Divided opinions

LEAVE

EU EXIT provides the opportunity for our country to re-balance our global trading and strategic relationships. Churchill said our place in the world was maintained by our three relationships with the USA, Europe and the Commonwealth. But in 2017 the PM sensibly added a fourth; the Rest of the World. The PM has wished Europe peace, happiness and prosperity time and again. But let us never doubt this country's brilliance. And our brilliance will shine and illuminate Europe as it always has regardless of the form of its future relationship with the EU.

Her Majesty's Government is "in front of business" for the first time in 25 years. More strategic thinking is being done by HMG now than at any time since the Cold War ended and the “miracle of the 20^th century was created in the Good Friday Agreement. EU Exit is providing a focal point for new thought.

Bright future

Our future is bright if we have confidence. And it is for all of us in political and business leadership to engender confidence. Together. On EU Exit we will be the only country with two such Special Relationships. One with the USA, our key strategic ally and our number one national market – which we often forget. Another with the EU – a key trading and security one. The UK is the world's second largest exporter of services, its fifth largest exporter of goods and the fourth overall.

Global security and prosperity is a UK national interest given our trade and inward and outward investments. There is no greater influence on bringing peace and stability than a nation which wishes to bring its peace and stability to another’s without it. This is a UK strategic imperative.

But it starts with us in business, as the engine room of our economy in global trade. Working in equal partnership with Government as a shared and national endeavour to export. We look to Government to support us. But as President Kennedy once said, might now be the time when we ask what we can do for it? Our country has produced more Nobel prizes for science than the entire nation of our key competitor, which I shall not name. But its capital is Paris. 17% of every aircraft that flies above us is made here. Let us recognise the extraordinary work Government is doing to support us. And let us take this equally extraordinary opportunity Global Britain provides for national renewal. And support it in an equal and shared partnership. Have confidence in the brilliance, kindness and innovation of this - our United Kingdom. In you.

For what is there to concern us about EU Exit? Is it tariffs? Rules of origin? Ease of shipments? The first will not exceed 10% and its norm is 3%. Quality freight forwarders will deal with the rest for you. For all the economic commentary data cannot do more than suggest EU membership contributes +/-1% to our annual GDP. Worst case “scenarios” suggest EU Exit may damage our GDP over a number of years by 1% annually. Four years of sanctions against Russia cut Russia’s GDP by 6%. Are we suggesting EU Exit will damage us more than the combined weight of the West’s sanctions against Russia have? Fears of EU Exit take no account of growing UK trade with Asia, Africa, the Middle East, South America or the USA. 35% of the world’s economy comprises Asia-Pacific, forecast to be 50% of it by 2050. There is a lot of sea between us and it. In 1990 37% of the world’s population was in extreme poverty. Today it is 10%. By free trade and the basis for that is that sellers succeed when buyers see that they are “better, faster, cheaper” than the competition. The old American salesman’s mantra. What orders have you received from customers in the EU because you were part of it? Surely you won because you were all 3 of those things. If that is true why will it be different outside of it?

At a time of great import, we need to calculate the risks and imperatives. The numbers are exceptionally clear and bright in “risk-analysis” terms. No-one is dying because of EU Exit. No-one is being physically harmed. No-one is being imperilled at all. Our Parliamentary institutions are managing the “risk” against social failure. Our stability is high. Throughout our 900 years, we have faced far greater perils than in this moment, and each has shed light upon our future path. The adverse condition that some describe our current position to be is being contained within the institutions we have. Our institutions are delivering stability. Even enabling the Governor of the Bank of England to now speak of EU Exit being a UK opportunity towards a “new global order of international co-operation and cross-border commerce”. The politics of EU Exit will be clear within the next 30 days. We should be patient. Our future is utterly bright. If mathematics is the language of our universe and an equation comprises two parts joined by the equals sign, then this moment of concern over EU Exit, for it is only a moment, whichever way any of us voted, equals light.

REMAIN

I am one of many in the UK Fire Sector vocalising exasperation of Brexit and the harm that it will cause to UK Fire plc.

