FIA CEO Ian Moore gives his view on the situation

12 November 2017 by Ian Moore, CEO

It was clear during a recent panel discussion that there are little or no guarantees to what the future holds post BREXIT, not just for the fire industry, but as the United Kingdom as a whole. All we can do is to ensure our voice is clearly heard in a number of areas that directly affect us. Some of those areas are: -

  • Immigration (skilled and unskilled workers)
  • Relationships with EU members
  • Exchange rates
  • Will it affect standards / certification?
  • Tariffs on imports and exports into EU

We should also be positive by looking at the new opportunities that have and will continue to come to us; as an example I have had a number of enquiries from overseas trade associations that now believe we will be looking for stronger relationships outside of the EU. These relationships could open the doors to improved export prospects.

Let us start by discussing the areas above and how I think it will affect us starting with immigration. The fire industry is directly linked to the construction industry, which is useful as there are so many statistics available from this well-discussed sector (such as from the CBI).

Without getting involved too heavily in politics, we have needed immigrants on many occasions over the years. The construction industry needs a large number of unskilled and semi-skilled workers as it is so labour intensive and with a restriction on the free flow from EU countries, the necessary manpower requirements will be difficult to achieve.

We do have UK citizens that could take some of these roles but are they as willing or, in some cases, as skilled? Either way I expect the construction industry will have to pay more for its labour. As for the skilled labour market, putting up barriers (or making it more difficult) to entry will deter much needed talent and undoubtedly again the construction industry will suffer.

 

Building a relationship with Europe

With the vote to exit the EU, we have the opportunity to re-create our relationship with Continental Europe in a positive one reflecting the 5 UK virtues of military, diplomatic, intelligence, trading and finance rather than a drive to integration which we will never understand their need of.

Look at Norway and Switzerland – their relationship (trade, respect etc.) appears strong with EU members with both sides apparently happy with their state of affairs. We have a lot of work to do to form or reform that bond of mutual respect which will hopefully lead to strong trading relationships. One thing I would add is that we should not to get too pessimistic about trade with EU countries. It is mutually beneficial and has been for hundreds of years; can you imagine the Germans not selling us cars or the French not selling us wine?

 

Exchange rates

Probably the most visible indication post announcement to leave the EU was the dramatic exchange rate changes. The pound slumped to a 31 year low following the BREXIT vote.

The continued slide in sterling since the Brexit vote has hit us hard, in fact this week some airports offered less than €1 to £1, which warned of the impending financial squeeze to UK travellers at EU destinations (meals, coffees, drinks and other items are typically at least 22% more expensive than a year ago).

There has, however, been a benefit for the British economy with recent official data showing that retail sales leapt 1.4% in July following a drop in June – apparently helped by an influx of big-spending overseas tourists from outside the EU.

 

How does this affect the fire industry?

Companies that are buying in systems, components, or services from overseas are paying a higher price. The fire industry, through a recently commissioned report by the FIA on market conditions, clearly shows a decline in export growth in the region of 10% which is a clear indicator of the pressure this is bringing our exporters.

 

FIA Market Condition Review WAVE 9 (002).pdf

 

On the positive side, it has never been such a good time to be a UK manufacturer; look at what we have available to us at the MTC (Manufacturing Technology Centre) and what is on offer from the  UKEF (United Kingdom Export Finance).

The MTC, which I recently introduced to our FIA members by organising a tour of the facilities, was established in 2010 with the objective of bridging the gap between academia and industry. It represents one of the largest public sector investments in UK manufacturing to cover not only R&D but also training, advanced manufacturing management and factory design. It has already helped hundreds of companies across a range of industries and stands ready, able and willing to help the fire industry. The UKEF, again recently introduced to the FIA membership by our representative Dr Carl Hunter, has a range of innovative and useful ways to financially support SME’s and have been formed to ensure that no viable UK export fails for lack of finance or insurance. Use them!

 

Will there be a change in BS and EN standards?

When we leave the European Union, what will happen with reference to the BS and EN standards? This is an area we as lobbyists can have the greatest influence. As much as there has been a “don’t worry – it will be business as usual” message from BSI, there is still concern to what degree it will be “business as usual”.

BSI as the UK National Standards Body has been working with our stakeholders to communicate the key messages about the vital role of standards in supporting trade, growth and productivity. Is now not the time for them to re-assert themselves globally as they were 20 years ago?

BSI state they will maintain the UK’s membership of the three European standardization organizations CEN, CENELEC and ETSI. To be clear - CEN and CENELEC are private organizations outside the EU, coordinating the work of 34 countries in the making and the dissemination of European Standards (EN). Membership of CEN and CENELEC is linked to the adoption of European Standards and the withdrawal of conflicting national standards, facilitating market access across EU member countries.

It is BSI’s ambition, and also its confident expectation, on behalf of UK stakeholders, for the UK to continue to participate in the European standards system as a full member of CEN and CENELEC post-Brexit given the private status of these bodies. Remaining as a full member would bring maximum benefit to the UK fire industry economy in its new status outside the EU because reciprocity of market access will reduce complexity for SMEs and consumers, ultimately saving time, money and effort whilst ensuring product quality and safety. On a World stage membership of the two international standardization organizations, ISO and IEC, will be unaffected by a UK exit from the EU.

 

Export

The subject of tariffs on imports and exports into and out of the EU is a complex one that is being negotiated by a powerful group within Government. I think though that we can rely on the continuation of trade at a high level (remembering of course that the EU is our biggest trading partner by some way) as it is mutably beneficial as I have mentioned previously.

To give my simplistic view on this I would use an analogy of wine importing; if the EU raises the price of wine to such a degree from all its member states due to high tariffs, we will buy wine from Australia, should Australia want to raise prices to take advantage then we will buy from Argentina etc. etc. This is the way of the World shown throughout history.

Let’s not forget on the export side we have the best products in the World with tried and tested technology to match our strongly regulated regime. Other reasons to be optimistic for our future is to remember that we remain a key member of the G5, permanent members of the United Nations Security Council, NATO-2 and head of 53 nations of the Commonwealth containing the 7 fastest growing economies.

 

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