On Thursday, the 23rd of June, 72% of the UK population proudly stood up, asserted their independence and voted for Brexit. Well… 52% of that 72% did. But what have we really voted for? There was a lot of conjecture about the impact it could have, but a surprising lack of concrete information available to the public. So what will the Brexit Impact on B&I be? It wouldn’t have been an unreasonable expectation that initial trade discussions with the EU and other trade partners had taken place prior to the referendum to at least indicate how our future may pan out or to have a clear plan of how we would approach our move to independence. Instead, the lack of a plan is led to our political parties being thrown into turmoil, our currency has devalued to one of the lowest rates in 30 years, race hate crimes have increased, UK investment, growth and property values have declined, there is risk of a fragmented UK with Scotland and Northern Ireland potentially moving towards independence and we are still no closer to knowing what the future plan and full impact will be.
So how will it affect those of us in B&I catering community? In my view, not positively.
Some effects such as import tariffs, and rising labour costs will only impact prices once we actually leave the EU, but if the recent significant falls in the value of sterling continue we expect to see prices increasing by the end of summer. The UK runs a £21bn trade gap in food. We produce about 60% of what we eat. Almost 70% of our imported food is from the EU. With sterling’s fall against the dollar, euro and many other currencies all our food and drink imports will be affected.
Many have speculated that Brexit would cut through the red tape of EU food regulation. This is not likely. In order to continue to import and export food to the EU, the UK would still be subject to EU food regulation, without having the opportunity to shape its developments in the European Parliament.
In addition to this the UK would most likely be trading under the rules of the World Trade Organisation (WTO), meaning that over 100 new trade agreements and import tariffs would have to be re-negotiated.
The Labour Market:
There is currently a skills gap in the industry of about 100,000 people. Food service businesses employ chefs, waiters and managers from across the EU – there is no doubt that labour availability could be a major risk for the future.
If the UK is not seen as a stable home for investment, growth and recruitment, it may not be as attractive to international investors and may not be the place of choice for many large multinational who choose to base themselves out of the UK.
Of course, these things don’t have to happen. There is no doubt that there will be, and already is, a temporary period of pain that we will have to suffer through. Yes, these, plans should have been thought through before the referendum was even considered, but we still have almost two years to sort ourselves out and, with good forethought, diplomacy and strong negotiations, we could end up as good or even better off than we were with the EU. The British people are a resilient bunch. We’ve taken a bit of a gamble at this stage; let’s all hope the gamble pays off.