Divorces are never easy, especially when it comes to negotiating. When the United Kingdom decided to part ways with the European Union following the June referendum, people looked at Brexit as an immediate break up. What came next, just like with a divorce, is the limbo period full of meetings and negotiations to define what Brexit means and how long this process is actually going to take.
Text by Lane Nieset
“We’ve ticked the box that says we want to go, but we haven’t hit the button that actually makes the mechanics of leaving start,” explains Simon Hughes, Vice Chair of Business Visits and Events Partnerships (BVEP). “From a commercial point of view, we’re in a difficult position when it comes to negotiating with the single biggest market in the world because we basically said to them ‘we don’t want to be part of you anymore.’”
While some people expected an overnight change, it realistically may take anywhere from two to 10 years to get the ball rolling and see the social, economical and political implications of the Brexit decision.
“What seems to be quite shocking is that there appears to have been no plans from the UK government as to what the next steps are once Brexit has been confirmed, whichever way we voted,”explains Mark Ford, Head of Creative Communications at MCI UK. “There was no real Plan A, let alone Plan B or C in order to how people go through the transition if we vote to stay or stay out.”
Business as Usual
While the current exchange rate has made the UK more attractive for business, nothing else has changed in terms of facilities, quality of service and the creativity that drives the destination’s reputation on a global scale.
In the months following the vote, the phrase “lack of clarity” seems to be the most common description of the current situation. In the short-term, most companies are saying it’s business as usual since there have been little immediate effects of the decision.
“We believe there will be a positive shift for the market, and business that is currently being outsourced to the continent will instead be insourced in the UK, making products, services and the workforce even stronger,”says Scott Graf, Global President at BCD Meetings & Events.
Looking at Long Term
Before the government starts giving guidance, it’s hard to predict what the long-term impacts of Brexit will be. Corporations and large associations based in the UK will have to re-evaluate their investment in the marketplace and prepare for potential financial implications. For example, there’s already been rumors of some corporations thinking of moving their headquarters from London to another European city centre.
Trade is another factor to take into consideration, and the business and events industry in the UK may lose its competitive edge if there are drastic changes in terms of moving products and services across EU borders.
“Countries are going to want to trade with us so it’s just a matter of time once this limbo period is over that we can all start sitting around the table having a chat,”Ford says.“There’s going to be a lot of meetings, so it’s a good job we’re in the meetings and events industry.”
While major concerns at the moment revolve around whether EU members will retain the right to work in the UK and what aviation will look like both for tourism as well as business travel (particularly with the EU-US Open Skies Agreement), the Brexit decision also opens up a world of opportunity for the UK. The destination may gain more of a competitive edge as legislation is examined and the UK creates its own unique model, as countries like Norway and Switzerland have done.
Four Priorities Following Brexit according to Simon Hughes, Business Visits and Events Partnerships (BVEP) Vice Chair
1. Safeguard trade, reduce uncertainty and engage new markets. In a survey that BVEP conducted over summer, 60 percent of their members said that this was the no. 1 priority for the events and meetings industry in the UK. “Lack of clarity is one of the things that’s holding us back,” Hughes says. “There seems to be a lot of confusion at the moment as to when we are actually going to leave and what form negotiations will take.”
One aspect that is clear is that the meetings industry and event sector employs a large number of people in the UK and there’s a high level of demand for staff. In a recent report, the Sector Skills Council for the tourism and hospitality industries estimated a need of 993,000 new staff by 2022 due to the growth of industry, since there’s already a skill shortage developing in these sectors more than any other.
2. Review existing legislation.“The big challenge is making sure we know exactly what key issues are going to be so when we get on the negotiation table, we know what we should be arguing to retain and to change,” Hughes explains. By looking at current legislation, organisations can argue to keep what works and helps business run smoothly, and negotiate out of any legislation that limits business efficiency.
3. Invest in UK infrastructure. Thanks to EU funding, some cities in the UK such as Liverpool and Manchester have significantly benefitted from major infrastructure projects put in place, boosting their offerings in terms of incentives and visitors. “Investing in UK infrastructure improves our competitive position in the market,” Hughes says. “As an industry, we’re very keen to see if that kind of infrastructure development and funding will be maintained by the British government on their own.”
4. Invest in people. “There’s a big question mark about what we’re going to do with people who work in the hospitality sector broadly—many of whom are from the EU—who supply great support to the hospitality sector in the UK,” Hughes says. If these people are no longer able to work in the UK, the question that comes next is how to skill and staff people for these positions or whether companies should fight for these people retain their rights to work in the UK because of their value to the economy.
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