No single market deal for post-Brexit UK, declares PM
Prime Minister Theresa May today delivered her objectives for the UK exiting the European Union, confirming she wanted to establish certainty and clarity over Brexit.
Speaking at Mansion House, London, she said a final deal on Britain's exit from the EU will be put to a vote of both Houses of Parliament.
One of the main driving points of the PM’s speech was her allegiance to a “truly Global Britain”. She emphasised that while the Government intended to seek out a Free Trade Agreement with the European Union, she clarified, “what I am proposing cannot mean membership of the Single Market.”
May (pictured) said that the Government will seek, “the greatest possible access with a fully-reciprocal free trade deal”, but made her stance on the matter clear when she said, “no deal for Britain is better than a bad deal for Britain”, telling EU leaders that punishing Britain would be "an act of calamitous self-harm."
She said that while setting out a trade agreement with the EU was of importance, a “Global Britain must be free” to establish trade agreements with countries not in the EU as well. Trading with major export markets would help stagnating trade, she said.
She stated the Government intended to work towards taking back control of the law that is currently decided by the European Court of Justice, strengthening the union between England, Wales, Scotland and Northern Ireland and maintaining the Common Travel Area (EU land border) between Northern Ireland and the Republic of Ireland.
She talked about a “fairer Britain”, declaring that the Government would gain control over immigration from the EU to the UK. She also said that the Government wanted to “guarantee the rights of EU citizens who are already living in Britain, and the rights of British nationals in other member states” as early as possible.
May also stressed that protection of workers’ rights was of importance and that the current elements of European law that give us our current rights would be incorporated into domestic regulations.
As an added boost to a future-looking Britain, May stated that we must focus on being one of the best places in the world for science and innovation.
With a nod to cross-border crime control the PM confirmed that there would be continued cooperation with current European partners in important areas such as crime, terrorism and foreign affairs.
May indicated a phased and ordered approach of the new operation model for the UK would be sought out: “I want us to have reached an agreement about our future partnership by the time the two-year Article Fifty process has concluded.”
Kevin Green, chief executive of the Recruitment & Employment Confederation (REC), was critical of the plan outlined, stating, “Today’s speech by the Prime Minister will be cold comfort to UK employers. The government’s plan risks putting the jobs market in reverse by leaving the single market and curtailing access to workers from the EU.
“We must not underestimate the vital role that EU workers play across the economy. We need more nurses to care for our ageing population, more people with the skills to build houses, and seasonal workers to ensure that farmers can continue to deliver for British customers. The reality is that we have near-full employment; the idea that there are hundreds of thousands of UK nationals waiting in the wings to take these jobs is a fantasy.
“Instead of recognising this, the Prime Minister propagated the myth that immigration has had a negative impact on pay in the UK. We call on the government to think through the proposed changes to immigration before it damages the jobs market and the future prosperity of the UK, and we are ready to work with government to help find solutions.”
Abigail Stevens, managing director of Think Global Recruitment, has mixed views on the statement. She said, “For UK based recruitment companies there is good and bad here. I do not think the Prime Minister has reduced the uncertainty as to exactly what will happen, as shown by the pound taking a further drop straight after this statement was released. Looking at the positive side, now all skilled candidates from outside the UK will be considered equally, without a bias towards Europeans and therefore maximise the potential pool of candidates to choose from if looking further afield.
“A specialist recruitment business that works with an export model will actually do better with the currently depreciated pound commanding higher fees. It is those companies working with workers that are not on the skill shortage list that will suffer from not being able to tap into the EU market for unskilled workers. We will have to wait and see what further effects this could have on the British economy and recruitment industry.”
Samantha Hurley, operations director at The Association of Professional Staffing Companies (APSCo), said, “It would obviously be unwise to engage in any conjecture at this stage as we will have to wait for the fine detail to see what the impact on the recruitment profession will be and our thoughts will continue to develop as the Government’s strategy and negotiating stance unfolds. However, we do welcome the Prime Minister's commitment to continuing “to attract the brightest and the best to work or study in Britain” particularly as our members have played such a key part in sourcing talent from the EU to complement domestic talent in professional sectors such as engineering, finance and IT. APSCo is beginning to explore the options in immigration policy to ensure that recruiters can continue to source professional talent."
