UK'S LOOK EAST POLICY

Priyanka Mehta Tuesday 28th January 2020 13:05 EST
 
 

The UK has finally left the EU. The Brexit countdown of the last 1,300 days ended the political careers of two prime ministers, witnessed three general elections in five years and saw the Pound plummet against the Dollar. But now that prime minister Boris Johnson has got Brexit done, the next question that remains is: If we – businesses, security advisors, bureaucrats- are Brexit ready?

Free Trade Agreements out of the EU

“Brexit will be the biggest political change our country has faced since the Second World War. Adjustments will have to be made and there will undoubtedly be some challenges faced during our transition.

“However, Britain is one of the most resilient countries in the world and I have no doubt that we are prepared for this transition, mainly because of the benefits Brexit will bring as demonstrated by the trade agreements signed recently with 11 African countries,” said Lord Dolar Popat.

The UK-Africa Investment Summit conducted last week highlighted that these agreements cover over 40 per cent of the UK’s total trade with Africa. Now there are seven more in the pipeline alongside securing several other trade deals with a further 35 countries. More fundamentally, some politicians also believe that Brexit can open the trade corridors of other developing countries such as India. Conservative MP for Harrow East Bob Blackman in a statement to Asian Voice said,

“If the UK and India were able to negotiate a free trade agreement once it leaves the EU, UK-India trade could increase by 26% per year.”

MAC Immigration advisors recommend lowering salary threshold to £25,600

But, it must be noted that the single largest deterrent in the culmination of a UK-India Free Trade Agreement is visa entry requirements for Indian professionals and students. On 27th January Monday, home secretary Priti Patel asserted that businesses were “far too reliant” on “low-skilled” and “cheap labour” from the EU. Reports earlier had also indicated intra-government tensions on post-Brexit divergence from the EU rules as laid out in Brussels which the home secretary has emphatically denied. Patel’s idea of taking back control of “our borders” however, seems to be in a slight contradiction to the latest report published by the Migration Advisory Committee (MAC). The government’s immigration advisers have recommended that the main salary threshold for workers coming to the UK with a job offer should be slashed to £25,600 per year after Brexit. The current threshold is £30,000 a year, but it applies only to people from outside the European Economic Area.

The Conservative MP for Harrow East, Bob Blackman has been aiming for developing better UK-India bilateral relations in a post-Brexit climate. He says,

“More than 1 million people of Indian heritage live in the UK. However, skilled workers, students, and tourists find the migration system hard to navigate, expensive and unwelcoming.

“Facilitating the movement of these groups is inseparable from the goal of increasing trade with India. Previous government policy has been driven by the single-minded objective of reducing net migration. And as a result, Britain has lost ground in attracting Indian students and tourists.”

Scottish visa, London visa?

In the meantime, the Liberal Democrats mayoral candidate for London is campaigning to ensure that London continues to maintain its business-friendly climate and remains open for all. Whilst SNP’s Nicola Sturgeon has called for Scotland to have its own visa (Scottish visa) and an immigration strategy for the country, Siobhan Benita is now campaigning for a London visa. In a statement to Asian Voice, she said,

“We need to forge new partnerships and present London as a global leader. I am calling for London to have its own visa as part of the Government's new immigration system. That means as Mayor I would be able to target the specific needs of the capital and recruit the talent we need.”

Responding to the MAC report, a spokesperson for the London Chamber of Commerce and Industry (LCCI) said,

 “As a global city, London has a greater reliance on international workers than the rest of the UK, and LCCI and others have advocated that a new UK migration system should have a degree of regionalisation. But the MAC do not propose regional variations in the salary threshold and do not recommend, at this stage, reviewing the Shortage Occupation Lists tier.   

“The Mayor of London previously said that if satisfactory migration proposals for London were not put forward, he would look at alternative options.  We encourage him to bring London’s business and civic leaders together to discuss next steps.”

Boris bounce” perks up the property sector but SMEs?

This continuing uncertainty around visa and immigration systems has stumped growth in various financial and hospitality sectors such as the curry industry. Whilst the “Boris bounce” seems to have perked up the property industry, the same perhaps cannot be said for Small and Medium Enterprises (SMEs). Raising his concerns around the salary thresholds for immigrants, Mike Cherry, National Chairman of the Federation of Small Businesses said,

“Many small businesses are concerned about the Government’s plans to extend the £30,000 salary threshold to all skilled non-UK nationals, including EU citizens, once the Brexit transition period has finished.

“With overheads for small firms mounting – not least due to rising business rates, utility bills and wider staff costs – the extension of the threshold threatens to cause serious disruption to a labour market already beset by skills shortages and limited vacancies.

“The challenge now for the government will be to have a new, employer-responsive immigration system in place in time for the end of the transition period eleven months from now, and allowing sufficient time for small business employers to prepare.

“Attention now also turns to negotiations of a new comprehensive trade deal with the EU and whether one can be struck within the challenging timescale. Securing this agreement is critical to the many small businesses that trade with the EU single market and EU customs union. We want these businesses to have tariff and quota-free access as well as seeing non- tariff barriers kept to a minimum.”

Travelling to the EU

In light of this, a recent YouGov study commissioned by UK Export Finance, the government’s export credit agency, found that a post-Brexit decade would herald increasing export opportunities for SMEs in the UK. Over 1000 SMEs had been interviewed for the survey. 

Ricky Kothari is the Founder and Head of international development and exports at T-Sticks, London. Amidst the Brexit uncertainty, his company has been scouting for a potential market space in the UAE and established some presence in the US as well. Speaking about operating his “tea-in-a-stick” start-up in the post-Brexit UK, he said,

“Brexit has impacted our communications process with our existing clients based in the EU. These clients were asking for current prices and tentative prices post-Brexit before even placing their orders with us. Also, we realised that new clients were rather reluctant to conducting any business with us owing to the uncertainty.

“Therefore, we have now set up our warehouse in the EU. So that materials and ingredients are sourced from the EU and now the bulk of our production is also placed in the region. But our warehouse team in the UK have all been granted residency here. Therefore, travelling to the EU remains my major concern.”

However, travel agents are certain that after Brexit all transport systems will be operating to and from the EU, and around EU countries as usual. British passport holders will continue to be able to travel and work in the EU as the UK remains in the single market for the transition period up to 31 December and the freedom of movement of goods, people, services and capital over borders applies until then. New rules will come and apply only after 31st December 2020. The next date to watch out is January 1, 2021.

“UK travellers won’t need a visa to travel to the EU after Brexit. Valid passports can still be used. You do not need to have six months left on your passport to travel to the EU. The European Health Insurance Card (EHIC) also allows any EU citizen to access state medical care when they are travelling in another EU country. But it is always advisable to recheck with your Travel agent when making bookings,” concluded Rajan Sahgal, Chairman of Skylord Travel Plc.


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