Martin Flanagan: Workers and suppliers in Brexit firing line

Martin Flanagan says suppliers and employees are feeling the squeeze ahead of the UK's departure from the European Union. Picture: Neil Hanna

It is not the law of unintended consequences, as there was much shadow and stridency beforehand. But last year’s Brexit vote has already had ramifications.

Two new surveys suggest many British businesses are to bear down on their suppliers as a result of the referendum, while employers are also planning to give staff the lowest pay rises in three years just as inflation is taking off again. It might be called the business equivalent of referred pain, or more colloquially, the beatings will continue until morale improves.

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Both recent surveys, from CIPD, the professional body for personnel bods, and the Chartered Institute of Procurement & Supply, were predictable.

In terms of pallid wage rises, Britain’s productivity – for which read efficiency – issues are well known. On top of that, business has been hit with extra non-wage costs such as the apprenticeship levy, pensions auto-enrolment, higher energy bills and business rates.

As a result the higher inflation, tight labour market and so higher wages default model is not happening this time. Meanwhile, on the supplier front, who ever really believes the corporate guff about companies’ close relationship with their suppliers?

From supermarkets to engineering, he who pays the piper calls the tune, and even in the good times many businesses’ first instinct is to cane their suppliers to keep the costbase low and pour encourager les autres.

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So when times are more uncertain than for a generation with Brexit, who is really surprised that the Cips report says nearly one in three UK businesses using EU suppliers are looking to replace them with UK suppliers?

And that more than one in three say a key part of their response to Brexit will be to “beat down supplier prices”. It puts a different spin on the we-are-all-in-it-together schtick. Yes, up to our necks.

Dangerous times online

Hospitals, transport networks and disrupted businesses have all been hit by the latest cyber attacks. Shouldn’t the internet matrix be simply acknowledged as putting all our security eggs in one basket?

Pen and paper was dull but not this dangerous.

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