Brexit means Brexit?

[Ovacikpeedoff]

As I have mentioned here before I am a director of a small company that writes bespoke software for small financial institutions that do not have the wealth to run a major technology department. These institutions are based in the UK and in the EU. In the next 12 months major changes are being made to banking regulations that require institutions to produce more information on their risk portfolios.

At the start of 2016, we produced a detailed business plan as to how we would enhance our software to meet the new requirements. Our plans included a major cash investment that would have generated an additional 8 jobs. It may not sound many but it is around a 12% increase in our work force. In addition we were to introduce another 3 trainee positions. Initially the majority of the investment was to be internally generated from this year's profits and existing reserves. The major devaluation of sterling has seriously impacted on our cost base which is now impacting on the company's profits. Like many other companies we have a around a 3 month level of inventories which means it is only now that the full impact of replacement is being felt. Our major supplier is in the US and the 20% devaluation is hitting hard. We are a small company but major companies such as Caterpillar and Vauxhall are now expressing the same concerns. Vauxhall has estimated that in 6 months Credit is going to cost the company around £400m. It was hoping to break even but will report a £400m loss. I just wish people would come to understand that the UK is not a manufacturing nation. It is an assembly line. Most materials are imported and the fall in sterling will hit hard. Renault make the engines for Nissan that are assembled in Sunderland. Motor manufacturers have defined supply networks that are spread throughout the Globe.

We have a government that does not know it's backside from its elbow. Talking tough but do not have a clue what they are talking about. A cabinet that is totally split. The Tory party conference demonstrated they do not know where the hell we are going. Johnson writes an unpublished article setting out the advantages of staying in the EU. 3 months ago he was all in favour of staying in the single market now he wants to leave it. May gave a presentation to Goldman's stating the serious impact that leaving the single market. She must be bloody dizzy from going round in circles. She opposed the 3rd runway at Heathrow now she is all in favour of it.

I am sick of reading morons who all they can say is Brexit is Brexit. When asked to explain they run to the hills.Also the mail, express and telegraph readers who believe all the rubbish that is printed on those papers. The sensational headlines like a leading politician has said the EU will give us a free trade agreement. To find out he is some junior minister that has been sacked. If some so called expert comes forward and says the UK's growth will increase by 10% it is taken as brilliant news. When experts say that over the next 10 years growth will fall by 6% we get the Project Fear rubbish being spouted about.

We have Fox and Davis spouting all of these countries are lining up to give the UK trade deals. The US has said we are at the back of the queue. A statement that Clinton has endorsed. Australia has stated today that they will not commence negotiations until the UK has left. Any deal with Australia will have to include labour movement. The EU has not been able to conclude a trade deal with India because over the past 5 years there have been objections from the UK on skill transfers. Now Fox tells us a deal will be concluded in days. So labour movement will be acceptable. Trade deal with China so they can dump all their rubbish on us.

Inflation is on the rise and the BOE is forecasting it to be over 3% by the the end of 2017. There is already a downward push on wage inflation. So by the end of 2017 the poorest is society will be the worst off.

I wish people who go on about the undemocratic EU would actually read a proper newspaper or book on the structure. It is as democratic as the UK is. EU policy is formulated by the elected leaders of each country. This is then broken down into the constituent parts and each country has a minister to speak up for its interests. The laws and regulations are prepared by the Commission or as we would call them the civil service. The elected European parliament vote on them and they are agreed by the council of ministers before they are enforced.

Also this fallacy I hear about controlling our borders. What should be said is to let France and Ireland control the borders. This will never be accepted by the French and the Irish.

Let us control our own laws. Too much regulation from the EU. You then ask for examples and not one law can be identified. The vast majority of workers rights were as a result of the EU.

All of the UK's woes get blamed on the EU and foreigners. One client we have is based in the North East. I had to visit them a couple of weeks ago to resolve some problems. We stayed not too far from Nissan. We went for something to eat and had a drink in a local pub where we met some car workers. Out of interest we asked them why did the area vote to leave the EU and what they thought of Nissan's announcement about future investment in the area. The answers we got were astounding. One guy said he thought Nissan were not serious when they wrote to employees saying they wanted to remain and if they had told us about impacts on future investment he would have voted to stay. Another said he voted to leave not because of problems with the EU but he wanted to kick the government up the backside and he did not like immigrants.

I could go on but I feel I am wasting my time.

