Five things we should do to prepare for Brexit

It’s just a year until we finally shrug off the Brussels shackles. Matthew Lynn outlines five last-minute preparations.

889_MW_P18_city-view
Pay them to protect land, not produce food

It's just a year until we finally shrug off the Brussels shackles. Here are some last-minute preparations.

It is hard to know how the day itself will play out. Nigel Farage and Jacob Rees-Mogg will no doubt be letting off fireworks and organising victory parades. Nick Clegg and Tony Blair will be wearing black and organising a national day of mourning. But on 29 March 2019, one year away, we will finally have left the EU. So what should we be doing in the months that remain? Here are five ideas.

1. Brace for no deal

The hardliners in Brussels have retreated a little in the last couple of months. There is more room for compromise on both sides. Even so, we may still need to walk away. That means we have to have the infrastructure in place to cope. We will need customs officers, a plan for border controls, and regulatory agencies ready to go. It might just be a contingency. But that doesn't mean it shouldn't be in place.

2. Settle on a trade policy

Do we want to be an open economy, buying what we need from the rest of the world regardless of how willing they are to open their markets to us, or do we want to impose tariffs insofar as World Trade Organisation rules allow, as the US and EU do? The row over where our passports are printed suggests there is a lot of raw emotion behind protectionism. But that needs to be defeated if the UK is to prosper because free trade will make us richer.

3. Shut that door or don't

We need to decide what to do about immigration. We won't have to keep the doors open any more. But that doesn't mean we should shut them, even if many Leave supporters think it does. The UK can carry on with high levels of immigration and, given how much our economy depends on it, probably should. But we need to make up our minds one way or another. Many businesses, especially in struggling areas such as retailing and restaurants, now rely on a plentiful supply of cheap workers. We should let them know whether that is going to continue.

4. Plan for transition

For all the scare stories, it doesn't make much difference to most of the economy whether we are in the EU or not. Exports only make up 13% of the economy, and less than half of that total is sold into Europe. A few sectors will be affected, however. The car industry could take a big hit if there are tariffs imposed between the EU and Britain. So could aerospace and pharmaceuticals. They are all important to the British economy. Money and help should be made available.

5. Hug a farmer

For all the flags and grand talk, the EU is in many ways still just a farm-subsidy board. The Common Agriculture Policy still consumes 40% of its budget, and dominates its tariffs and trade agreements. Once we are out, we will have control over our own agriculture for the first time in a generation. But what do we want? We should use the money available to protect the environment, prioritising areas of natural beauty. At the same time, we should import the cheapest food we can from anywhere in the world that wants to sell it to us. If our farmers can't compete, by all means pay them to protect the land. But there is no point in paying them to produce food that isn't economic.

Who's getting what

Northamptonshire county council, which declared itself bankrupt last month, paid acting chief executive Damon Lawrenson more than £1,000 a day. It also forked out nearly £1m over five years to DDL Consultancy, owned by Lawrenson. He has now left "by mutual consent".

The Ultimate Fighting Championship (UFC), a mixed martial arts tournament, is making a bid for a promotional multi-fight deal with boxer Anthony Joshua (pictured), which could earn the Londoner $500m and make him the richest British boxer of all time, says The Daily Telegraph.

Mark Wilson, boss of insurance giant Aviva, raked in £4.3m in pay in 2017 after enjoying a 2.5% salary hike and picking up nearly £3m in bonuses and shares. Wilson landed a total of £4.5m in 2016. The pay details come just a week after Aviva's climbdown over its proposal to cancel £450m of preference shares (see page 16).

The former boss of Micro Focus, Chris Hsu, pocketed £8.4m just months before he was forced to resign last week. Hsu became CEO of the firm last September when it paid US technology firm Hewlett Packard Enterprise (HPE) £6.8bn for the software division he had been running.

Nice work if you can get it

PricewaterhouseCoopers (PwC) one of the "Big Four" accountancy firms has been accused by the work and pensions committee of MPs of "milking the Carillion cow dry" after making £500,000 a day from its work on the liquidation of the construction group. In the first eight weeks of the liquidation, PwC charged £20.4m. The company's fees have since come down to a weekly bill of £1.4m as the number of staff working on the liquidation has fallen. A calculation shows that PwC is now charging out its time at £12,500 per person per week, an estimate not denied by the firm, reports The Times. The company will receive the money in priority to other creditors, who are thought unlikely to recover more than a token sum from the collapsed group. PwC had previously received £21m from advising the company, the pension fund and the government before the collapse.

Recommended

Brexit begins: what do the UK and the EU want from a trade deal?
Brexit

Brexit begins: what do the UK and the EU want from a trade deal?

With Brexit now done, the trade talks can begin. But who wants what from a UK/EU trade deal, and how likely are they to get it?
3 Feb 2020
Being unpopular can make life easier for companies – just ask BP and HSBC
Investment strategy

Being unpopular can make life easier for companies – just ask BP and HSBC

When you're as hated as banking and the oil sector, it doesn't take much to pull off a nice surprise. John Stepek explains what that means for investo…
27 Oct 2020
Is London’s office market a bargain?
Property

Is London’s office market a bargain?

Private-equity groups are swooping on London’s property companies, which are trading on steep discounts to net asset value.
23 Oct 2020
Big spending government is here to stay – just ask Rishi Sunak
UK Economy

Big spending government is here to stay – just ask Rishi Sunak

Governments around the world are splashing huge amounts of cash as they do “whatever it takes” to prop up their economies. John Stepek looks at where …
23 Oct 2020

Most Popular

The Bank of England should create a "Bitpound" digital currency and take the world by storm
Bitcoin

The Bank of England should create a "Bitpound" digital currency and take the world by storm

The Bank of England could win the race to create a respectable digital currency if it moves quickly, says Matthew Lynn.
18 Oct 2020
Don’t miss this bus: take a bet on National Express
Trading

Don’t miss this bus: take a bet on National Express

Bus operator National Express is cheap, robust and ideally placed to ride the recovery. Matthew Partridge explains how traders can play it.
19 Oct 2020
Three stocks that can cope with Covid-19
Share tips

Three stocks that can cope with Covid-19

Professional investor Zehrid Osmani of the Martin Currie Global Portfolio Trust, picks three stocks that he thinks should be able to weather the coron…
12 Oct 2020