On 24 June the British public voted to leave the EU. Since the decision, much of what has been said in the media, political debate and general thought leadership has focused heavily on uncertainty. But what are the certainties, if any, that we can draw from the result of the referendum?
The doubt surrounding the UK’s decision to leave the EU, on both practical macro and micro economic levels, does indeed have the very real danger to result in economic paralysis. Any one of the above open questions makes a good reason to delay many operative, let alone strategic decisions. Better to be safe than sorry is a very simple, but also attractive logic.
But the - let’s not do something now that we don’t know, but might, cost us later – notion is certainly sage advice in some areas. With respect to the current UK economy however, is it not only incorrect but also potentially detrimental. Modern capitalist economies need to grow to survive and an intrinsic part of the growth is, and always has been, change. No successful economy is ever static.
Change is a constant in any economy and why both the adage ceteris paribus is the economists’ best friend and also why most economic forecasts can also prove, with the benefit of hindsight to be so wrong….However, to invoke yet another old and overused adage...With change comes opportunity. As a result, simple inactivity and delay, is an obvious deterrent to economic growth.
Hence applying these conflicting maxims to our current Brexit position, as we stand, we only have two absolute knowns.
1. First, that the definition and implementation of a post Brexit UK economy will take some time. How long or short, no one knows.
2. Second, but more positively, while we don’t currently know the answer to either elements of the first question, we certainly do know, and have great knowledge of and experience with, the key elements of our current economy. Moreover and most importantly, we also know that those elements are not, unlike our Prime Minister, about to change overnight!
In other words, these combined dual elements of both uncertainty and certainty represent the only real certainly that we currently have! Given this position, there is a very strong argument that for both for the sake of our economy and to aid the Brexit negocation process, however long it proves to be, we need not to simply wait and see, but rather ensure we act.
For the sake of the economy, we should be pushing now for greater and not less levels of activity. Apart from the very obvious benefit of fuelling economic growth, wealth creation and employment in the short term, any such period of increased activity would also have the very beneficial effect of assisting the argument for preserving and grandfathering whatever basic regimes, regulations and principles which such activity depends. The hugely beneficial nature of such influence to the forthcoming Brexit negotiations is obvious.
To use but one example, it will be difficult to be taken seriously if you attempt to argue, at any level, that a basic freedom of trade or tax regime or regulation must be preserved in a post Brexit Britain. This is true particularly, if you have allowed your fear of the current state of uncertainty to stop you from taking advantage of that exact same condition during your normal course of post referendum trading.
Or more simply, and in the form of the modern must have sound bite, “use it or lose it” should be on forefront in all our minds now and over the next few economic quarters!
It is in this way that we can help give our leaders the necessary economic and political support to aid them in achieving the best possible post Brexit outcome for the UK.
By Simon Murfitt, asset finance lawyer at Keystone Law