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Preparing for the unknown

Dec 17, 2018
David Carson says planning for maximum change should be the priority for Irish businesses.

‘Brexit means Brexit’ has one fundamental flaw: it means different things to different people. It is complicated further by the fact that, for many people, as they grasp the evolving details, it means something different today than it did on 23 June 2016. 

The unknown

Negotiation of the Withdrawal Treaty was supposed to be the easy part. It has proved anything but easy. Recent events in London demonstrate the challenges facing anyone trying to understand Brexit, how it will eventually play out and when we will have certainty. Predictions on this later point have at least one common feature – they have all been wrong.

What is clear is that when the UK leaves the EU, the conditions in which Irish businesses trade with the UK will change, and those changes could be significant. The nature and timing of the changes are unknown. Businesses operate on a daily basis in an uncertain and disruptive environment. It is the degree to which Brexit adds to that uncertainty and disruption that is a cause for concern. I suspect that the hidden cost of Brexit to date has been significant for very many businesses and they haven’t even left the EU yet.   

The ongoing, some might suggest, increased level of uncertainty has discouraged some businesses from taking action. Encouragingly, in a recent survey of Irish CEOs carried out by Deloitte and Enterprise Ireland, almost seven in ten (68%) said that they had acted to mitigate against the potential impact of Brexit. The 29 March 2019 is fast approaching and many false dawns have come and gone. Even if the Withdrawal Agreement is agreed – and at the time of writing this is by no means certain – there is likely to be significant elapsed time before there is clarity on a future trading relationship between the EU and the UK. In summary, it is imperative that organisations assess their level of exposure and plan on the basis of maximum change.

How to prepare

It is important to understand the potential areas of exposure and risk for your company. Plans need to be made for disruption. Many businesses are considering measures to ensure that they have adequacy of supply and stockpiling features high on most agendas.

Here are the business issues that may be impacted by Brexit:

  • Trade and supply chain;
  • People;
  • Tax, systems and data; and
  • Regulation and market access.
Within these areas, a number of key questions should be considered:

  • Are any suppliers based in the UK? And, if yes, have you contacted your key suppliers to ascertain whether they are Brexit ready?
  • Could the movement of your imports or exports be delayed by border controls and what impact would that have on your supply chain? 
  • Could your trade be subject to tariff and non-tariff barriers?
  • Are any customers based in the UK?
  • Do you hold data which relates to the UK?
  • Are the goods or services which you provide regulated and by which regulatory bodies?
The Irish people have proven to be resilient in the face of challenges. That trait will continue to be tested by Brexit. The referendum in the UK has proven to be more divisive than decisive. Irish business needs to respond to the unprecedented challenges by planning for maximum change. 

David Carson is the Brexit Lead in Deloitte.