Brexit and business still at odds
Tomorrow marks Britain’s formal departure from the European Union. That’s the relatively uncomplicated part.
In my humble opinion though, anyone who claims with authority to know what happens next is blowing smoke.
From just a business perspective, once you strip away the symbolism of ‘silent’ Big Ben bongs and specially minted coins, what’s left is short on substance.
As Britain’s lone government representative at Davos, Chancellor Sajid Javid didn’t exactly help matters.If anything, his declaration that “Britain is Back” merely confused a gathering of global movers and shakers who'd never realised Britain had been away.
I'm guessing his domestic audience are equally confused about current direction of Brexit travel.
According to Javid, there will be “no unnecessary regulatory divergence” from the EU trade rule-book. This is good news for UK aerospace and automotive companies but it all sounds very different from the earlier separatist rhetoric coming from his boss.
As you’d expect, the situation over immigration plans is similarly confused.
Let me say that I seldom come across anyone who says straight out that they voted ‘Leave’ in order to curb immigration. That said, it doesn’t take long for the subject to come up as they enlarge on the theme of “taking back control”.
Translating this ambiguous political agenda into something workable has defeated successive administrations due to complexities over implementation. It doesn’t look like being different this time around.
Industry bodies such as the CBI, British Chambers of Commerce, Federation of Small Businesses, Institute of Directors and Make UK have all called on the government to rethink the proposed £30,000 minimum salary threshold for migrant workers after Brexit.
Boris Johnson has repeatedly stated his preference for an Australian-style points system, based on applicants’ skills and qualifications and the UK’s labour shortages.
His problem however, as highlighted by the business groups and an advisory panel, is that the UK government has presided over a high-employment, low-wage economy for nearly a decade and that the threshold just isn’t realistic.
The slogan “British Jobs for British Workers” is hardly an exclusive tory mantra. Former Labour PM Gordon Brown resurrected the phrase in 2007 in response to an influx of EU workers into the UK construction industry.
What is seldom mentioned of course is that it was British employers who were undercutting each other over contracts through exploitation of non-union cheap foreign labour.
The reality is that the part of the economy which impacts on employment trends remains volatile. UK retailers have cut 10,000 jobs already this year. Other sectors are looking to expand. Growth projections are contradictory with the possibility of an interest rate cut is on the cards.
It’s not a sensible time, argue the economists & industry leaders, to be adding potential wage inflation into the equation by limiting the overall number of skilled foreign professionals, especially if the big idea thereafter is to improve competitiveness in order to capitalise on the all the promised new trade deals.
A recent twist is that Johnson has already shown an intent to plough his own furrow internationally.
Despite rabid US pressure to the contrary, Downing Street intends to allow Chinese comms giant Huawei to continue to be part of 5G network development in the UK.
This could imply that 'bigger picture' thinking may yet prevail in other aspects like immigration – but, as ever, don’t expect it to be anything remotely straightforward.