ON MAY 18TH 1536 Anne Boleyn, the second wife of Henry VIII, prepared to die. Her execution at the Tower of London was due at 9am. But the swordsman was delayed, until at last the queen was told she would not die until the next day. It was “not that she desired death,” wrote a chronicler at the time, “but thought herself prepared to die and feared that delay would weaken her.”
Companies braced for a no-deal Brexit may empathise. Those with contingency plans for March 29th surely feel relieved that the government is trying to extend the Article 50 talks. Nine in ten firms prefer an extension to crashing out, according to the Confederation of British Industry (CBI), a lobby group. Yet the prospect of a short delay, with no new plan for how to agree on a deal, merely moves the cliff edge back. Firms that had hoped to cancel their costly no-deal plans must now remake them.
The government surely feels their pain. It had ordered the Royal Mint to create a commemorative Brexit 50p piece bearing the date of March 29th; a test run of the coins already struck will have to be scrapped. The Department for Transport signed contracts worth more than £100m ($132m) with three ferry companies to lay on extra services in the event of no-deal, to ensure that vital supplies from Europe could keep coming. Altering the contract to keep the arrangement on hold for another few months will reportedly cost the taxpayer tens of millions.
Some companies are relaxed about a delay. Majestic Wine said in November that it would stockpile £5m-8m of European booze to safeguard against any snagging at ports. “This position has not changed,” it says. But not everything ages as well as wine. Britain’s refrigerated warehouse space ran out six months ago; those firms that booked space in April may soon be scrambling to see if they can rebook it in July. Warehousers are reporting a surge of interest in the second half of this year, which is driving up prices.
For some manufacturers it is too late to rearrange. BMW, Honda and Jaguar Land Rover have scheduled temporary shutdowns of their car factories in April, to sit out the bumpy weeks following a no-deal exit. The idle periods are to go ahead, even if Brexit is delayed. The companies have not said whether they will arrange another pause in production when the talks near their next deadline.
Many of the firms that have stockpiled have done so on credit. Borrowing by manufacturers is rising at 20% a year, compared with 5% among non-financial firms as a whole. The longer the uncertainty goes on, the longer these loans must be serviced. Meanwhile, capital spending will continue to be deferred. No wonder the CBI has called on Parliament to “stop this circus”.