What race to the bottom?
It looks as if some businesses, or some industries, are preparing for a race to the bottom. What is that? I have written before about the risks of Brexit, including the possibility of a hidden agenda. I have seen some evidence things are moving that way. Certain businesses have asked the government to relax competition rules to enable them to withstand the impact of a no-deal Brexit. This would be only a temporary expedient. Like Income Tax, these things have a habit of hanging around.
What else could be in a race to the bottom?
There are people who object to almost all regulations, saying they make them uncompetitive.
- Health & Safety
- Environmental protection
- Quality standards
- Workers rights
Of course, firms operating without such restrictions can keep costs lower, but is that the way we want to go? In any case, we may find some of these regulations will have to stay to comply with WTO Rules or to gain trade deals with other nations, but be prepared to see several industries lobbying for special ‘temporary’measures to help them get over the bumps in the road we have been warned of.
When it comes to the environment, surely, this is a bad time to cut standards, just as we are looking for ways to combat climate change? The race to the bottom in that respect could take us to a bottom we don’t want to go to.
How will a race to the bottom affect your business?
Is it good news or bad? Perhaps you will be undercut by competitors taking advantage of any relaxation of rules. Or will you be first off the mark? On the other hand, you might make your higher standards a selling point, whether at home or abroad. And what of your supply chain? Will you seek suppliers who maintain high standards or will you relax requirements to get cheaper deals? Whichever way you want to go, make plans soon er than later. Others will. Can you win the race to the bottom or will you benefit by rising above it?