Brexit: The Side Effects – Tim Jones

From Tim Jones, mouthpiece of so many Tory business groups past and present. But these are effects, not side effects, of Johnson’s “oven ready” deal.

(In Owl’s view Tim Jones is one of a group of old men who have been too influential for too long in the strategic planning of the South West. They represent the historic failure of our local economy to do anything other than bump along the bottom. He now incongruously pops up as Chairman of the Biosphere Foundation)

Tim Jones

It is now possible to start making a sensible judgement about the impact of our leaving Europe. It does not matter which side of this debate you are on. We made our decision and we are committed to it.

It is however now possible to start seeing whether there have been overall benefits or losses arising. Undoubtedly, many of the benefits will be slow burn and it may not be for 5 or 10 years until we know what progress we have made.

There was much hope that once freed from Europe we would be able to become a global trading partner with many other countries. Inevitably this has been tougher to progress than had been billed. Deals with Australia and New Zealand are being picked over currently and are regarded as having been rushed and therefore not to our benefit.

The deal with Japan has good and bad elements. We are trying to make progress with America but this could take a number of years. There are high hopes that we will join the Pacific Trading Alliance (the comprehensive and progressive agreement for trans-pacific partnership – this is a free trading block of 11 countries in the indo-pacific region). Here again, however, these are delicate negotiations which can take years to complete.

In the interim, we can now more accurately assess the impact of losing our trading agreement with Europe. Overall it seems that we are down by around 7-8%. We have also lost the significant muscle power that Europe has on the world stage. We have also lost access to a number of really important funding streams, such as, the Horizon Programme which has been valuable for many years to a number of our academic institutions.

We have of course lost (or we think we have lost) the burden of European red tape. The government are trying to capitalise upon this by freeing up many of our financial institutions to allow them to expand into other new world markets. This is important as our financial services sector contribute around 10% of the current countries wealth generation (including tax income).

A slightly unexpected consequence has been the effect on the international labour market, which has been a very important part of supporting many of our businesses, such as, health care, agriculture, hospitality/ tourism. The impact of much tighter visa control has become painfully apparent as we are suffering skills shortages across many sectors and are having to reach out across the world and try to recruit for key skills.

What is alarming however is the slow progress we are making in recruiting homegrown talent. Even more alarming is that, in accordance with a recent institute for management development World Talent Ranking Survey, the UK has become less attractive as a destination for oversea workers.

The survey shows we have slipped 7 places, falling to 28th out of 63 countries. This response has been gathered after contacting around 5,000 executives from these various countries. It shows that the UK is no longer being seen as a particularly favourable destination for international professionals and now ranks behind countries such as Latvia, Cyprus, Estonia and Slovenia. The reasons for this are that there are growing concerns about the UK’s economic situation and education system. Many apparently therefore feel that our quality of life is no longer as attractive as it was. All of this has been fuelled by the Brexit debate. Additional concerns have been expressed about the UK’s rising cost of living (which is not as severe in many other countries) and, importantly, the lack of affordable houses to buy and rent.

This obviously also raises questions about not only how many international workers we can recruit but also our ability to retain the international workforce we have already got. In parallel with this, many companies who are trying to expand are making investment decisions to move with the labour market. This further diminishes the economic prowess of the UK.

The government needs to take a strong grip on this. It will help when we have less political and economic turmoil. Northern Devon has a role in this, in sending out strong messages of welcome to the international labour market and to show that we have an abundance of high growth businesses hungry to expand and huge back-up support, both in innovation and education. This is a great opportunity for Northern Devon to show regional leadership.

Written by Tim Jones, Chairman of the Biosphere