that I do not expect empty shelves to be the normal, largely because of the ‘it’ll be alright on the night ‘ syndrome, cannot be ruled out as can the growing likelihood that the 29th March maybe abandoned as an exit date, with a can kicked down the road.
Against this backdrop businesses may be keeping an especially close eye on their costs and cash flows. Small food companies in particular may need the support of a banking system that failed them badly in the last financial crisis should supply hiatus’ emerge, from the funds to build up stocks to the need to carry higher costs without necessarily receiving payment and recovery first.
In this respect the sun will shine on April’s Fool’s Day and thereafter but an extra level of tactical nouse and agility could also be the order of the day for food companies in particular. Talking to suppliers and customers may also be a virtue so that over-planning and incurring unnecessary costs, rests alongside avoiding any obvious hurdles and barriers to trade.
“Small food companies in particular may need the support of a banking system that failed them badly in the last financial crisis”
I wish all businesses well in this chronically ridiculous situation when all of the small-minded Members of Parliament swimming in the Palace of Westminster pool should hold their collective heads in shame. The ‘National Interest’ is an anathema to them all from the incompetent Prime Minister to the shameful Leader of the Opposition, the revisionist retainers to the rabid Brexiteers, whether Ulster, Welsh, Scottish or English.
Quite what the future holds for this ‘nation’ remains to be seen. The 29th March is a day that will come and go, thereafter one senses that the political class will remain a source of instability and uncertainty for the business community; therefore a total failure of government and parliament.
Accordingly, at the end of the day, let’s hope ‘it’ll be alright on the night’ and that more stable and brighter times can be ahead. To this end I wish you all well.
Dr Clive Black
Advisor to Coriolis Consulting