Welsh firms reveal their Brexit nerves
Prime Minister Theresa May yesterday signed the letter triggering Article 50, starting the process that will see Britain leave the EU. With the rights of EU nationals and UK expats likely to be among the first things discussed following the triggering of
The Abbey Cleaning Service
One business that relies on EU nationals is the Abbey Cleaning Service. The Cardiff-based company recently signed the largest deal in its 30-year history, agreeing to support Wales’ largest skills and employment provider Itec.
The deal means Abbey Cleaning will support the training company’s seven offices in South Wales, creating a further 10 jobs.
The company has 31 staff, with EU nationals making up 17% of its workforce. Despite the recent rise in staff numbers, many Abbey workers have been with the firm for a number of years, but now feel their futures may be threatened by possible changes to their right to remain in the UK.
Director Adrian Harvie said he was concerned by how the uncertainty of Brexit could affect his staff: “We take great pride in high levels of team retention, something that is generally uncommon in the cleaning industry. We attribute this to the strong family environment at Abbey.
“There has been some concern raised from members of the team as to what will happen once we leave the EU and how the permanent residency system will work.
“We’ve looked into putting together some information packs and discussing the issue with relevant team members, as the sheer amount of paperwork needed to apply for permanent residency is alarming. With applications likely to heavily increase following Article 50, we are advising staff to apply as soon as possible.
“From a business perspective, losing just under a quarter of our workforce could be very disruptive.
“This industry also sees a great level of rapport between staff and clients, something that takes time to build.
“From a personal standpoint, the fact that any uncertainty exists over the right for friends and family to remain in the UK is disturbing and it is an issue that needs further clarity.” DevOpsGuys For some businesses, it’s the loss of skills that many EU nationals provide that concerns them.
DevOpsGuys is a software development and information technology company that specialises in practical engineering and consultancy solutions to accelerate the way organisations deliver software.
They have worked with a number of notable brands including BAE Systems, Waitrose, ASOS and Vodafone.
Co-founder Stephen Thair said they had strong concerns about the rights of their EU workers and the skills gap they bridge: “We employ a number of full-time staff and contractors for UK-based roles, some of whom are from EU countries like Spain, France and Poland. The fact that the UK has a significant IT skills shortage is well-known and anything that introduces friction or costs into attracting and hiring the best talent impacts our ability to grow.
“This is an impact that falls disproportionately on high-growth SMEs as opposed to the hyper-scale global systems integrators, who have the resources to sponsor visas and pay legal fees.
“There is also the concern that as we expand our business to deliver more services to EU-based clients, we might be blocked from delivering those services via UK-based staff due to security and data sovereignty laws. If we have to scale up our EUbased operations in order to deliver those services, that increases our costs and takes jobs away from Wales, hurting the local economy. Anything that stops Welsh SMEs competing in the EU and globally is bad for business.”
The Youth Development Agency
Freedom of movement is an issue also closely connected with the rights of EU nationals and is likely to feature heavily in Brexit and trade discussions. This is a particular problem for Welsh businesses who work through associates in EU countries.
The Youth Development Agency delivers educational programmes across the world. With its headquarters at the Welsh ICE in Caerphilly, founders David Williams and Dale Esau have a combined experience of over 40 years in international education and deliver programmes ranging from building igloos in the French Alps to expeditions in Tuscany.
Mr Williams said the right to free movement was the biggest concern: “Whilst we do not directly employ any EU nationals, we are largely reliant on them working for us on a contract basis. For example, two of our trainers are based in Malta but needed for a Cyprus project. We move people around the EU constantly to meet demand for our business and have worked with about 20 EU nationals already this year.
“As we plan to mitigate these issues, we have to give serious consideration to taking our business out of Wales and locating it within a eurozone country. This is not a decision we would make lightly, but with so much uncertainty it may prove to be the safest option.” Haum While the lack of clarity on EU workers is disconcerting to many businessowners, there are also many EU nationals founding and running businesses in Wales.
Haum is a graphic design and branding agency based in Roath, Cardiff. It is run by two designers from Portugal, Renato Pequito and Rita Pequito.
Renato, who has lived in Wales since 2005, said he was concerned that a lack of clarity for EU nationals affected him personally and the wider business community.
He said: “I see this level of uncertainty as a real hindrance for our future business planning. Once the UK is out of the EU, what will happen to the EU citizens living here? Will we need visas? Will we be able to secure jobs or will there be other taxations and charges? For example, will we need to make new arrangements for use of the NHS?
“I feel this is a huge step backwards for business development in Wales, both in terms of funding and culture.
“Being part of the EU means we have a mix of cultures in our city and this finds its way into some of our most impressive emerging businesses. You only have to look at the work done by businesses such as Bar 44, Hellenic Eatery, Nata & Co, Brød, Café du Chat Noir, Cocorico Patisserie and the up-and-coming Lia’s Kitchen, which teaches about unknown Greek food.
“Will these thriving locally-based businesses be stifled by this uncertainty or penalised by any enforced laws, taxations and costs? These businesses bring the tastes of Europe to our city – how awesome is that?” Four Minutes Four Minutes – named after the time window to prevent brain damage in someone not breathing – is the Welsh arm of First Aid Greece, founded in Glyfada, Athens, in 2008. The company, which still maintains its Greece office, recently expanded to Wales and is based at the Welsh ICE campus in Caerphilly.
