The FT & KPMG Brexit Regional Roundtable series brings together the views of senior leaders from the worlds of business, politics and academia to discuss how they can practically respond to the challenges and opportunities of Brexit.
KPMG has been meeting with organisations around the UK to assess how they are responding to Brexit in a series of dinners, hosted jointly with the Financial Times. Here are a few of the interesting things we heard in Bristol:
1. Clarity on regulations is a major priority for the leaders in the West of England
Top of the wish list for many of the region’s leaders is a harmonious regulatory environment, enabling the continued smooth running of their operations. They are keen for clarification about a raft of regulations, ranging from those issued by the European Aviation Safety Agency (EASA) to those affecting business activities, such as Open Skies rules and tariffs. In particular, chiefs want certainty about the future of their supply chains and how they can continue to influence safety standards.
2. Leaders are making contingency plans
Although there’s still plenty of uncertainty around Brexit, leaders are making
contingency plans for the various possible outcomes. There are concerns that supply chains could be disrupted as a result of new customs regulations, which could seriously affect those firms that operate just-in-time production lines. One possible answer to this is to invest more heavily in additional warehousing.
3. Innovation remains a priority for universities and businesses
The region’s universities and businesses are at the cutting edge of innovation and are keen to protect the collaborations they enjoy with EU partners. Universities are increasingly focused on industrial partnerships and are looking to develop these relationships as part of the R&D drive of UK business.
4. Exchange rates are having a mixed impact across the region
Manufacturers that export to Europe have, perhaps, inevitably, benefited from the fall in the value of the pound. However, those companies importing goods from continental Europe have been squeezed by rising prices, due to sterling’s decline.
5. Leaders want certainty around immigration
The supply of labour, post-Brexit, is one of the toughest challenges facing the West’s businesses and public sector organisations, which are heavily dependent on EU nationals for both skilled and unskilled roles. Freedom of movement underpins some firms’ plans for the development of talent and innovation. And there is also a need for more clarity around the status of migrant workers, some of whom may leave the UK with their families, rather than face continued uncertainty. At the same time, businesses could start to make alternative location strategy decisions.
Businesses are also keen that the UK should remain open to students from overseas: international university education is one of the country’s biggest service exports and is hugely important to the economic growth of university cities in the region. Some are worried that the possible tarnishing of the UK’s image as a welcoming place is having an impact on both potential students and workers from the EU.
6. The West remains generally upbeat about the future
Two recent developments have given businesses reason to be optimistic about the West’s prospects: the major investment in the latest Hinkley Point nuclear power station and the devolution deal introducing a new metro mayor to certain parts of the region. Leaders are determined to work together to generate economic development for the benefit of everyone.
Although some firms think the UK government needs to listen more, they are generally upbeat about its industrial strategy and, in particular, the creation of strategic sector and regional deals to boost advanced manufacturing in the West. Leaders also hope that Brexit will bring about consolidation in a highly fragmented accommodation market and that it could provide an opportunity to improve financial services regulations, as well as to simplify taxation.