Peter Cheese, chief executive of the CIPD, views May’s pledge to protect current employment legislation as a positive indicator: “It’s important that businesses have clarity about what the Government is seeking to achieve in the negotiations, so we welcome the details of the Prime Minister’s speech.
“The Prime Minister has made it clear that she wants the UK to be able to control its borders. However, it should still be possible to design a flexible, managed immigration system that allows businesses to access the skilled and unskilled labour they need from both EU and non-EU countries. If we are to use Brexit to deliver a global Britain as the Prime Minister wishes, then British business must be able to continue to attract and access global talent. We would urge the Government to engage properly with organisations and employer bodies to ensure that their views and needs are reflected in any deal that the Prime Minister seeks to negotiate.
“It is particularly welcome that the Prime Minister confirmed that the protections afforded to workers through current employment legislation will continue. Many EU-derived regulations provide vital workplace protections and workers up and down the country will be reassured by the news that their rights will not be sacrificed as part of any deal. However, it is disappointing that the Prime Minister is currently unable to confirm that EU nationals already residing in the UK will be allowed to stay. This needs to be an immediate priority in the negotiations to come.
“Given the implications for migration, it’s more important than ever that businesses look ahead and plan their people strategies, and understand the skills and talents they need in order to ensure that that they are prepared for the future, regardless of what the final arrangements look like.”
Commenting on the plan's impact on the rail and broader infrastructure sector, Graham Day, head of rail at Matchtech, said, "While the ability and ease behind European talent working in the UK remains unclear in a post Brexit Britain, I believe that with HS2 and other major upcoming infrastructure projects the UK can remain confident that it will continue to be an attractive partner for countries across Europe and the rest of the world. HS2 is a career defining project for civil engineers across the globe and as such the appetite to work on the scheme will remain high."
Derek May, CEO of Brightwork, stated, “The Government has spoken, and the UK will be making a hard exit from the European Union. Behind the headlines British businesses are looking to make the best of the situation and to get back to some form of stability.
“The media is awash with commentary, but let’s delve into what the future holds for businesses looking to recruit, and candidates looking for employment.
“The first thing to examine is the economic outlook and is our best guess. The 2008 downturn did not immediately impact upon temporary recruitment. Those looking to weather the storm turned from permanent hires to temporary recruitment as a flexible workforce alternative. It probably took until 2010 for the temporary sector to be affected. Our belts were tightened along with the rest of the country. Reacting to the downturn gave opportunities, however. We at Brightwork moved to electronic timesheets which saved us £40k per annum on stamps and paper alone notwithstanding staff and printing costs. Necessity is the mother of invention and innovation has brought British business through previous challenging times. After Brexit, I can already see transformational specialists repositioning themselves from we are the permanent recruitment specialists to we are the temporary labour specialists as companies move to spread the risks of investing in human capital. With the outlook for the economy uncertain, the Government will continue to use all the economic levers it has and some they will develop, in the hope of sustaining our economic resilience. There may be a migration from permanent to temporary over the coming period which will require the recruitment industry to be extremely responsive.
“Controlling the numbers coming into the UK is now a clear policy aim and we need to look at how migration changes will potentially affect the supply of labour. With the prospect of no longer being to rely on a steady influx of enthusiastic EU nationals, employers who count on DIY recruitment may increasingly find unfilled vacancies, and might call on recruitment specialists. That, potentially, is good news for responsive and flexible recruitment companies.
