Deal or no deal, Birmingham businesses simply want to get on with Brexit

To an outsider from Ireland on a visit to Brexit Britain, the Birmingham businessman Simon Topman is the raffish epitome of an English gentleman.

He is drinking tea in a coffee shop. His manners are heavenly, his sense of humour devilish. He has just spent the morning at a royal ceremony led by Harry, the Duke of Sussex (Topman is himself a member of the Most Excellent Order of the British Empire with an MBE). His black bow-tie is adorned with royal standards.

“It would be great to have open borders,” says Topman, wistfully, of the current fraught state of Brexit negotiations. “We’re not at war with each other in Europe. We’ve common values. How mad for us not to be all mates together. Can’t we all just hold hands and get on, living a normal, civilised European life?”

In the Birmingham business fraternity, Topman is among the most recognisable faces. His speaking agent says he is the "world's greatest living authority on whistles". Topman's day job is as owner and chief executive of Acme Whistles.

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The company celebrates its 150th anniversary next year, part of Birmingham’s famous manufacturing heritage. It invented the football referee’s whistle in 1884, and supplies most of them to this day.

Heavily exposed

Acme made the first police whistle. It supplied the whistles for the crew of the Titanic. When a freezing Kate Winslet famously tooted for rescuers to pluck her from the ocean in the 1997 film, it was, naturally, an Acme between her lips.

It exports 85 per cent of its products, crafted by a staff of 70 near central Birmingham. Much of its metal is imported from Italy. In a no-deal Brexit scenario, with tariffs on its raw materials and its end product, Acme would be heavily exposed.

Topman sidesteps subtle invitations to reveal how he voted in the 2016 referendum, but suggests he was a Remainer.

“From a business point of view, you want things to stay as is. But the vote went the way it did. It was a democratic decision, no matter what I think about it. We’ve got to come to terms with that.”

He is, however, exasperated by the current deadlock. So much so, he just wants it all to end. As it stands, Britain will crash out without a deal in 21 days. A Remainer he may have been, but Topman now says he could handle a no-deal.

“We are far too frightened of it. As time goes on, I’ve tended to think: Let’s just have it. Let’s have certainty. Let’s have no deal and move to World Trade Organisation rules. No matter the scenario, British business people will find a way.”

Worryingly from an Irish perspective, Topman, while not in the majority, is also not the only business person in Birmingham thinking this way.

If Brexit has caused a split in the United Kingdom, then Birmingham is its microcosm. Britain’s second city is a hotpot of all the conflicting ideas that characterised the debate. Understand it here, and you’ll understand it for all of England.

Birmingham, a trading powerhouse, exports almost £13 billion (€15 billion) of goods to the European Union, 40 per cent of its total exporting output. The surrounding west midlands region is associated with the car industry, which is almost uniquely exposed to a no-deal. The region exports £1.5 billion (€1.7 billion) of goods to Ireland, much of which is probably Land Rovers to Dublin 4.

Reflecting one of the fault lines of the referendum debate, Birmingham is also a city of immigrants who, with their descendants, live alongside a section of native English society that has struggled since de-industrialisation.

Birmingham voted 50.4 per cent in favour of Brexit, a whisker of a majority of just 3,800 votes. White working class Yardley was 60 per cent Leave. Next door, ethnically diverse Hall Green was 66 per cent Remain. Northfield in the south, where many employees of the old Rover factory that shut in 2005 would have lived, was 61 per cent Leave. Selley Oak was 53 per cent Remain.

At the heart of the Selley Oak constituency is a town known to all dark chocolate lovers: Bournville. It is the headquarters of Cadbury, which employs about 1,000 staff here, in the middle of a quaint suburban settlement straight out of a postcard. This is leafy, polite, red-brick middle England.

Cadbury, and its US owner Mondelez, also employ 600 staff at a factory in Coolock, Dublin. The Irish plant makes all the eight-square Dairy Milks as well as Flakes, Twirls and Starbars, while Bournville makes the eponymous dark chocolate, as well as Dairy Milk offshoots such as the Oreo version and Tiffins.

On both sides of the Irish Sea, Cadbury is battening down the hatches in preparation for a hard Brexit. Chocolate could be hit hard by tariffs. Milk, too.

Mondelez has warned in recent months against a messy Brexit. In January, its chief executive Dirk Van de Put told analysts that the company must “prepare for the worst and hope for the best . . . and the worst is clearly a hard Brexit”.

In Dublin and Bournville, they are stockpiling raw ingredients, packaging and warehousing space. There is only so much extra end product you can keep on hand in the food business. But Cadbury Ireland’s managing director, Eoin Kellett, has suggested it may hold an additional two weeks worth of stock.

When the US owners took control of Cadbury – a most British business institution – a few years ago, there were initial fears Bournville could close. Mondelez initially axed a couple of hundred staff, but then it spent £75 million (€87.2 million) on new factory lines, bringing some production back from Poland and seemingly securing its future. Then Brexit came along, queering everybody’s pitch.

Genteel pace

Not that you’d know it in mannerly Bournville, where life cracks on at a genteel pace. There are no flyers about Brexit on the notice boards around the Cadbury-built village – only ads for dog walking and yoga. Staff hurrying into the complex aren’t keen to discuss the situation.

On Bournville Green above the factory, Barry, who runs the local butchers, doesn’t seem too preoccupied about what a messy Brexit could mean for the company that is the lifeblood of the town. He is more concerned with whether his suppliers will use Brexit as an excuse to hike prices. He is already disgusted that the price he pays for Kerrygold butter has gone up.