This piece does not quote endless macroeconomic statistics which we know can always be countered with further ‘facts’ and statistics. Instead I reach back to a favourite business academic - Pankaj Ghemawat, Professor of Business at NYU Stern School of Business, author of ‘The Law of Distance’who argues “that it is far easier to deal with nations closer to you in distance, business culture and with a shared language”.

Come what may between Britain and the EU, they are natural trading partners. The Commonwealth doesn’t come close to the EU in terms of market potential for British companies. Ghemawat, Harvard Business Review, June 2017. Ghemawat does accept that the UK’s shared cultural and historic past with the US makes business there easier than say, between the UK and Indonesia, the Philippines, Vietnam, Japan, Malaysia or indeed any of the other ‘fast growth markets’ that we are yet to sign trade agreements with.

“Phew! It’ll all be OK then!” I hear you say.

In the long run I believe it might just be. I rely on a belief that we will still trade mainly with our nearest neighbours - the EU, have measured success with The USA, South Africa and other ostensibly English speaking markets and have pockets of successful trade - despite the far flung nature and cultural differences - with countries such an India, China and Vietnam.

In other words, in the long run, nothing will feel any different.

But it will. The pain that we are suffering, the waiting, the slow degradation of our standing in the global fire market, if we are not very careful, it will feel very different very soon.

The (hopefully) wasted planning: One company I interviewed in preparation for this article estimates that the cost of planning for DDP shipment to EU customers, VAT registration in two countries and set up of customs arrangements is going to set them back close to £550,000. Multiply this across all UK-based fire manufacturers and the cost of this Brexit, just to our small sector is eye watering. This is capital that we could be investing in new developments, new machinery and new approvals to allow us to get and stay ahead of our global competitors.

Approvals are an expensive bureaucratic necessity. They act both as facilitators to trade and barriers to entry.

UK Based notified bodies become UK approved bodies after 29^thMarch, not an EU Notified Body. In this scenario, products and documentation would need to be re-marked with new EU Notified Body numbers else they cannot be placed on the European market. Paul Pope, fellow Director of the Fire Industry Association2018.

Hundreds of man hours of paperwork and tens of thousands of pounds of novation costs. For what? – to maintain our ability to sell both in the UK and Europe – something we have anyway but will be destroyed either immediately by a bad or no deal or eventually if future trading agreement negotiations go badly.

Recertifying also includes production of: new datasheets; updates to websites; product information databases; instruction leaflets; product labelling and customer files. The cost of this is immeasurable.

Several major UK-based EU Notified Bodies are yet to confirm that they can offer new certificates and files to existing UK clients...

Some will argue that the most certain route to success in the non-EU global fire market is by alignment of British (read BS EN) standards with US (UL) standards. The people making this argument are the same as those decrying the EU for controlling our laws and standards! The chances of having UL budge an inch on this is minimal, let alone the cost of approval and redesign for those UK companies currently designing, manufacturing and approving products to EN standards. The cultural, legal and historical starting points of EN and UL standards are in most cases just too far apart to allow us to hope for convergence in time to avoid long-lasting damage to UK Fire plc.

Pride in Britishness

Please be in no doubt that I am a patriot, truly proud to call myself British, but also European. I believe that we do have one of the finest Fire Sectors in the world and that we should have no hesitation in telling the world about our excellent products, fine engineering and our straightforward, ethical and honest approach to business.

Real stories are emerging from sector companies with EU citizens returning home disenfranchised with Brexit and the reduction in living standards. UK national temporary staff are replacing them who are next to impossible to manage, reduce productivity and ‘care less’ about the quality of their work. When I hear these stories I worry very much that Britain is not ready to walk the Brexit talk.

Brexit for our industry is all bad and I am among many who reject the unnecessary and damaging effects on our excellent and cherished UK Fire plc.

Carl Stephen Patrick Hunter is CEO & managing director at Coltraco Ultrasonics Limited

James Jones BSc MBA is managing director at Vimpex Limited and board director at the Fire Industry Association.