‘Access to skilled labour is a concern’
Warren Gray is the managing director of Redditch-based Machined Component Systems, established in 1986 by his father Jim. Gray voted remain, albeit reluctantly, as his 32-strong company exports to Europe and also hires engineers from across the EU. He felt the uncertainty Brexit poses was not worth the risk. Gray wanted to know more about the impact on trade, immigration and the unity of the UK, and feels answers have still not been delivered.
“There were no real answers to any of these questions during all of the debates that took over every media stream going,” says Gray. “Even today, we’re still no wiser on how things will look. Without the answers to these key questions, I voted reluctantly to remain.”
Since the vote, though, Gray says the depreciation of the pound has given the company a competitive advantage, although some input prices have risen. “It appears that the drop in Sterling may have had a positive effect on our customers’ ability to sell overseas and we are experiencing strong demand, at least in the short term. One negative is the material price increases starting to emerge. For example, our oil supplier has already submitted an eight percent increase.”
Gray adds that he wants to provide more jobs to local people but that both government and the sector have failed to do enough to ensure there are enough trained people. “Access to skilled labour is my major concern. In my opinion, we have had, and continue to suffer from, a failing education system that is not producing enough appropriately skilled engineers. We would all love to give jobs to local people. The reality is that there aren’t enough of them with the right skills that will help my business and I can’t see that changing in the immediate future.
‘We relish the freedom to travel without borders’
Andy Peck is the CEO at Brighton-based TrustedHousesitters.com, which he founded in 2011 and which employs 27 people. Peck was staunchly in the Remain camp and says his business, which enables people to find others to look after homes and pets when they are overseas, benefits from staff being able to travel freely. “We believe in the freedom to travel and where possible, to do so without borders. We see Europe as our neighbours,” he says.
Peck also likes the fact that his company is able to hire people from across Europe. He says his business requires talented and qualified people and he is fearful about the impact of immigration restrictions. “As we’ve grown, we’ve hired qualified, talented people to take development and engineering roles in our business, from both the UK and Europe, and we don’t want this growing pool of talent to be restricted.”
However, as a business offering house and pet sitting services, the weaker pound has helped spur both domestic and international demand. “As the pound weakens, the UK has become great place for people to come and visit from overseas,” Peck explains. “Also, for people from the UK who have concerns over holiday costs, we’ve seen an increase in families and individuals who decide house sitting is a better holiday option.”
‘The UK is well-placed to do business with the world’
Steve Magnall is CEO of Suffolk-based St Peter’s Brewery, which employs 47 staff and exports about half the beer it produces. Magnall voted to leave as he was concerned with the growth of the political power of the EU, although he is in favour of free trade and free movement of people. “I do believe we were being drawn into a Federal State with Europe and losing control of our own legislation and powers,” he says. “I also have a fundamental problem paying £9bn for the privilege of membership.”
Since the referendum, the business has seen trade with Europe increase by 10 percent, although trade with the rest of the world has fallen slightly. Magnall isn’t convinced that Brexit is the most important factor affecting the future of his business, suggesting the price of oil and the development of the global economy is more relevant. However, the company currently sources its glass bottles from Spain and this input price could be affected. “Our glass comes from Spain and will become more expensive once our Euro hedge finishes – we hedged at 1.4 euros to the pound – but I see that as a normal part of business. We can also look for alternatives later if costs are too high,” he says.
But Magnall believes the future is bright and the UK is well placed to do business with the world. “I am very confident about our business and the future. I do not believe there will be loads of tariffs applied, because whilst Europe is a big customer of the UK, it works both ways. It took seven years for Canada to negotiate a free trade deal with Europe. People will point to that as how bad it’s going to be. I point to that and say: ‘that’s why the EU doesn’t work as it is.’”
‘Perverse EU legislation is harming my business’
William Fugard is MD of drinks company Gusto Organic which directly employs five people across the south of England. Fugard says his business, which makes a cola drink from organic ingredients, is being negatively affected by “perverse” EU legislation which means that drinks containing organic sweeteners cannot be defined as organic. “There are currently no low sugar organic drinks products on the market due to EU rules on organic and natural sweeteners, such as Stevia leaf,” he says. “The EU has decided that organic products cannot be sweetened with organic stevia leaf. Even though it is available, internationally certified and used in numerous organic products in other countries.”
The company briefly got around this by moving its Cola drink manufacturing to the United States. The drinks were then shipped back to Europe and fell under equivalence rules which meant it could be certified as organic. But this was problematic and expensive and, earlier this year, manufacturing was moved to Austria. However, as a result, it has had to remove the word ‘organic’ from its packaging, which has led to it being delisted by some retailers. “We are producing an organic product, using premium organic ingredients, but we cannot tell the consumer this due to inconsistent and arbitrary EU legislation. It would take agreement from 27 states to change these rules and so it is just unworkable,” Fugard says.
Fugard, who voted to leave the EU, says he hopes the UK will benefit from better trading relationships. He also says that the single market comes with more restrictions than many people realise. “With Brexit there is an opportunity for areas of food legislation to be in line with the USA and the rest of the world, where legislation is evolving and progressive,” he says. “Also, there is a popular misconception that the EU is an open access market for goods and services. As far as food and drink are concerned, there still remain barriers between member states.”
Content on this page is paid for and produced to a brief agreed with Worldpay, sponsor of the Supporting Business Growth hub on the Guardian Small Business Network.
