Manufacturers fear loss of foreign skills

Manufacturers in the UK fear that their ability to attract overseas talent will decrease now that the Brexit transition period is over, according to a major survey.

David Sapsted

12 January 2021

Although the government has repeatedly said the new, points-based immigration system, which came into force on January 1, would enable firms to hire "the brightest and the best" from across the globe, manufacturers are voicing serious doubts that this will be the case for their industry.A third of the companies in the survey, conducted by the manufacturers' organisation Make UK and PwC, said they believed the UK’s ability to attract international talent would now decrease, with only 11 per cent believing the UK would be a more attractive destination now that it was outside the EU."This potentially puts at risk the ambition of the government’s new immigration system, which is specifically designed to encourage the best talent to come to the UK," according to Make UK.The survey of executives at more than 200 companies also found that post-Brexit customs delays and increased costs of regulation were among biggest risks to supply chains, along with persistent fears over further Covid-19 lockdowns.On the plus side, a quarter of firms said they were now looking at re-shoring overseas activities; many expected productivity and recruitment to pick up; and investment in new products, digital technologies and training was seen as the principal route to build future resilience.Additionally, 30 per cent of companies said they were planning to enter new markets in 2021, with Asia and the US being the prime targets for expanding exports.While Brexit was expected to suppress exports to the EU this year, manufacturers "are already demonstrating the agility required to navigate the uncertain trade environment by proactively seeking out novel export opportunities in fresh markets", according to Make UK.Cara Haffey, manufacturing and automotive leader at PwC UK, said: "The EU trade deal, taken alongside the positive progress with both Covid-19 vaccines, will give business leaders the confidence to start planning for the future with greater clarity.

"With as many as four in five UK firms either developing or already delivering an enhanced service offering to their clients, it’s crucial businesses are able to swiftly respond to our new relationship with the EU, especially relating to people movement, if they are to remain competitive in an increasingly customer focused global stage."I found it heartening to see that so many respondents are focusing on strengthening business resilience by investing in their people and diversifying their trade models in 2021."UK manufacturers are resilient by nature and, with the right investor and government support, their agility and drive will enable them to build new trade networks and embrace the clean, green digital revolution, ensuring the UK remains a go-to destination for many more years to come."Stephen Phipson, chief executive of Make UK said the post-Brexit transition to new trading arrangements with the EU was always going to be the biggest challenge facing manufacturers this year and the fact that a trade deal had been reached with Brussels did not alter that."However," he added, "just as the sector rose to the challenge of aiding the national effort at the start of the pandemic, it is clearly set to do so again as we re-build the economy and take advantage of the opportunities from digital technologies."To ensure we cement the role of industry in the future economy we need to see a strategic vision from government for the whole economy across the UK. This must go way beyond short-term tinkering and involve an industrial strategy that takes at least a decade-long horizon with the whole of government putting its shoulder to the wheel to deliver it."