Tim Cliffe - Blog

Effects on the United Kingdom Training and Development Industry, Post-Brexit

01 Target Audience

(01.1) Anyone concerned about the short to medium-term future of the United Kingdom (UK) Training and Development industry, after the UK leaves the European Union (EU), also known as Brexit.

02 Executive Summary

(02.1) The perceived uncertainties, surrounding arrangements for the post-Brexit era in the UK, are not all justified, in the short-term. However, the appeasement of uncertainties for the longer-term, will largely depend upon:

• UK immigration policies;
• The outcome of trade agreements with non-EU countries;
• How closely the UK is aligned with the EU, following any trade agreement.

 

(02.2) The perception of UK business, in general, with regard to the post-Brexit era, is also crucial, as the UK business sector, and beyond, drives demand for the products of the UK Training and Development industry.

 

(02.3) Recently, the main concerns voiced, regarding Brexit, have been around the areas of trade, immigration, and how companies in the UK (especially EU and foreign-owned companies), will react.

 

(02.4) What will happen, between the UK leaving the EU (2020-01-31) and January 2021, is clear. The period after that, appears less certain.

03 Structure of This Article

• (04) Brexit (2020-01-31) to January 2021
  • (04.1) Trade
  • (04.2) Immigration - EU Citizens Resident in the UK
  • (04.3) Immigration - EU Citizens not Resident in the UK
  • (04.4) The Intentions of Companies, Post-Brexit
  • (04.5) Conclusion
• (05) Post-Brexit Prospects for Training Budgets
  • (05.1) Post-Brexit Trade Deals
  • (05.2) The UK EU Trade Deficit
  • (05.3) Post-Brexit Business Behaviour
• (06) References

04 Brexit (2020-01-31) to January 2021

04.1 Trade

(04.1.1) The UK has left the EU, and the UK is entering a transition period, until 2021-01-01.

 

(04.1.2) The UK is able to continue to be covered by EU-third country trade agreements during the transition period. On this basis, EU trade agreements continue to apply to the UK ¹.

04.2 Immigration - EU Citizens Resident in the UK

(04.2.1) EU citizens, and their families, can continue to live in the UK, but will usually need to apply to continue living in the UK, after 31 December 2020, if they are from:

• The EU (except Ireland);
• Iceland;
• Liechtenstein;
• Norway;
• Switzerland. ²

04.3 Immigration - EU Citizens not Resident in the UK

(04.3.1) After Brexit, EU citizens who move to the UK will be able to apply for a 36-month temporary immigration status, which can be made after arrival in the UK. There will be no need for EU citizens, travelling to the UK after Brexit, to make any special arrangements in advance ².

04.4 The Intentions of Companies, Post-Brexit

(04.4.1) There has been a great deal of speculation regarding how attractive the UK will be, to national and foreign companies, after Brexit.

 

(04.4.2) Having removed the 'may-do', the 'considering' and others, it is very difficult to identify any major companies who have left the UK, due only to Brexit.

04.5 Conclusion

(04.5.1) At least until the end of 2020, it's pretty much business as usual for everyone.

 

(04.5.2) Even after January 2021, the EU citizens listed at 04.2.1 (not resident in the UK before Brexit) have another two years to finalise their status.

 

(04.5.3) Of course, business plans tend to be made more than eleven months in advance, and this is certainly true of budgets.

 

(04.5.4) Despite the next year being, essentially, business as usual, company bosses still need to make decisions about the future. As training is often the first casualty, in any financial turmoil, what will businesses decide for their training budgets?

05 Post-Brexit Prospects for Training Budgets

(05.1) Based on the above, a shortage of people is not going to materialise, for at least three years. Even after that period, the only limitations to people entering the UK will be their criminal record and/or their ability to meet stated skills requirements (points system).

 

(05.2) That leaves Trade Deals and how business in general, including the Training and Development Industry, react.

05.1 Post-Brexit Trade Deals

(05.1.1) The UK's trading position, for 2018, according to the Department for International Trade, is shown in the chart below. Japan and Hong Kong are included in 'The rest of the world'.

(05.1.2) However, this does not show the full picture. During the run-up to Brexit, the UK secured deals with 50 of the 70 countries and territories, currently having EU trade deals (approximately 8% of the 11% shown on the chart above).

 

(05.1.3) This means the only significant question left is the UK's trade deal with the EU, but how significant a question is it? Does a simple figure representing the UK's trade with the EU, 49%, tell the full story?

05.2 The UK EU Trade Deficit

(05.2.1) The UK’s trade performance with the EU has lacked balance. According to data produced by the Parliament.uk - Statistics on UK-EU trade [published 2020-10-11].
(External link, opens in a new tab/window). House of Commons Library [Published 2020-11-10. Note, the original report (published 2019-12-16) is no longer available], the UK has run a trade deficit with the EU, in goods and services combined, every year since 1999. What’s more, the deficit is increasing over time, doubling from £41 billion to £82 billion between 2012 and 2016.
If the above link is broken, Parliament.uk - Statistics on UK-EU trade [published 2020-10-11].download from this website.

 

(05.2.2) In striking contrast, the UK’s trading performance with 'The rest of the world' has improved. Exports and imports were broadly in balance from 1999 to 2011, but since 2012 there has been a five-fold increase in trade surplus from £8 billion to £39 billion.

 

(05.2.3) Trade with the EU comprises 49% of all UK trade, which represents a great deal of activity, and employment.

 

(05.2.4) However, it is clear, based on UK Government trading figures since 1999, the opportunity for surplus trading, for the UK, is only possible outside the EU. In short, the EU needs the UK far more than the UK needs the EU, as far as a UK trading surplus (making a profit to reduce the national debt) is concerned.

 

(05.2.5) When it comes to a trade deal, between the UK and the EU, whatever may be reported in the media, both sides are aware of these facts, which actually puts the UK in a strong negotiating position.

 

05.3 Post-Brexit Business Behaviour

(05.3.1) When it comes to decision-making, any decision-making, perception of the facts is more persuasive than the reality of those facts.

 

(05.3.2) If UK business perceives the post-Brexit era as negative, the training budgets will vanish first, and the UK Training and Development industry can look forward to hard times, for some time to come.

 

(05.3.3) However, if more pragmatic and rounded views are adopted, taking account of the realities of immigration, and the UK's significant improvements in trade with the rest of the world, together with its strong bargaining position with regard to trade with the EU, I believe the future is bright for our industry, in the short, medium, and the long-term.

 

(05.3.4) Of course, it will be very helpful if our politicians deliver the 'trade agreement goods' with the rest of the world and the EU.

06 References

1. GOV.UK. GOV.UK
   (External link, opens in a new tab/window). UK trade agreements with non-EU countries. Accessed 2020-02-05.
2. GOV.UK. GOV.UK
   (External link, opens in a new tab/window). Continue to live in the UK if you're an EU, EEA or Swiss citizen. Accessed 2020-02-05.

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