Although he is of Irish descent, he has little sympathy for our farmers, whose meat exports to the UK would be decimated by tariffs in a no-deal: “Why can’t we just have more Welsh and English beef and lamb and keep it here, to feed our own? They know they can get more for it abroad, that’s why.”

Leaving Bournville, it is a 32km drive to the giant casino and shopping campus, Resorts World, which sits beside the massive NEC exhibition complex near the airport. Steve Brittan is waiting there to discuss why Brexit is a "disaster".

Brittan owns nearby engineering company BSA Tools, as well as an 85-year-old ice-cream business a bit farther south. A past president of Greater Birmingham Chamber of Commerce, Brittan has traded goods all over the world.

The machine-maker was even arrested in 1990 during the UK’s arms-to-Iraq affair, in which certain businessmen were wrongly accused of secretly selling components to Saddam Hussein that could be used for making weapons.

Brittan was saved from prosecution by “documents that proved the government asked me to do it”. He has no time, however, for the current Tory government, which he says is staffed by career-politician “incompetents”.

“These politicians have never built things. They have no idea about business,” he says, barely concealing his disgust at what Brexit has done to the country.

“The public didn’t know what they were voting for. We had opt-outs [from the EU]. We had special concessions. We could have run the bloody thing – that’s what we’re good at. But instead, we’re walking away?”

BSA, which builds factory machines for all sorts of manufacturers, used to export between 40 and 60 per cent of its output: “Since the vote, it is more like 90 per cent. Our usual customers here aren’t investing because of the uncertainty.”

Brittan says the local automotive industry, which includes the massive Jaguar Land Rover (JLR) plant in Solihull down the road, is in "disarray" over the risks of a hard Brexit, which would bring tariffs of up to 10 per cent on British cars.

Brittan's friend, Prof David Bailey of top Birmingham business school Aston University, is probably the UK's top economic expert on the car sector.

“A no deal would mean a hit of about £3 billion (€3.4 billion) a year to the car industry here,” says Bailey. “You would have an output of 175,000 less cars per year, and tens of thousands of job losses. That’s before you even get to plant closures, and I’d have concerns about a number of them. If certain models were discontinued, with nothing to replace them, we could end up with an output of 500,000 cars fewer than if there was an orderly Brexit.”

Bailey has "real concerns" over the future of JLR's Castle Bromwich plant in the area, which employs about 3,000. It makes mostly classic Jaguars "that aren't selling all that well".

The UK government’s nightmare scenario, however, would be any risks to JLR Solihull, a sprawling, remote campus with its own suite of dedicated dual carriageway exits. Bailey believes the UK industry needs car companies to commit investment to make electric cars there, instead of abroad.

Poorly prepared

“From 2012 until the Brexit vote, there was £8 billion (€9.3 billion) invested in the British car industry. It has since declined by 80 per cent. Investors have sat on their hands. But companies like JLR will have to decide soon.”

Henrietta Brealey is Greater Birmingham Chamber of Commerce's Brexit policy chief. In the run-up to the vote, its research suggested its members were split 50/50 on Brexit, so the chamber decided not to adopt a formal position. Now it is tasked with getting them ready for whatever is coming. It runs an online Brexit Health Check for members.

“One third rate themselves as poorly prepared, one third average, and one third well prepared,” she says. “A high proportion of businesses are not actively preparing at present. But nobody should be leaving themselves in a position where they’re googling WTO rules at the last second.”

Brealey cites research by Prof Raquel Ortega-Argiles, of University of Birmingham, who says 12.2 per cent of the region’s GDP is “at risk” from Brexit-related threats.

The irony of the current situation, Brealey says, is that Brexit threats aside, Birmingham's economy is otherwise booming. It has attracted financial giants such as HSBC, which recently opened its headquarters in the city, and other services businesses to make up for struggling manufacturers. House prices are up 16 per cent since the Brexit vote. Unemployment is down.

“Britain’s reputation on the global stage as a safe pair of hands, a place where when difficulties crop up things get done, has been tarnished with how Brexit has been handled. You can’t deny it. That will be an issue for a long time yet.”

It wasn’t just the city of Birmingham that was split over Brexit, or some suburbs or constituencies. Some individual businesses were even split.

If red lights are flashing on the dashboard of Brexit negotiators, there is a fair chance those lights came from Moflash Signalling, which makes warning systems. One co-owner was a Brexiteer. The other, Simon Evans, a Remainer.

“Our workers on the floor were split, too. Our company is representative of things generally,” says Evans.

The business, which will turn over £4.5 million (€5.2 million) this year, is growing strongly at 12 per cent annually. It recently bought a German business, although it was “opportunistic” says Evans, and not a Brexit strategy.

“My mates down the pub think I’m crazy buying a European business, when we don’t even know what the tariff and trading terms will be.”

Like Topman, Evans is also an MBE. And while he was a Remainer, he has tried hard to understand the Leave vote.

“They say it was all about immigration. But Birmingham was built on immigration. There was just a general malaise about the EU, people in Brussels making laws nobody here understood.”

The current deadlock, he says, is a “farce”.

“Nobody here understands the Border backstop, they don’t understand what it means to Irish people. Leaving without a deal is too high risk – it won’t happen. But leave we must. A second referendum would be disastrous, a betrayal of democracy. Think of the divisions. What would that do to Britain?”

Evans shakes his head at the craziness of it all. Then he remembers he is a businessman, and not a politician.

“We’ve got to get on and run things. We’ve just spent £1.5 million (€1.7 million) on European acquisitions. We’re not scared to invest. Brexit won’t hold us back.”