Brexit and the Culture of Risk in Wales

Corporations are relying on politicians to strike a deal with the EU that will secure the UK's future trade ties with the continent, some of Welsh business leaders told former First Minister Carwyn Jones in the latest Business News Wales digital discussion.

The current uncertainty about the shape of the trade deal the UK government is negotiating with the EU – and even whether there will be an agreement at all – is not helping companies' confidence and their ability to plan ahead, members of the said Committee.

Carwyn was featured in the latest Wales Business Review by Kellie Beirne, Director of the City Deal for the Cardiff Capital Region. Ben Cottam, Head of Foreign Policy at FSB Wales; Ian Price, Director of CBI Wales; and Alwen Williams, Program Director of the North Wales Economic Ambition Board.

Kellie Beirne said she was very concerned about the UK's continued membership in Horizon Europe, the EU funding program for research and innovation, particularly given the government's stated goal to increase R&D spending to 2.4% of GDP.

“The real worry for me is that time is running out. We are racing towards this date of January 1, 2021. If there is soon no more clarity, what does it all mean, our higher education institutions, our innovative companies, our profile in relation to a leading science country? It will have a massive impact on the economy and innovation growth, ”said Kellie.

She warned that if the UK were to leave Horizon Europe without a replacement, research programs would stall and the research teams built up over many years would be disbanded.

Ian Price said both sides of the negotiation were trying to scare each other and it wasn't helping.

He said: "We currently have companies desperately trying to cope with the extremely challenging situation regarding Covid and we are all spectators of what is happening in Brussels and London."

"Corporations are busy keeping their businesses going and facing all the challenges Covid poses. They rely on politicians to work out a deal that anyone can work with." Right now it's really frustrating.

"I think we'll have a deal in the end, but I think the next 6 weeks will be really uncomfortable for all of us."

Ben Cottam said small businesses do not know what to prepare for new trade relationships and red tape, and that lack of security is not helpful in understanding what the next opportunity might be.

He said: "It is mostly small businesses that are more likely to trade with EU countries and that is likely to continue to do so." What is really important for smaller businesses is that they see a deal with a trading bloc that is so important and familiar to them.

"That doesn't mean they are not interested in international opportunities beyond that, but it is really difficult to see what these might look like while the negotiations are in progress and things are so uncertain."

Carwyn asked Alwen Williams if Holyhead was ready for the UK-Ireland customs to be reintroduced. She said there might be a huge backlog of heavy duty vehicles that would have to stay somewhere.

“The port can currently accommodate around 650 heavy commercial vehicles at the same time. If these border controls cause delays, there has to be an emergency that can handle a lot more. You need to plan what facilities are available to drivers, where they will park and how we can keep this machine moving, which is really important to us economically in North Wales, ”said Alwen.

She added, “I don't think there will be much of an impact on foot passengers, but you only have to get it wrong once for it to be a really bad, memorable experience that has the potential to really do the economy for the passengers to harm in the long term. "

Carwyn's guests also discussed the balance between services and production in business, and whether risk aversion in banks and other institutions was cultural or the result of rules and regulations. Ben Cottam said there is no shortage of entrepreneurial spark in Wales, but Ian Price said there was a fear of risk and a stigma attached to failure.

Wales Business Review is hosted by Carwyn Jones and published in Business News Wales.

Wales Business Review – Episode 24 from Business News Wales on Vimeo.

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