“Reduced migration will put pressure on the UK population 'available' to work. We have around 1.8m people unemployed so the pool of 'available' labour would appear large enough. Net migration from the EU to the UK was estimated to be around 185,000 EU nationals in 2015. 73% of those either had a job waiting or were coming to look for a job which equates to around 135,000 filling UK jobs. A full stop on European migration will remove 135,000 from the workforce per annum, and we still have a pool of 1.8m unemployed. Negotiations with the EU are certain to be complicated, and a spirit of compromise is expected by most. My money is on a measured reduction in migration, and a new UK focus on reaching the hard-to -help unemployed. A significant investment in time, effort and money is required to get those groups back into productive employment. Regardless of rhetoric, there are complex reasons behind long-term unemployment and the imagined potential of an underutilised 1.8 million workforce does not tell the whole story.
“What will all of this mean for the recruitment industry? We feel that this will help those in the industry who are willing and able to evolve to meet the challenges, but it will be a struggle for the more traditional recruiters. In conclusion, the opportunities may be one of the biggest we have seen in years.”
Jo Sellick, managing director of Sellick Partnership, stated, “Theresa May has finally delivered her plans for Brexit in a speech that has already been hailed the most important of her premiership to date. The announcement is the first time we are hearing of the planned approach to leaving the EU, billed as a ‘hard’ or ‘clean’ Brexit. May confirmed that the UK will leave the European Union and subsequently the single market. In the speech she outlined twelve key objectives that the UK government intends to follow as negotiations get underway.
“Since becoming Prime Minister last July, May has faced repeated calls to provide more detail on her Brexit strategy, but has refused to offer a "running commentary", saying it would weaken the UK's negotiating hand. I still believe she should have been upfront with her plans earlier in the process, instead of creating the sense of uncertainty we have witnessed over the past six months.
“The ‘hard’ Brexit strategy outlined yesterday has been widely welcomed by businesses who have been seeking specifics on the long-term plans since the referendum in June 2016. By promising to provide certainty “as much as possible” as she works to build a “great and global Britain”, May has somewhat shown her commitment to UK business leaders and offered some degree of clarity on what we should expect.
“Despite this, one area that does concern me is May’s unwavering commitment to leaving the single market. As I said before the referendum, I firmly believe that we are facing a fundamental employment issue long-term. We need skilled workers from across Europe to fill employment opportunities in many sectors, including the NHS and property and construction. Leaving the single market will inevitably cause gaps and it will be absolutely crucial to invest in training and development initiatives here in the UK to ensure we have enough ‘home-grown’ talent to cope with employment demands across the country.
“That being said, the UK economy relies heavily on workers from across the EU to take on roles often perceived as unattractive by UK nationals. UK businesses that rely on this flow of staff from the EU may find it hard to fill the gap. On the other hand, new immigration policies could help us maximise opportunities to recruit global talent. By not favouring applicants from our EU neighbours we could benefit from a much wider global talent pool.
“If we are to use Brexit to deliver a truly global Britain as the Prime Minister wishes, then British businesses must be able to continue to attract and access global talent with as little barriers as possible. I urge the government to consult with organisations, making sure their views and needs are reflected in any deal that the Prime Minister seeks to put to the House of Commons.
“Appealing to campaigners on both sides, May also called for a stop to the bitter feud that has plagued the referendum debate, asking everyone to unite and help her build a better Britain, regardless of whether they voted remain or leave back in June. She discussed a “united Britain” that is “open for business and ready to trade with EU and the world”, but stressed the importance of UK citizens and businesses from both camps joining together. Only time will tell if this vision will come to fruition, but I worry that her announcement to let Parliament vote on any deal reached could leave us with a bigger issue in the long-term. Commenting on the negotiations, May stated that that "no deal for Britain is better than a bad deal for Britain," which suggests that she would be willing to leave the EU with no trade deal in place if MPs fail to reach an agreement in Parliament, a move I feel would be disastrous for the UK economy.
“We can only hope that the two year timetable set out by May and her government to agree a suitable Brexit deal will be enough, and that we can forge positive new relationships within the EU that will allow businesses and the UK economy to flourish outside of the European Union.”