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The Actuary The magazine of the Institute & Faculty of Actuaries

Post-Brexit prosperity depends on no sector of the UK economy ‘being left behind’

The UK’s negotiations with the EU must result in all sectors of the economy having their needs met, with failure to do this potentially resulting in knock-on effects to others according to the Confederation of British Industry (CBI).

Government must take a ‘whole economy’ approach when leaving EU ©Shutterstock
Government must take a 'whole economy' approach when leaving EU ©Shutterstock

Their Making a Success of Brexit report highlights the complexity of the modern economy, where no business operates in isolation, with services overlapping and many companies not fitting neatly into a single sector.

It argues that the success or failure of some sectors could affect others, with the future of financial services regulation for example, affecting firms in the automotive, real estate and retail sector, given the role they play in finance, insurance and pensions.

CBI director-general Carolyn Fairbairn, said: “Businesses in every corner of the UK are rolling up their sleeves as they prepare for life outside the EU and are committed to making it a success.

“Leaving the EU will be a highly complex process, and all sectors of the economy are making their priorities clear in order to get it right.

“The modern UK economy is ever more interconnected. Legislation in one sector can have a knock-on effect in many others.

“The government will need to take a ‘whole economy’ approach to avoid leaving sectors behind.”

The CBI have consulted with thousands of trade associations and firms since the referendum, discussing the opportunities, concerns and questions they had ahead of EU negotiations next year.

It was found that many questions are shared by businesses across sectors, such as:

• Airlines – and the wider aviation sector, which employs nearly one million people - are asking how the government will seek agreements that allow the smooth transport of holiday-makers, workers and goods, as are logistics companies, haulage firms and retailers

• Restaurants are asking how they will continue to hire chefs from abroad, while companies in the chemicals and plastics sector - which export around £30bn worth of products each year - are asking whether they will still be able to access the skilled employees they need at their plants. This is also an issue for logistics firms who already face a shortfall of nearly 35,000 HGV drivers

• Construction companies – which will build the UK’s new homes, roads and rail in a sector worth over £100bn to the UK economy - are asking about the potential costs of importing materials and the future of the CE marking regime, as are many manufacturers

• Creative industry – which employs nearly 2 million people across music, film, video games, architecture and more - are asking about the future of Intellectual Property and data flows, as are life sciences businesses, technology companies and others.

Fairbairn continued: “While each sector has issues specific to them, there are many crossovers and common principles that unite them, for example the need to avoid cliff edge changes that cause disruption to supply chains and trade.

“Where companies differ is how they prioritise these issues and the contrasting emphasis they place on trade, migration and regulation.

“To make a success of Brexit for the whole economy, government needs to work through all these issues, as well as seize the opportunities afforded by a new focus on the UK’s global economic relationships.”

The CBI has identified six common principles shared across sectors:

• A barrier-free relationship with the EU

• A clear plan for regulation

• A migration system which allows businesses to access the skills and labour they need

• A renewed focus on global economic relationships, with the business community at their heart

• An approach that protects the social and economic benefits of EU funding

• A smooth exit from the EU, avoiding a cliff-edge that causes disruption

“The CBI will work closely with the government to deliver an outcome that helps to meet the needs of firms throughout the UK, building a post-Brexit economy that spreads prosperity to all,” Fairbairn added.