It seems unlikely there will be a solution to the current Westminster situation that will give the stability or certainty that businesses would have wanted going into the Brexit negotiations. Indeed, a post-election Institute of Directors member poll resulted in 92 per cent showing concern about the make-up of the Government.
It is also possible that we will see another election in the not too distant future. This would discourage business investment: 76 per cent of our members believe political uncertainty is a concern. It is particularly troublesome for Scotland, which has, over recent years, been the land of the referendum/election.
It does seem that a second independence referendum is further away, so that might refocus attention on economic growth, which would be very welcome.
The business line in the last few years/months/weeks has been about certainty – but it seems the only certainty is that there will be none. Business as usual is but a memory, the future will be made of something very different. Whatever deal is struck, the UK’s political future won’t be plain sailing.
Asked to choose which three areas of the Brexit negotiations should be prioritised, 58 per cent of our members chose rights and entitlements for EU citizens in the UK and vice versa.
In joint second, negotiating an early agreement on transitional arrangements and securing ‘zero for zero’ tariffs were chosen by 38 per cent. This is when leadership will come to the fore. If it’s not a great moment for politics, or planning, or certainty, it’s certainly a good time for leadership. Skilled leaders take cognisance of and develop responses to major challenges; they shape strategy in the face of change; and they lead their teams through to the end goal, creatively navigating bumps in the road.
Whatever the final outcome of the Brexit talks, innovative and resilient companies in Scotland, and across the UK, will continue to develop new products and seek new opportunities. It’s time to put narrow politics behind us, and recognise that Brexit is a major UK-wide endeavour. It’s in everyone’s interest that we build a new partnership with the EU which prioritises trade, jobs, and UK prosperity. Businesses can and will adapt but they must be given time, so transitional arrangements are essential.
This is also a time for politicians of all parties to show genuine leadership and what they can – and can’t – do to support and grow the economy. Both governments must focus on proposed industrial strategy and try to keep business costs and taxation down, opposite to recent years of increased pension costs, apprenticeship levies, living wages and business rates. These changes are having an impact to the tune of millions of pounds, affecting jobs and diminishing growth potential.
Support must be given to internationalisation, infrastructure (especially broadband), procurement and skills development.
As ever, business will thrive and survive due to the resilience of leaders, but politicians have it in their gift to make the transition easier.
David Watt is executive director of the Institute of Directors in Scotland.