Kelly's eye on Brexit - Sage CEO warns EU exit is diverting from productivity boost
- Summary:
- Sage CEO Stephen Kelly, a veteran of government, warns that Brexit focus is eating away at other essential priorities for growth.
The CEO of one of the UK's biggest technology success stories has warned the British government that it needs to get back to business and spend less time on Brexit.
What's more - he used to be the Chief Operating Officer for that same government!
Sage CEO Stephen Kelly hosted a breakfast briefing this morning at Sage’s offices in London to discuss the UK’s productivity problem – an issue that has been addressed by the government in its recent budget and Industrial Strategy.
During the session, Kelly called for an open, smart (skills) and digital Britain, in order to push the UK up the productivity ranks.
It was only natural to ask Kelly about his opinion on Brexit, given he’s a major business leader and has the experience in government. As ever, Kelly’s answers were optimistic, positive, but came with a frank warning.
Kelly was keen to highlight that Britain’s problems remain, regardless of Brexit, or what sort of Brexit the UK ends up with. He said:
Independent of Brexit, and I don’t have a crystal ball of what the outcome will be – we could stay, we could go, it could be shades of soft and hard Brexit – there are three things that we have to drive as hard as we can. Get great education and skills, an open Britain, a digital Britain. We need to drive those faster than ever, because Britain will be very prosperous then, whatever the outcome.
Ring-fence it
Over at our sister site diginomica/government we have been covering Brexit and the complexities it creates for the civil service, which has many of its systems closely integrated with the EU’s. There’s been a common perception that most resources in Whitehall are being sucked up into the Brexit bubble, as the government scrambles to figure out what this looks like for the public sector and the UK.
Kelly said that, in his opinion, this has to stop. Politicians need to ring-fence the Brexit chaos and protect the work that needs to happen domestically, so that things actually get done. He said:
I would also say, [the politicians] are probably totally pre-occupied with Brexit. And they need to get back and focus on the domestic agenda. They almost need a ring-fenced team focusing on Brexit, so that it doesn’t consume the whole of government for the next five years.
Kelly also made some interesting comments around the timeframes of Brexit. The result of the EU referendum was almost two years ago now. When the UK leaves in March 2019, there will be a transition period up until the end of 2020 – with the aim of providing some consistency for business and to give governments a bit more time to implement what (if anything) is agreed.
However, Kelly warned that the scramble to get things done will likely be carried out in the final hours, regardless. He said:
When I’ve worked in government, one of the magical things about government and the civil service, is that they do get stuff done – they can save the banks in a weekend…when there’s a crisis.
When there’s a crisis, the civil service can mobilise at the speed of light and get stuff done. The worst thing to happen would be to say we are going to have a two year deadline or a five year transition. It’s like if you’re at school during the holidays, if you have a project, you have six weeks of fun and then the night before you’re meant to go back you think, ‘Oh my god’.
What happens is that there is all this gestation period, all these policy papers, options, discussion, and then the last few weeks will be frenetic, working weekends, working all nighters.
So, my fear would be, and we have voiced this to government, is that everyone becomes totally consumed around Brexit. But that misses the point, because what we need to do is drive a smart, open, digital Britain. Really start attacking this productivity issue in Britain.
Create a positive tone at the top
Kelly was keen to emphasis that key to all of the ongoing Brexit debacle is maintaining optimistic and positive about Britain’s future prospects – something he identifies as an opportunity for the UK’s politicians. He gave an example of visiting France in recent months, where he compared the country under previous President François Hollande, to recently elected Emmanuel Macron. Kelly said:
I think the sentiment from business has to strike a tone of optimism, because we set the sentiment for a lot of people out there. And these things have a scary habit of becoming almost a self fulfilling prophecy.
A non-UK example, I went out to France a while ago and dinner with Francois Hollande, about three months before he left, with a load of business people. With the business people it was like watching a picture of death in terms of investment plans, their optimism, the French economy, unemployment.
Nothing changed materially, but six months later I went back and met with loads of business people – and the optimism, the energy, they are hiring a lot of people, they’re investing. And one thing has changed: Macron. Just the tone from the top had completely changed the sentiment of the nation and it had become contagious with the business people in France.
I would therefore say that there is a huge opportunity for the politicians in Westminster to really set a strong, confident tone for the future.
My take
It’s always good to sit down and have a conversation with Kelly. His optimism is infectious, but he’s also willing to give a frank assessment of the situation at hand. I’m not sure optimism is enough to fix the problems surrounding Brexit, but I certainly agree that resources should be being prioritised to fixing the structural problems with Britain’s digital economy – not just the exit from the EU.