This article focuses on the knock on effect on some of UK's economic sectors post Brexit after being the most predominant for 40 years. With changing work forces and restrictions ultimately this will have a knock on effect, but how severe?
https://www.ft.com/content/602f3674-573a-11e7-9fed-c19e2700005f
Agriculture
Trade, access to labour and subsidies are the £8bn UK agricultural industry’s biggest concerns. Two-thirds of agricultural food exports go to the EU, and many farmers want to retain tariff-free access. Growers are highly dependent on seasonal workers for vegetable and fruit-picking and more than 90 per cent of pickers are from central and eastern Europe.
UK farmers also rely on an annual €3bn from the EU’s Common Agricultural Policy for 55 per cent of their income. The government has promised to make up lost CAP subsidies until 2020, but details of a replacement scheme are not clear.
Manufacturing
Manufacturing, which accounts for about 10 per cent of the UK economy, is increasingly making its views known on what sort of Brexit the country should seek. Carmakers, one of the sector’s main exporters along with the aerospace and pharmaceuticals industries, demanded this week that the UK stay in the customs union for “as long as it takes” to strike a new trade deal with the EU.
The EEF group, representing thousands of manufacturers, has a similar message. “Business groups can help with the negotiations over trade, which is the model every other government involved in trade negotiations operates,” said Terry Scuoler, EEF chief executive.
High-value industries are also anxious not to be deprived of global talent. “We are a company that is interested in the free flow of people,” said Tom Enders, Airbus chief executive. “Mobility between our sites in Europe is crucially important.” Peggy Hollinger
Services
Services make up four-fifths of the UK economy and two-fifths of exports — but, with the exception of financial services, the sector has played little role in the Brexit debate. And yet it can be constrained by barriers just as significant as customs hold-ups that afflict goods.
International trade in services relies on factors such as staff mobility, recognition of qualifications and the ability to transfer client data across borders. Few existing free-trade agreements cover services at all and none provide the openness of the EU single market. Unlike external tariffs on goods, the EU countries do not operate uniform services trade policies towards external partners.
A comprehensive agreement with the other 27 EU countries on services trade will break new ground. It may also be a priority for the UK; Britain exported £89bn of services to the EU in 2015, the year before the vote, importing £68bn. Gemma Tetlow
Financial services
The City of London initially demanded a deal that preserved the “passport” regime that allows UK-based groups to sell across the EU, warning thousands of jobs were at stake. Since Theresa May said in January the UK was to leave the single market, the search has been on for alternatives. One might be a bespoke deal built on “equivalence”, by which Brussels would deem UK regulation to be sufficiently similar to its own standards. But this could make the UK — its financial services industry accounts for 7 per cent of the economy — a passive rule taker.
Despite EU countries’ interest in poaching business, Michel Barnier, the bloc’s negotiator, is aware of the need for access to London’s large and efficient markets. One possible compromise could allow flexibility in UK rulemaking in return for an easy way for the EU to tap City services. But if the price is too high, Britain could still choose to go it alone. Jonathan Ford
Universities
UK universities generate £11bn a year in export earnings and support an estimated 750,000 jobs across the country. Brexit could change that. The £800m a year given out by the EU in grants and contracts makes up 14 per cent of British university research income. A fifth of the UK’s academic staff are also EU nationals, whose visa status is uncertain. Some universities are already having difficulties retaining existing EU employees and attracting new ones.
But Oxford university’s Migration Observatory has found that sterling’s weakness since last year’s referendum has reduced the cost of UK tuition fees to Chinese students by 13 per cent and to US students by 17 per cent, boosting British courses’ competitiveness. Universities will also be able to sustain research funding in the short term, since the Treasury has promised to guarantee investment for EU-funded programmes. Helen Warrell
In short such uncertainty is never ideal for an economy relying so much on trade and skilled labour. Skilled talent from outside of the EU requiring sponsorship will be important with Tech labour gaps as well as encouraging skilled student from overseas to study here. There is a need to train British workers and invest in them however naturally moving towards the highly skilled jobs talent from overseas is fundamental. For more information regarding Tier 2 General sponsorship do contact us at consult@mavisas.co.uk or 07376290621.
Thanks in advance for reading
Mason Alexander