Brexit : industry reacts

January 25, 2017

Following our look at the impact Brexit could have on the UK defence industry, we talk to industry members about their thoughts on the impact.

Prime Minister Theresa May has set her 12 priorities for Brexit as part of the Plan for Britain after leaving the EU.

The Prime Minister stated: “I want this United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before. I want us to be a secure, prosperous, tolerant country – a magnet for international talent and a home to the pioneers and innovators who will shape the world ahead. I want us to be a truly Global Britain – the best friend and neighbour to our European partners, but a country that reaches beyond the borders of Europe too. A country that goes out into the world to build relationships with old friends and new allies alike.”

What does industry think about this bold statement and where do the defence industry’s priorities lie?

Following our look at the impact Brexit could have for the UK defence industry, we talked to industry members about her vision and the impact this could have on defence spend, exporting and skills.

Paul Everitt, CEO of ADS has outlined the Association’s position: “The Prime Minister has provided important clarity ahead of the triggering of Article 50 and the start of formal Brexit negotiations. ADS will continue to support Government as it seeks to secure an ambitious agreement with our EU partners that delivers barrier-free access to trade, skills and simplified regulatory regimes.

“Securing the best deal for the UK and our EU partners will take time and it is essential that there are transitional arrangements in place to avoid disrupting closely integrated supply chains and damaging the UK’s global competitiveness.”

ADS’ Brexit priorities include:

Access to and influence in the regulatory regime operated by the European Aviation Safety Agency
Access to the EU single market without burdensome customs administration or rules of origin
Access to and influence in the collaborative R&D programmes run by the EU.
Access to vital space programmes initiated by the European Space Agency, but funded by specific EU programmes.
Access to the pool of skilled labour required to maintain the UK’s global competitiveness
Transitional arrangements that provide sufficient time for companies to adjust to the new relationship.

Guy Platten is CEO at the UK Chamber of Shipping. With over 30 years of experience in the shipping industry, Guy is responsible for the industry’s relations with government and other relevant bodies on economic, employment and security issues.

He said: “The Prime Minister’s announcement that the UK is to leave the Single Market and the Customs Union does not come as surprise. We welcome her commitment to ensuring the UK is open for business, that it will continue to welcome talent from around the world, and that the UK will take a leading role in promoting free trade. We also welcome her commitment to ‘frictionless’ movement of trade through UK ports. These were all priorities set out in our recent Blueprint for Growth.

“£120bn of trade moves through Dover alone each year, and our ports have enjoyed significant growth since the introduction of the Customs Union. What matters is not the exact framework that allows such trade to take place, but that trade can move freely with minimal – if any – customs reporting. Many ports do not have the infrastructure to cope with large volumes or lorries waiting for the paper work to be sorted out, and in the worst case scenario, ‘Operation Stack’ could become a daily occurrence.

“We feel that this is unlikely, however. Trade tends to work on the basis of mutual benefit, and given the UK’s significant trade deficit with the EU it is not in their interests to re-establish artificial barriers to trade. Nevertheless, we have worked extensively with the Department for Exiting the European Union and others to ensure Government understands the consequences of re-establishing barriers to trade. It is clear they are listening.

“Mrs May’s ambition is good, but we note that both sides are pronouncing their negotiating positions which, by definition, do not describe the final outcome. On paper, the economic logic for a bilateral free trade and customs deal is clear. The question is to what extent the negotiations will be guided by principles of mutual benefit rather than political ideology.”

James Chappell, the CTO and co-founder of cyber security firm Digital Shadows, comments: “We welcome the Prime Minister’s commitment to the principle of keeping the UK open to securing international talent from the EU and beyond. Technology based business such as Digital Shadows need to have access to the best brains from around the world and without it the UK technology sector could stagnate. In certain key areas such as cyber security and data science there are simply not enough skilled professionals in the UK alone. Therefore, it’s vital that the Prime Minister prioritises access to skilled professionals in her negotiations with the EU and agrees a process that is frictionless as possible.”

Global resourcing specialist BPS World, has warned that one of the main challenges facing employers in the UK in 2017 will be the impact of Brexit on the ability to attract talent, particularly in the high-value digital, technical and engineering industries where recruiters are already struggling with severe skills shortages. This follows the publication by BPS World, of: “Brexit: What the World is Saying” which, for the first time, researched the global impact of Brexit and how other countries believe it will impact on skills.

Simon Conington, Founder of BPS World, has urged the government to ensure that the UK continues to have access to skilled professional from Europe, particularly in the sectors where there are already skills shortages, or face a sharp decline in the UK’s ability to compete.

Simon Conington, BPS World Founder, who also is sector chairman of The Recruitment and Employment Confederation (REC), said: “We are already in a challenging environment with significant skills shortages across both defence and cyber security and the time to hire across this specialist sector is significantly higher than other industries: three to six months. Although most businesses are either under prepared or lack understanding of the implications of Brexit, a post Brexit world in defence and cyber security may turn out to be the same as the world we current live in, with data and technology spanning every area of the globe – there are few barriers and boundaries to its reach. It is likely however that EU will insist on shared legislation for the collection, storage and usage of data. Meaning that if we comply, the commitment will be the same as it is now, if we don’t, we potentially lose data and call centres in the UK, which is another big employer. The style and shape of the agreement is therefore paramount and a special exclusion for workers in these fields will be required to stem any flow of talent. Across both defence and cybersecurity it seems the only way forward will be more legislation and compliance not less – which will have a great impact and drain short term on resource and jobs. Longer term however, this could set the UK up as a best in class/the world leader in defence and security.”

John Wright, Global Director Justice & Law Enforcement at Unisys, comments: “The Prime Minister’s stance on immigration may lead to a rethink from organisations like the UK Border Agency, on the way in which the movement of people is processed and tracked. Potentially we’ll see new borders being created not just in the UK, but across the EU over the coming years to reflect the changes in freedom of movement. This will impact border management, passports and visa operations, and offer up the opportunity for governments to review their border controls, with the potential to look at innovative, through technology-led solutions such as biometrics and the cloud. These new solutions which could include biometric enrolment and location tracking will lead to improvement in the management of people entering and exiting countries. The ongoing displacement of people and the ensuing refugee crisis are examples of scenarios where biometric identification and mobile enrolment offer huge advantages in the drive to manage immigration and the overall movement of people.

“The technology sector remains a driver of economic prosperity, innovation, and an enabler of social change, so amid the projected turbulence, I believe technology has a long term role to play in areas including data handling, border management, policing and intelligence sharing. Early on, the UK government maintained that technology spending will not be cut and this is a very important step. It means that important research will continue and facilities developed to foster the growth of technology businesses, meaning the UK will continue to flourish as a leading nation in technology. Furthermore, in her recent speech, Theresa May reiterated the onus on the tech, science and innovation sector and she welcomed agreements for collaboration from EU partners. ”

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ADS aerospace BPS World Brexit cyber secuirty EU Europe Guy Platten CEO UK Chamber of Shipping International James Chappell CTO Digital Shadows maritime Paul Everitt PM Theresa May Single Market skills shortage UK