[Ovacikpeedoff]

I forgot to include we had a board meeting today and we have decided because of the uncertainty and the lack of a clear message as to what May and her clowns are actually going to do we are going to cancel our investment plans. If we leave the single market then we could face a tariff of up to 25% and that along with the increase in our cost base will not allow us to compete.

We have decided that we will continue to service our existing clients with the current software. It will carry most of our clients to the end of 2017 or early 2018.

We will not tender for new customers. Once our current customer base is depleted we will sell off the rights to the software. It will have little value as it will be out of date. We will then close the company.

I am having the next 10 days off to play golf. I am sure that will annoy Liam Fox.

[Colwyn]

Must be a horrible experience having to kill off a business you have cared about. Hope the golf goes well, Gerry. Perhaps seeing the hole as Michael Gove's ever-open mouth, and the ball as a means of shutting it, can motivate good putting.

[JohnF]

We will not tender for new customers. Once our current customer base is depleted we will sell off the rights to the software. It will have little value as it will be out of date. We will then close the company.

Must be a horrible experience having to kill off a business you have cared about.

This is not an isolated situation.  There are many small to medium businesses facing the same fate.  My OH is in a similar(ish) position - our solution is to relocate to Spain several years before we intended to. 

JF

[Ovacikpeedoff]

Colwyn, what is hardest is killing off a business that was growing. We had won local awards for best regional small business. Commendations for innovation and business practice. If we had been a failure I would not have been annoyed as I am now. I really feel for our staff as they will be the ones that will suffer most. We spent most of yesterday talking to them and they understand our predicament. We, who started the company,are in our 60s and it was always our intention by 2020 to step away and give day to day control to our brilliant staff. In the past year we had been talking with legal and tax experts to transfer our shares to our employees by way of a trust that we would still have control of as trustees. All the accrued financial benefits from our shares would be divided among the employees. We wanted to do it this way to ensure that the company would not be run into the ground. Working in technology constantly needs investment and we wanted to ensure that investment  continued to be the ethos going forward.

JF, we talked long and hard over the past few weeks about relocating to Dublin. Some staff would have come but the majority did not want to up sticks. We fully understand where they were coming from.

[kevin3]

      I feel for you and your employees Peedoff

[Scunner]

We will not tender for new customers. Once our current customer base is depleted we will sell off the rights to the software. It will have little value as it will be out of date. We will then close the company.

Must be a horrible experience having to kill off a business you have cared about.

This is not an isolated situation.  There are many small to medium businesses facing the same fate.  My OH is in a similar(ish) position - our solution is to relocate to Spain several years before we intended to. 

JF

Till they boot you out.  

[madmart]

It would seem that Nissan don't seem to be too bothered at the moment.

http://www.bbc.co.uk/news/business-37787890

[Colwyn]

Why would Spain boot out JuanF?

[villain]

It would seem that Nissan don't seem to be too bothered at the moment.

http://www.bbc.co.uk/news/business-37787890

I wondered about  this new found enthusiasm from Nissan for the United Kingdom of England and (maybe) Wales, then I saw Nissan have been given the equivalent of a BLANK CHEQUE (how generous of us):

"Britain has given Nissan (7201.T) a written commitment of extra support in the event that Brexit reduces the competitiveness of its Sunderland plant, in return for new production investments by the Japanese carmaker, a source with knowledge of the matter told Reuters.

In addition to unconditional investment aid, Britain pledged in a letter to offer further relief if the terms of Britain's European Union exit ended up harming the plant's performance, the source said."

http://uk.reuters.com/article/uk-britain-eu-nissan-support-idUKKCN12R1AK

So back to that £350m (not £350m) a week. Is it going to be sent to the NHS or sent to bribe the car manufacturers to stay?

Saying that, I suspect also part of the  reason is that anything approaching "true" brexit (and I still haven't been told by any Brexiter exactly what that is) is going to take YEARS - long after that new Nissan model is through it's life-cycle.

Anybody interested in "why?" it's going to take years and years should take a look at the Jack of Kent blog (also on Twitter), written by lawyer and journalist (and for his sins a Villa fan) David Allen Green. He was actually a marginal Brexiter but exposes the real issues about Brexit (i.e. the ones not mentioned by the Sun and Daily Mail etc.). For the Brexiters who really don't go in for details (I get the impression that that's approximately 100% of you, give or take), you cannot simply wave a magic wand and then we'll be shot of the EU forever.

For example The many hurdles of Brexit.

You will note that 4 months down the line from June 23rd, we're just about to negotiate hurdle 1 of 19, with an almost guaranteed appeal to the Supreme Court to follow.

I humbly predict that this will be an extremely long-lived thread.