I am not sure if it is a good thing to pick a French epigram for the title of this article at a time when Brexit is the hottest potato on the menu – but I couldn’t resist the irony.
In 2017 I said that Brexit would be the elephant in the room. For 2018, the only change I can see is that either the room has shrunk or the elephant has grown bigger.
An interesting thought is that over the ages Britain has survived many continental attempts aimed at its destruction: The Spanish Armada, Napoleon and Hitler all failed but Brexit seems to have persuaded successive UK governments to keep a finger firmly pressed on the self-destruct button.
Politics nearly paralysed by Brexit “negotiations”, major investment decisions ‘on hold’; not good news for our economy. Industries such as manufacturing, leisure, food and construction have concerns over how to replace EU workers with a skilled indigenous workforce.
Our food sector in particular is involved in a desperate race against time to introduce robotics to solve the labour shortage caused by EU labour leaving and local resources not coming forward to take their place – even more ironic that our EU partners (Germany, France) are streets ahead as far as robotics technology is concerned. Longer term I envisage demand for large food factories populated by robot technology in locations with good transport links (A1, M1 rather than A17), which could be good news for construction companies specialising in the food sector.
More than one year on from the Brexit vote, we are still waiting for the “Leavers” to tell us about our Brave New World. A legitimate question from, say, a shoe manufacturer who today sells very well to high end fashion shops in Amsterdam, Berlin, Madrid, Milan and Paris could be: “After Brexit, when new trade tariffs erode my margins on current sales, where am I going to sell my shoes instead? Could that be Zimbabwe? India? China? Or Vietnam?” It is about time that David Davis, Liam Fox & co “share a practical vision” rather than telling us they will negotiate great tariffs with countries which currently show no appetite for our products!
Rising house prices could be the end of the ubiquitous British aspiration for home ownership – when we look back in later years, 2018 could be the year when it became generally accepted that houses are there for ‘shelter’ and we rent accommodation rather than ‘invest’ in it. Housing associations too, are already on track to provide “Open Market Products” (possible targets for buy-to-rent) with their social housing under pressure from “Right to Buy” and potential rent arrears issues following the introduction of Universal Credit. (In the past landlords would receive rent payments from the local authorities, now all monies are to be paid to the claimant whose responsibility it is to pay the bills – some claimants may not have the budgeting skills to avoid having to choose between buying food/clothing etc or paying the rent)
Issues within the NHS went somewhat ‘underground’ during 2017 but as the pound has devalued by 15% against the Euro and by 20% against the Dollar and as most medical supplies are bought in foreign currency (mostly dollars) the effect of this monumental cost increase are bound to surface during 2018 and the promise of £350 million a week for the NHS, generated by Brexit has not been mentioned much off late.
- I expect the 2018 economy to be held back by concerns over labour shortages caused by the Brexit process.
- A possible ‘ray of sunshine’ might be the government support for housing in general – the 300,000 annual housing target could have a beneficial effect.
- The expectation that every British family could own their home (and thereby creating a nest-egg) may well go up in smoke and the rental property market could take off.
- The NHS may have to introduce a limited element of privatisation or introduce a charging system to help with funding.
- We may see some robots picking veg in the Lincolnshire fields.