Brexit: John Lewis and Siemens warn government

There are fewer
than 300 days left before Britain leaves
the European Union, and British business leaders are
becoming increasingly concerned about the lack of
clarity that’s coming from the government over
precisely what terms there will be when the UK
departs in March 2019. Here behind me in
parliament, debates are continuing about the
nature of the departure, and particularly
around the question of whether Britain should
leave the Customs Union, and what it’s
relationship should be with Europe’s single market. At an FT Live
Conference, we were able to hear the views of a
number of business leaders on either side of the debate. There was Juergen Maier of
UK Siemens, Charlie Mayfield of John Lewis, and then on
the other side representing much more of the Brexiter view,
John Mills of the consumer exporting company JML. Here’s what they had to say. I just think we’re
at a crunch point, and I think we,
very fast now, need to know what the alternative
customs arrangements are going to be. We will be supportive
of any of those which are practical and
sensible, but if there aren’t any that can be made to
work, our position is clear, we remain in the Customs Union. At the moment, if we import
salad leaves from Spain, for example, they can be on the
shelves with five days shelf life because we have
frictionless borders. If we had to impose plant
and animal inspections on those products, that would
take as much as two days out of that shelf life, almost
half of that shelf life. And that’s just
one small example. There are many
others, and this would magnify across the economy
in a pretty dramatic way. Well I think the problems
about the customs and the border are very
easy to exaggerate. The paperwork that
you have to have if you have either
free trade agreement, or WTO rules compared
to free movement, are not all that different. The customs procedures are a
little bit more complicated, but with goodwill, an
expenditure of money, not a huge amount, and
with modern technology, I would’ve thought
these problems really ought to be solvable. We actually already
tell customs what’s going to be passing the border
before it passes the border. The problem is that
we are a large company and we can do
that, but the truth is that what moves
across the borders is actually products from
lots of very small companies who haven’t set
those processes up. And to set those
technology processes up will take a very long time,
and much longer than the time we’ve got left to sort out what
the arrangements need to be. This whole debate has
been the most political that we’ve seen in a generation. And I think, frankly, that the
political heat of this debate is getting in the way of
sensible pragmatic approaches to secure the best
future for the UK. I think, looking
ahead, Brexit is not going to be such a big deal as a
number of other possible things that could happen. Depending on what economic
policies internally the UK adopt, or
what might happen in the outside world
with Italian banks, with the eurozone,
with what’s happening in Saudi Arabia,
North Korea, I think there are lots of
external threats and internal
possibilities, which are going to have
much more influence over the way the economy
goes than Brexit will. There is an increasing
frustration quite frankly. And I think people are going
to be raising the temperature on really wanting to know what
the practicalities are of us being able to continue to
do our business efficiently here in the UK. The big question in the
next few weeks and months is going to be the
extent to which the UK government, Theresa
May on the one hand, and the European
Union on the other, are going to be
able to compromise to get some kind of deal. If the British are prepared
to make further moves, saying that they will be long
term members of a Customs Union, that they
are prepared to have regulatory alignment in goods
within the single market, prepared to accept the rule of
the European Court of Justice in those areas, and pay a
bit more money to the EU, then I think there could be
room for some kind of deal. But on the other
hand, the Europeans are going to have to accept that
there will have to be, perhaps, some compromise on what
they call the indivisibility of Europe’s four freedoms. The one thing I do
know is this: it’s going to be very,
very late in the day before we know the
answer to that. And the people we’ve
seen in that film, are going to have to wait until
November, December, perhaps even January next year,
before they definitely know that we have avoided
the outcome of no deal.