British businesses are growing tired of the government’s internal squabbling and the lack of clarity around what Brexit will mean for the economy come March 2019 when the UK exits the EU trading bloc. Equally, companies are already suffering from EU workers leaving Britain after the result of the referendum and are calling for the protection of EU skills as part of any Brexit deal.
The warning comes from the British Chamber of Commerce (BCC), which is a national representative body of UK business, representing more than 75,000 companies, including those in the technology sector.
Founder of Tech London Advocates, Russ Shaw, has echoed the concern, stating that the BCC’s latest research is a “stark reminder of the negative effect Brexit is having on the prosperity and potential of British business”.
We at diginomica/government have been covering the ongoing impact of Brexit on the technology sector in the UK, as well as the impact on tech policy in government, for many months now. The general consensus is that there is little to be excited about in terms of opportunity as a result of the referendum decision last summer – but this is being made worse by the government’s haphazard approach to negotiations.
That being said, Prime Minister Theresa May did make a breakthrough at the end of last year, where she finally managed to strike and agreement with the EU over its three main sticking points – the divorce bill, the protection of EU citizens’ rights and the Irish border. This means that negotiations can now move on to the more complex challenge of trade talks.
The UK is hoping that it can agree an unprecedented trade deal with the EU, given that it is starting from a position of strong alignment with the trading bloc. However, time is running out between now and the March 2019 deadline and industry is still not clear on what a transitional agreement after this date would look like.
Concerns over data sharing and access to talent are front and centre for British business.
Patience wearing thin
Writing in the Observer, director general of the BCC, Adam Marshall recently said that the UK is starting the new year with below-par economic growth, stubborn inflation, low rates of investment and far too few potential recruits for the many jobs on offer. He added that getting the twin challenges of Brexit and the economic fundamentals right will require “leadership, consistence and clarity – after a year in which business has been dismayed by what it sees as division and disorganisation across Westminster”.
Get the decisions wrong, or avoid them entirely, and the UK will enter 2019 performing well below its potential, Marshall warned. He said:
Unleashing the animal spirits of British business in 2018 requires clarity on Brexit, an ambitious and visible domestic growth strategy and consistent, coherent leadership, with a focus on the national interest, not the electoral interest.
Businesses have been very patient in waiting for clarity on Brexit in the 18 months since the referendum. That patience is now wearing thin. Businesses want answers, they want clarity and they want results.
Marshall said that Chambers of Commerce members – as well as their EU trading partners – want a “standstill” transition agreement as soon as possible in 2018, which should give certainty on short-term trading conditions. A failure to reach a quick agreement will see businesses trigger contingency plans, which could see resources moved to the EU.
He added that the biggest potential brake on business growth in 2018 will be a lack of available skilled workers and urged Ministers to recognise that simpler, less costly immigration rules are needed so that firms can get the people they need to grow.
The skills problem
The BCC has also recently issued a warning that British businesses are already suffering from a lack of workers as EU staff quit their jobs and leave the UK, according to the Telegraph. The research comes in response to a Migration Advisory Committee’s call for evidence, which claims that engineering and manufacturing firms are considering moving overseas to find the staff they need.
The survey of over 1,600 businesses across the country found widespread concern over the potential loss of EU workers. The BCC said that it wants the government to give an “unconditional guarantee” to EU workers “that they and their families can remain here post Brexit”.
It wants companies to keep access to new EEA workers through any Brexit transition period “at all skills levels, without additional costs or restrictions, and these workers should be allowed to remain in the UK at the end of the transition period”.
British businesses also called for a “light touch, fast and affordable” migration system to be put in place after Brexit.
It is thought that after March 2019 the free movement of people will end and the UK will adopt a “more selective approach” based on the UK’s economic and social needs. This will, in turn, require new systems to be put in place to check the status of EU nationals.
A recently leaked document outlined plans for a future immigration system, that the government hopes will be “digital, flexible and frictionless”. The document stated:
A secure digital portal will enable employers and public service providers quickly to check the immigration status of an individual and take action if necessary.”
We will be seeking the views of employers and other stakeholders on the details of these arrangements, with the aim of making them as straightforward to use as possible, but effective in identifying the immigration status of individuals.
Commenting on the results of the BCC’s research, founder of Tech London Advocates and Global Tech Advocates, Russ Shaw, reiterated that clarity is needed from the government on Brexit and in particular the access to skills in the EU. He said:
The latest research from the BCC is a stark reminder of the negative effect Brexit is having on the prosperity and potential of British business, as the uncertainty around the negotiating process continues to linger and potentially damage Britain’s international reputation. As one of the world’s leading economic forces, and a nation with a vibrant and dynamic tech sector that relies on skilled talent from around the world and the EU, we cannot afford to continue going down a path that hampers our ability to attract valuable foreign talent.
Last month’s breakthrough in negotiations around protecting the rights of EU citizens in the UK was a promising development and a much needed element of reassurance in the Brexit process; however, much more needs to be done by the government, particularly in ensuring that the rights of EU citizens are now unilaterally put into UK law.
With Britain looking to establish itself as a preeminent global tech hub, we cannot allow for the country to be ranked behind the likes of Germany and Spain as a working destination, if we are to remain the leading European business centre. The figures from the BCC are a cry for help from the British business community and should serve as a catalyst for real change to take place – it’s not yet too late to revamp our immigration system in a way that will benefit our business and tech community, but we must act now and act decisively.
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