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Our members are asking how they should get ready for Brexit and how to stress test for the risks.
The best analysis we have seen is by NEXT. Here’s a link: NEXT-brexit-planning-statement
You should read it; it covers a lot of ground in ten pages. NEXT identify risks that are specific to them, including:
- Higher import duties on goods coming into the country
- Delays in getting goods through ports and
- Devaluation of the Pound leading to cost volatility.
They explain what they’ll do to counter these risks and make some recommendations for the government. It is a well-thought through document.
NEXT’s approach was best summed up by their CEO on the Andrew Marr show. He said people are still going to be wearing clothes after Brexit – we’ve got to make sure they’re buying our clothes. That’s the spirit.
We’ve seen a few RPs stumble at their IDAs over Brexit – that’s because they’ve tried to blame all their woes on it. This won’t wash. You need an approach like NEXT’s to hit the right notes.
So, you need to set out the risks that apply to you and how you will mitigate these. Here are a few things you should look at:
- The costs and delays of getting building materials into the UK
- The gaps emerging between UK standards for materials versus those prevailing in other countries getting in the way of specification and procurement
- Problems with bringing labour in
- Impact on loan costs of economic turbulence
- Intensification of welfare reform as austerity comes back
- Difficulty of collecting CPI +1% rents if CPI increases significantly
- Introduction of competitors from other countries as part and parcel of trade deals.
How will these (or other) risks affect you? What are you doing about them?
I hope this is helpful and I am keen to hear your thoughts on getting ready for Brexit.
By Alistair McIntosh, HQN Chief Executive