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The UK needs a ‘whole economy’ Brexit approach
The UK’s new relationship with the European Union (EU) must meet the needs of every sector of the economy to be a success, as the consequences of leaving any behind could have knock-on effects for others, says the CBI. This follows its largest consultation of members since before the EU referendum.
The CBI has held thousands of conversations across the country with trade associations and firms of all sizes since the summer and taken an in-depth look at the opportunities, concerns and questions that 18 sectors of the UK economy face ahead of EU negotiations in 2017 – on the ease of doing business, regulation, and access to talent.
In Making a Success of Brexit, the CBI calls on the Government to consider the complexity of the modern economy where no business operates in isolation. Products come with complementary services, supply chains overlap across borders, and many companies do not fit neatly into a single sector.
Carolyn Fairbairn, CBI Director-General, said:
“Businesses in every corner of the UK are rolling up their sleeves as they prepare for life outside the EU and are committed to making it a success.
“Leaving the EU will be a highly complex process, and all sectors of the economy are making their priorities clear in order to get it right.
“The Government will need to take a ‘whole economy’ approach to avoid leaving sectors behind.”
The CBI’s consultation reveals that many questions are shared by businesses across sectors.
• Airlines – and the wider aviation sector, which employs nearly one million people – are asking how the Government will seek agreements that allow the smooth transport of holiday-makers, workers and goods, as are logistics companies, haulage firms and retailers
• Restaurants are asking how they will continue to hire chefs from abroad, while companies in the chemicals and plastics sector – which export towards £30bn worth of products each year – are asking whether they will still be able to access the skilled employees they need at their plants. This is also an issue for logistics firms who already face a shortfall of nearly 35,000 HGV drivers
• Construction companies – which will build the UK’s new homes, roads and rail in a sector worth over £100bn to the UK economy – are asking about the potential costs of importing materials and the future of the CE marking regime, as are many manufacturers
• Our world-beating creative industries – which employs nearly 2 million people across music, film, video games, architecture and more – are asking about the future of Intellectual Property and data flows, as are life sciences businesses, technology companies and other sectors.
“The CBI will work closely with the Government to deliver an outcome that helps to meet the needs of firms throughout the UK, building a post-Brexit economy that spreads prosperity to all.” she concluded.
The CBI has identified six common principles as business priorities:
• A barrier-free relationship with our largest, closest and most important trading partner
• A clear plan for regulation that gives certainty in the short-term, and in the long-term balances influence, access and opportunity
• A migration system which allows businesses to access the skills and labour they need to deliver growth
• A renewed focus on global economic relationships, with the business community at their heart
• An approach that protects the social and economic benefits of EU funding
• A smooth exit from the EU, avoiding a cliff-edge that causes disruption
Manufacturing figures and CBI Brexit views
• 2.7 million employees
• £162.4 billion GVA (9.8% of total GVA)
• £228.9 billion exports
• £313.3 billion imports
• For manufacturing, the integration between the UK and EU is significant and means low barriers and long-term regulatory cooperation is important
• Manufacturing companies have concerns about continued access to workers at all levels of skills and about flexible movement
• Partnership between international education institutions and UK manufacturers have enhanced innovation in the sector