Adrian Dray
BREXIT MEANS THE TALENT SEARCH COULD GET HARDER
Increased UK immigration control could be doubly damaging for the economy – with fewer potential talented recruits coming from abroad, and the risk of talent migration from the UK.
Barnes, currently leading the LEP’s Berkshire Future Talent initiative, explained why our local sub-region is one of those most vulnerable to immigration controls*: “Thames Valley Berkshire LEP is a high growth area with an increase in jobs of 9,900 between 2004-2014 and net international migration being 37,720.
“However, the Thames Valley is dependent on migrant workers and has low rates of unemployed local UK workers, hence would struggle to recruit from the local labour pool without poaching staff from other businesses. In the area, 14% of jobs are occupied by non-UK nationals and there is a 4% unemployment rate at present.”
(*Independent research by Regeneris on Brexit immigration implications)
Jones highlighted: “Given how much the hospitality industry relies on EU labour, finding quality staff will become a major challenge post-Brexit without labour movement. There just aren’t the numbers of UK employees available to fulfill industry needs.”
UK start-up companies are already aware of visa requirement and bureaucracy difficulties connected with non-EU staffing, said business incubator head Roy Azoulay. “Fees have significantly and steadily increased across all application categories, and UK Visas and Immigration is notoriously difficult to deal with. If this becomes the case for EU staff as well, it will be a deadly blow.
“Corporates may have the tools and resources to support attractive candidates through it. Start-ups do not and will lose attractive candidates to EU startup hubs.” Any new UK immigration policy needs to provide an efficient and cost-effective process, he urged.
Noting that the UK’s successful economy had historically been achieved by inherent UK innovation and invention combining with knowledge sharing, collaboration, and talent from overseas partners, Dray stressed: “We have to have an immigration policy that makes it easy for the UK to get that talent into our economy, wherever it comes from.”
“Talent is the greatest bottleneck for innovation and the consequences of Brexit will be dire if every attempt is not made to minimise damage,” added Azoulay.
Andrew Thomson
Tim Jones
BREXIT MEANS FRESH RISKS TO OVERCOME
Some respondents felt a key risk to the UK, and the Thames Valley in particular, was international companies reducing their UK investment, or even relocating outside the UK.
The Berkshire economy is currently worth over £34 billion to UK plc and has the highest proportion of foreign-owned businesses in England. These roughly account for 25% of all employment and 50% of the sub-region’s overall turnover.
“Retention and recruitment of these businesses is more critical than ever; not only to secure their economic contribution but also to sustain the supply chain they share with other, smaller businesses,” said the LEP’s Barnes.
“We need to ensure that Berkshire remains a key business relocation destination based on the continuing strength of our world-leading business clusters.”
Corporate finance adviser Dray mentioned: “We initially saw a short-term hiatus on decision-making, particularly from US businesses investing into the UK. There are now some signs this hiatus may be over, but if it were to remain, the smaller the buyer population for the businesses we are selling.”
Thomson noted signs that Brexit had sparked doubts and potential political contagion within the EU, which could affect Europe’s economic stability and, in turn, global trading. Within his dealmaking sector, specific risks were major financial operations moving abroad and a tightening of financial debt markets.
Speaking for business start-ups, Azoulay commented: “We wait to see the effects of Brexit in terms of angel, seed and A-round funding.”
Barnes added some funding reassurance: “The Government has now agreed* that
THE BUSINESS MAGAZINE – THAMES VALLEY – OCTOBER 2016
all multi-year projects administered by government with signed contracts or funding agreements in place, and projects to be signed in the ordinary course of business before the Autumn Statement (November 23), will be fully funded, even when these projects continue beyond the UK’s departure from the EU.”
This meant Horizon 2020 research funding, important to the University of Reading, and current agricultural funding in our rural communities will be guaranteed up to 2020.
“What’s less clear is what will happen to all those projects in the pipeline that will not be signed before the Autumn Statement, and after we have actually left the EU.” The LEP will continue to seek clarity, Barnes stated.
*August 13: Chancellor of Exchequer statement on European Structural & Investment Fund
continued overleaf...
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