Brexit comment from Potter Space

February 11, 2019 by Kirsty Adams
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Brexit comment from Potter Space

Matthew Lamb, managing director of Ripon-based Potter Space, comments on Brexit.

So Parliament voted for Brady’s Brexit amendment by 16 votes to enable the PM to renegotiate the backstop agreement with Brussels so we can put the whole thing to bed.
 
Now they have a consensus MPs believe the fresh negotiations will be a piece of cake, or perhaps that should be a ‘morceau de gateau’.
 
So having headed back to Europe to renegotiate the Chequers Deal,  that incidentally she convinced the leaders of 27 countries to accept, Parliament doesn’t seem to have considered the options if ‘non’ really does mean ‘nein’.
 
So while MPs wait patiently for an answer, businesses are becoming even more frustrated. And I don’t mean about the outcome of these latest negotiations, nor whether we will be in or out, or have a deal or no deal, but actually when is it all going to happen.
 
Let’s face it, can any of us be certain where we will be regarding our place in Europe at 11.01pm on 29 March?
 
And that’s the problem. As Theresa May builds up her Air Miles flying to Brussels and back, the deadline is hurtling towards us and businesses are getting twitchy.
 
What’s more forecasters are also unwilling to give a prediction if nothing happens and it just simply drifts on.
 
All this uncertainty has already caused problems, with the slowdown in the UK’s GDP against the global average extremely worrying. The UK forecast for 2020 is 1.6% growth in contrast to 3.5% globally, and that is based on achieving a ‘withdrawal agreement’, so what further implications will it have on growth if there are further delays.
 
Although I appreciate there are a number of factors affecting the motor industry, we have to be disappointed that Nissan is not going to be manufacturing its Xtrail in Sunderland but in Japan. Interestingly, the timing of the announcement comes just two days after an EU-Japan free trade agreement started, which includes the European Union's commitment to removing tariffs of 10% on imported Japanese cars.
 
But it’s not just manufacturing. It was predicted in November that London will lose up to £700 billion to financial rival Frankfurt by the end of March. Granted, the claim that at least 30 banks and financial firms will move their HQs to Germany came from a lobby group, Frankfurt Main Finance. But we need to take it seriously.
 
Retail continues to grab the headlines, as sales weaken due to the uncertainty, not helped by a subdued housing market affecting items such as furniture.
 
The services sector has also recorded its worst back-to-back performances in the final two months of 2018 in six years.
 
As is always the case, some sectors will benefit from the uncertainty, albeit in the short term.
 
For example, there is a growing trend of businesses expecting to accelerate stock building in the first quarter of 2019. Mind you that will cause a cash flow problem until the goods are sold.
 
Ironically, although I am arguing vehemently for a decision of some kind to be made, Potter Space’s sector is benefitting. Logistics units over 100k square feet reached approximately 33.4 million square feet in 2018. This is up 29% on 2017 and 34% on the long term average.
 
As companies prepare to stockpile goods, demand for warehousing and distribution is going to grow even more.
 
However, rather than a quick gain, I am sure all of us would rather be certain of an outcome rather being left hanging.
 
So my message to MPs is this - rather than having another ‘meaningful vote’ give us all a meaningful conclusion for businesses sake. We can then all get on with planning for the future with some certainty.
 



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