Bill Jamieson: Secret report makes you choke on the canapes

Stuck for places to go for free wine and canapés on the corporate circuit this summer? Worry no more: stand by for the breathless summons to the 'Must Attend' Brexit Consequentials seminar.

Enjoy the nibbles, but the latest spate of seminars will generate more heat than light
Enjoy the nibbles, but the latest spate of seminars will generate more heat than light

If you’ve already missed the first flurry, don’t panic. Invitations to breakfast/lunch/evening Brexit sessions will be clogging your email inbox. Morning bacon rolls, pre-dinner canapés, stewed coffee and lukewarm wine will soon be shooting out of your ears.

Post-holiday conference slots this autumn are filling up rapidly. Accountants, lawyers and wealth managers have been quick off the mark. Experts have been snapped up and Power Point presentations made ready. In fact, you may already have been drafted in as a speaker or panellist to sit on your company’s Brexit Consequentials Strategic Advisory Panel.

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Don’t let lack of knowledge be a barrier to acceptance. For if there’s one defining characteristic of membership, it’s that nobody knows. And beware of those who think they know: events will almost certainly overtake them.

Make sure, at least, that you’re properly kitted out even if you have nothing to say: the smart outfit; the distressed leather Armani business bag with laptop holder; multi-compartment document wallet; fully charged mobile; large Moleskin notebook; pocket-sized aide memoire pad; brushed titanium Lamy pen; a stack of business cards – and a clip-on wine glass holder.

Make sure you’re seen, but however strong your opinions, be discreet with them. So quickly are events unfolding and the business landscape changing, any certainties you may have are likely to be shaken by the time your presentation comes round. Your best hope is that the speaker before you overruns drastically and you’re stood down for the Q&A session: cue to glide quietly towards those canapé trays.

Some organisations have already committed their Brexit thoughts to paper. In today’s febrile atmosphere this is not best advised. For example, I have obtained an internal Scottish Enterprise document circulated last week among senior managers declaring the consequences of Brexit for the Scottish manufacturing sector “to be overwhelmingly negative”. The 15-page analysis, which is not intended for publication, sets out a wide range of political outcomes. It is a deeply depressing document.

Now there is every reason for apprehension and uncertainty. Business confidence has been badly shaken. There is a political vacuum. The pound has continued to weaken to hit a 31-year low.

A GfK survey last week reported a post-Brexit vote plunge in consumer confidence. It said: “Sectors like travel, fashion and lifestyle, home, living, DIY and grocery are particularly vulnerable to consumers cutting back their discretionary spending.”

Business investment decisions have been put on hold and merger and acquisition activity has stalled.

The SE paper carries an estimate from the Centre for Economic Performance that under the “optimistic” Norway model and the “pessimistic” WTO, “trade will be negatively impacted by Brexit in both the short and long term. It also quotes from a PwC study commissioned by the CBI projecting a decline in GDP per capita of up to 2.7 per cent by 2030.

Now there are several problems with all this. First, we have not yet invoked Article 50, never mind arrived at a negotiated settlement. We just do not know what an EFTA/EEA membership settlement would mean for the UK and for business.

Second, the credibility of long-range forecasting has come under searching question. If neither the Treasury nor Scotland’s own Fraser of Allander Institute can get GDP forecasts right over one year, what credence do we place on forecasts stretching out over 14 years?

Third, the SE projections lightly dismiss the benefits to exporters of the fall in sterling against the dollar and do not consider the combined effects of lower interest rates, fiscal easing and a cut in Corporation Tax.

Finally, the contours of the business environment are changing almost by the week and with them the assessments of Brexit consequentials. How long, for example, do we foresee consumers postponing spending on “travel, fashion and lifestyle, home, living, DIY and grocery”?

The SE document goes on to set out various political scenarios. The least damaging for Scottish manufacturing is judged to be a second Scottish independence referendum, a resulting Yes vote, Scotland fast-tracked into the EU and between 2018 and 2025 following “the normal accession path”, presumably agreeing to protocols for membership of the euro.

While this may be the scenario most favoured by the Scottish government, it is by no means clear that this would be equally favoured by manufacturers – either because of the further uncertainty of an independence referendum or the end result in terms of currency, considering that by far the bulk of Scottish exports is to the rest of the UK rather than the Euro area.

It would be interesting to know what manufacturers think. But we may never know, because this, as I stress, is an internal SE document for senior officials and not meant for publication.

In the meantime, business attention will focus this week on the scheduled meeting of the Bank of England’s Monetary Policy Committee. This is widely forecast to result in a cut in interest rates to 0.25 per cent. Further Quantitative Easing may also be on the way this autumn.

Both of these, particularly if accompanied by a commitment to cut Corporation Tax to 15 per cent (Chancellor George Osborne has already pledged to reduce it to 17 per cent) should help lift business and household confidence.

And they would almost certainly do so more than any number of those earnest “Brexit Consequentials” seminars now getting under way across the business world.

Pens and notebooks at the ready, please, to take copious notes. But they may be out of date before a second jumbo notebook becomes a “must buy” this autumn.