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Brexit causing headaches for business, farmers

31 July 20170 comments

Britain’s decision to leave the European Union is becoming mired in confusion and uncertainty as the long term consequences of the move slowly emerge.

The most hotly contested aspect of the so called ‘Brexit’ is what immigration arrangements will exist after the split.

British businesses have urged the British government to reconsider its position on tightening immigration rules to the UK saying that workers from across Europe strengthen their businesses.

But the Conservative Party Brexiteers campaigned largely on the issue of lower levels of migration when they won the plebiscite last June.

However, this week Home Secretary Amber Rudd added another layer of confusion by penning an opinion piece which appeared to take business’ concerns into account.

She wrote in the Financial Times that while the UK would work on an immigration system “that works in the best interests of the country,” she wanted to assure British businesses that “the government is listening.”

Ms Rudd has also commissioned an independent study into what role European Union nationals play in the British economy. In announcing the study, she said that Brexit would mean new immigration rules but that there would be no sudden cut-off for workers or employers.

As Britain begins negotiations in earnest to leave the EU, the government to date has said very little about the kind of immigration system it wants to replace the EU’s freedom of movement rules with.

This has left companies worried that they may lose access to EU workers. Also harbouring fears of dramatic economic consequences are the City of London and Britain’s agricultural sector.

An independent think tank this month warned that Brexit is already damaging London’s economy.

Research by Centre for London shows EU workers coming to the capital have decreased, job creation has slowed and house prices have faltered prompting Labour Mayor of London Sadiq Khan to say it was crucial the government delivers a “flexible system” to attract talent to London.

The research found registrations for new national insurance numbers by foreign workers have fallen by 15 per cent in the capital over the last year with three-quarters of the fall accounted for by a drop in EU migration.

It also found job growth was slowing for the first time since 2015 to lag behind the rate in the rest of the UK.

Year-on-year house price growth was under 3 per cent for the three months to April 2017, the lowest level in London since 2012, while increases in private rental values dropped below 2 per cent to their lowest rate since 2010.

The research, released to coincide with the first edition of the Centre’s new London Intelligence publication, noted that the capital’s unemployment rate was at a historic low of 5.5 per cent.

Centre for London director Ben Rogers said that while London has shown remarkable resilience in the years following the recession, its growth has not been painless.

“Levels of inequality have soared. Congestion, pollution and the housing shortage have all worsened,” Mr Rogers said.

“While no-one knows how Brexit will play out, this new analysis suggests that London’s economy is beginning to wobble. It also highlights the need to tackle London’s critical challenges to ensure it is in the best possible position to deal with Brexit,” he said.

Brexit also poses risks to the UK’s food and agriculture sector with no action so far in a host of areas connected to food and farming, including subsidies, migrant farm labour and safety standards.

A panel of food policy experts says the British Government is “sleepwalking” into a post-Brexit future of insecure, unsafe and increasingly expensive food supplies, and has little idea how it will replace decades of EU regulation on the issue.

The study says ministers and the public have become complacent after decades of consistent food supplies and stable prices for the UK, something greatly helped by the EU.

“With the Brexit deadline in 20 months, this is a serious policy failure on an unprecedented scale,” the report by academics from three leading universities said.

“We are surprised at the failure of the government to address a huge set of issues related to food and agriculture. They give the impression of sort of sleepwalking into this,” they said.

Their 88-page report says that large elements of EU agricultural and fisheries policies would need major reform even if Britain remained a member.

But it warns that departure from the EU raises such urgent complications for food and agriculture that without focus on the issue “the risk is that food security in the UK will be seriously undermined”, leading to dwindling supplies and erratic prices.

Another crucial issue around Brexit is the future of seasonal farm workers from the EU who pick Britain’s crops.

A recent survey of farmers and landowner in Britain revealed concerns about the future of workers vital to the rural economy and the impact that Brexit is already having on the sector.

According to the survey, restricting access to migrant workers once the UK leaves the EU would negatively impact the profitability, efficiency and viability of more than half of rural businesses.

It found that Brexit was already causing problems for many rural employers. Forty four per cent of those surveyed said they had experienced a reduction in the availability of migrant labour over the past year.

The impact was not restricted to crop pickers. The survey also highlighted that one in ten of those surveyed employ migrant workers in managerial positions and almost a quarter of respondents said they worked in skilled roles.

And although overseas labour peaks during harvest months, the survey shows migrant workers are employed all year round within rural businesses in the UK.


Laurie Nowell
AMES Australia Senior Journalist