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The Brexit Column: See the bigger picture

The Brexit Column: See the bigger picture

To get the Brexit it wants, business must think more about Industrial Strategy and the economy of the future. That would also help it forge a consensus, says James Stewart, KPMG's new lead on Brexit.

James Stewart

Vice Chair, Head of Brexit and Industrial Strategy

KPMG in the UK


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Is Brexit the biggest challenge facing this country and its business community? It seems like a strange question for me to pose as I finish my first fortnight as KPMG’s new lead on Brexit.

I ask the question simply because having been the firm’s globe-trotting Head of Infrastructure for seven years, I’ve seen first-hand the fundamental changes already underway in global society and the world economy – changes that we aren’t debating as much as we should. A digital revolution is taking place in front of our eyes – a world where intelligent machines can reason and learn faster than humans or where, one day, everyone has nano-machines – just a few atoms in width – with the ability to make virtually everything we’ll ever need. How will the UK fare in that world?

Last November the UK Government launched Britain’s first independent Industrial Strategy in 45 years – a document probably inspired by Brexit, but nevertheless a timely one in addressing these longer-term questions. Yet despite its importance, the Industrial Strategy sits on the side-lines of our national debate. Okay, so the government was unlucky in its timing – news of the royal engagement that day consigning it to the inside pages – however it has failed to regain ground since. A quick check on Google shows 33 million searches for “Brexit” in the UK versus just 600,000 for “Industrial Strategy”.

I’m not suggesting we switch our focus away from Brexit for one second. This is not an either/or question. What I’m suggesting is that more debate about the Industrial Strategy would help settle a prior issue: we first need a vision of the kind of economy we’re trying to build and the kind of country we want to create before we can properly define the kind of Brexit we want.

An added benefit is that, by debating this longer-term question, business might start speaking with a strong and clear voice – something that has been lacking on the topic of Brexit thus far. Why is that? The answer suggested itself to me earlier this week at a dinner with senior businesspeople and political figures this week, hosted by our UK Chairman, Bill Michael. What struck me was the deep disagreement about what kind of Brexit everyone wanted. This wasn’t a replay of the old Leave-Remain argument, but between those who backed slow transition versus others who’d prefer to rip the plaster off quickly and get out ASAP. There were some who argued for a close alignment with Europe and others who said a less regulated, ‘less European’ model was the future. There was plenty to chew on.

My point is, there is no consensus among the business community and it’s unlikely to be found. And that’s understandable. “Business” is not a monolithic bloc; it’s a collective of different sectors – each facing distinct opportunities and threats from Brexit. Within every sector there are thousands of companies – each with their own hopes and fears. And within every company there are individuals – each with his or her own emotions and experiences.

So when I hear people say “business needs to make its case”, my reply is: “which case?”. If consensus is a necessary pre-condition to be heard on Brexit, it risks remaining muzzled.

By contrast, uniting around issues where there’s commonality could be more fruitful. This week’s national conversation around the use of plastic packaging is a case in point: there’s broad consensus across business that something needs to be done. On these sorts of issues, we should not only be supporting government; we should be taking the lead.

There is one last practical issue we need to resolve first: improving the way the public and private worlds communicate. In the decade or so that I chaired Infrastructure UK – the government’s interface with that sector – I saw the same situation play out again and again: industry would speak to government with many voices and deliver many messages. Too often they were ignored as a result.

The modes of interaction are clunky. Too often, both sides misunderstand the other. So here’s my not-so-New-Year’s resolution: if there’s one thing I will achieve in my tenure overseeing industrial strategy, geo politics and Brexit for KPMG in the UK, it will be to strengthen that channel so both sides can be heard.

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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK. You can register for the email subscription list of this column and expert views from our Brexit leaders.

© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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