Founder Fotini Teneketzi said she was worried about the message the uncertainty on EU nationals sends: “I really can’t imagine that EU nationals will be forced out of the UK, leaving husbands, wives, children and businesses. Surely this would work both ways, and British expats would be expected to return to the UK – but with roughly 1.3 million expats living in Europe, I can’t see how workable that would be.
“I am also concerned that there will be a rise in prejudice towards EU nationals in the UK. This doesn’t have to be overt racism – if the structure of laws or taxations means that it is more expensive or difficult to do
business with an EU national, that can make it harder to generate new business and may close a lot of doors.”
On the broader issue of Brexit, Ms Teneketzi said the decision for the UK to leave the EU is championed by many back in Greece: “The feedback from friends, family and colleagues in Greece is that the UK is seen as heroic in having the courage to break away from the EU. Debt, austerity and EU membership has become a massive burden to Greeks and the future there looks bleak.”
Ramptshirts. com
Uncertainty over EU residents’ right to remain in the UK is just one side of the Brexit coin. There is also a concern for UK residents living and working in the EU, with a potential backlash from countries who find their nationals are no longer free to remain in Britain.
One concerned expat is Neil Cocker, CEO of Ramptshirts.com. Ramp is a T-shirt ordering site for teams, companies and events that has supplied household names such as Google, Virgin Media and Myspace.
The company has offices in Cardiff and Sofia in Bulgaria, as well as print facilities and partnerships in the UK and across the USA.
Mr Cocker said the company is in a no-man’s land of uncertainty: “There appears to be very little clarity or guidance available for companies like ours, especially as we have limited resources to devote to research and analysis for the likely outcomes.
“Although our headquarters is in Cardiff, it was far more cost-effective to run much of the business out of Bulgaria, where our cofounder is based.
“When I moved out to run the Sofia office, it was completely open-ended, with zero restrictions on my movement. I had no paperwork to fill in – I just got on a plane with my passport and six months later we had assembled a small team of staff. Now, not only will there be uncertainty over my right to remain in Bulgaria, but we have to worry about implications if we wish to bring any of our Bulgarian staff to Cardiff.
“The inevitable extra layer of bureaucracy to deal with the movement of staff, including one of our founding directors, means we will be less agile and that will take getting used to.”
Datrys Civil and Structural Engineering
The concern is not only being felt in sectors such as digital and creative but in more traditional industries such as engineering.
Paul Williams, managing director of Datrys Civil and Structural Engineering, based in Caernarfon and Mold, explained how his business’ growth could be adversely affected if it was no longer able to recruit so many EU engineers.
He said: “Datrys has without doubt benefited from the free movement of people across the EU. Over the last three years, we have employed high-quality engineers from Greece, Italy, Hungary, Portugal and Ireland who have contributed very positively to our company and our clients.
“If Brexit means that some members of our staff feel less welcome or have second thoughts about working here, it would be a tragedy. It would certainly impact our business in a very negative way.” Farming and food production Most farmers in Wales do not employ significant numbers of EU nationals, but that doesn’t mean the food sector will escape the impact of Brexit uncertainty on the rights of EU nationals, as Farmers’ Union of Wales head of policy Dr Nick Fenwick explained.
“In stark contrast to farmers in areas of the UK where horticultural production predominates, the vast majority of Welsh farms have no reliance on migrant workers,” he said.
“Notwithstanding this, there is significant reliance on migrant workers in terms of the food processing sector across the UK and in particular in the slaughtering industry in Wales.
“It is important to note that such workers can remain in the UK for many years and therefore fall into a very different category to the sorts of seasonal workers from the continent who work as fruit-pickers etc.
“Moves which restrict access to such labour may have repercussions which are passed back to primary producers, and significant concerns therefore exist regarding the potential impact of movement restrictions, including in terms of the intrinsic relationship between unfettered access to the single market and free movement.
“We have not, to date, received reports from members who have been adversely affected by uncertainty amongst immigrant workers. However, food trade bodies have reported difficulties in terms of recruiting or losing staff. These are thought primarily to be due to the exchange rate being less advantageous for migrant workers than it was previously, rather than any uncertainty over residency.”
A lawyer’s view
Both businesses and affected workers are already seeking advice on the legal position, even though likely developments regarding EU nationals remain uncertain.
Fflur Jones, partner and employment specialist at Darwin Gray, said existing UK employees could ultimately bear the brunt of continued uncertainty or negative changes to EU nationals’ rights: “Many employers are expressing concerns and seeking advice regarding the potential impact of the return of EU workers to their home countries post-Brexit. Employers’ biggest concerns are that they will not be able to find suitable replacements from amongst UK nationals to fill key jobs.
“Some employers are seeking advice on what support they can offer their employees to get to stay in the UK and the number of employees now seeking immigration advice has soared.
“The NHS and seasonal industries are also likely to be severely hit, and unless the UK Government can offer incentives for UK nationals to work in those industries or accelerate training programmes to ensure that the country has adequate numbers of people with the right skills to perform vacant roles, it is likely that existing employees and workers will find themselves severely overworked.”