Planning for Brexit is like to trying to pack for a holiday with no idea of where you’re going, the method of travel or even what factor of sunscreen you’ll need.
At the time of writing, MPs had once again rejected each of the four alternative Brexit plans. The cabinet was due to meet on Tuesday morning (2 April) to discuss the way forward, and Brexit secretary Stephen Barclay warned that the UK was hurtling towards a no-deal withdrawal from the European Union. The prospect of a general election was also looming.
Business leaders now face the worst possible scenario: more uncertainty, followed by a no-deal Brexit. This means there would be no period of transition to give companies time to prepare for Brexit. Instead, those importing and exporting fashion from and to the EU and countries in the customs union, including Turkey, would be slapped with new tariffs on certain products, including jeans and T-shirts. And that is not to mention the additional administrative burden.
There are some positives. Revenue and Customs has said it will give a transition period at UK ports during which imports will be waved through, even if they do not have the right paperwork. This should help to prevent the long delays many fear in the event of a no-deal Brexit.
Consumer confidence also remained stable – albeit low – in March as wages continued to grow at a faster rate than prices. And trade is booming in Dublin, as more companies relocate their EU headquarters to the city.
However, in the UK, consumer confidence is likely to decline over the coming months. A possible general election would certainly make shoppers think twice about spending on non-essential items. Adding insult to injury, this week the business rates multiplier for commercial properties in England and Wales rose to more than 50% of their rateable value for the first time.
Combined with consumer reluctance to spend and new import tariffs, this could hit fashion retailers, brands and suppliers hard in the coming months.
Political wrangling must not distract the government from its efforts to reform the business rates system. UK retailers must be supported to remain competitive, whatever the Brexit outcome.