Following the Cabinet’s rapidly unravelling agreement on May’s draft Brexit deal, what does the future hold for business and financial regulation?
First, let’s put May’s Brexit deal into context. The UK has picked a fight with the closest and largest gorilla it could find, led by an oligarchy of plutocrats, shallow self-publicists and the downright stupid. Small wonder that we’ve taken a beating and that the beating will continue.
Of course, few of those who proposed the exit have chosen to be part of the subjugation; they stay on the side-lines, criticising those who are still trying to achieve on the impossibility of extracting the UK gracefully from the mess of their own making.
The first rule of negotiation is that you must have a seat at the negotiating table. The Brexiteers forgot that fact right from the start, and now we are left trying to make the best of a really bad situation. The wealth of those Brexit leaders will no doubt insulate them, and possibly carry them away to pastures new. Singapore comes to mind… and good riddance.
Brexit, the increasingly unsolvable puzzle. Photo Credit: Getty Getty
In the meantime, no immediate exit is possible. Leaving a 43-year integration of 28 countries in three years was never going to happen. And that’s what the Brexit agreement is: reality. The best deal that was realistically available. Inevitably, it’s a mess.
But perhaps it can be seen as a half-reasonable deal for business. We’ll be able to trade tariff-free with the EU for now, and still bring in the labour we desperately need.
How much the deference to European courts and bodies means to business is hard to say at this point. Day to day, it’s not likely to mean much. Adoption of European standards will be required and always would be if we wanted to trade with the EU, as it is with many other countries and regions – for example, India has adopted the EU’s rail standards.
It’s too early at this point to get a clear idea of how the deal will affect financial regulations in the UK – the deal has to pass first, which isn’t looking too likely right now. If it goes through, there’s scope for a gradual process of adjustment as we pull away from Europe. If it doesn’t, all bets are off – and we can look forward to some pretty sharp manoeuvres from the FCA, the Bank of England and the high street banks. The best advice for finance companies at this point is to be on your guard and get ready to move quickly if the worst happens.
The bottom line is that it will take many years but perhaps incremental improvements can be made when the heat of initial disappointment has ebbed. There’s still cause for hope, even if it sometimes feels like a fool’s hope.
I am CEO of peer-to-peer business lending platform ArchOver. I have worked in finance my whole career, starting off as an ICAEW-accredited accountant, later becoming CFO of tech company Synchronica. In 2013, I founded ArchOver, which has since facilitated loans of over £80 m…
