In the wake of the Brexit vote, social media has gone into override with reactions and opinions about what this now means for the British economy. David Cameron has resigned as Prime Minister, the value of the pound against the dollar has fallen to a 31-year low and the FTSE 100 has taken an expected hit, opening almost 7% lower after the historical EU referendum.
The UK voted by 52% to 48% to leave the EU following the referendum. Turnout was 72% with more than 30 million people voting, the highest number since the General Election in 1992.
Interestingly, the majority of workers in the UK including contractors, freelancers and self-employed professionals voted to REMAIN in the EU with the over 60’s population clearly having the final say on what the outcome would be. The average age of a Brookson customer falls within the 2nd tier of the table below where the majority voted to remain. The 18-24 age group, arguably the next generation of self-employed professionals, is where the biggest remain vote lay with 64% voting to stay within the EU.
So what does the BREXIT vote mean for contractors and the key sectors in which they operate?
Its felt that migration may have been the key topic of influence in how people voted. Although both sides of the campaign have been vocal about immigration, it was the “leave camp” which has laid down a strong warning about EU migration if the UK stays in. These warnings clearly weren’t lost on many of the UK’s flexible workforce, some of whom are worried about new worker arrivals driving up competition and pushing down pay rates.
The Brexit vote could now mean we have complete control over our borders and no longer be subject to EU rules but that said, we can’t ignore the fact that free movement of labour works both ways. According to IPSE (The Association of Independence Professionals & the Self Employed), “at least one in ten IPSE members regularly work abroad and many will work in Europe. Amsterdam and Frankfurt, for example, are big financial centers and attract large numbers of UK freelancers.” The decision to leave the EU could now restrict these workers rights to work in these countries unless the UK is granted special status.
Results of a pre-referendum survey carried out by Kingsbridge Contractor Insurance found that: “53% of all contractors surveyed believe that a Brexit would make it harder for them to use their skills abroad. Many cite logistical and administrative issues as their main concern, with much of the discussion centered on the increased difficulty of obtaining the right visas, paperwork, and work permits, as well as the potential clampdown on ease of movement throughout the EU.”
As most of our current employment laws emanate from the EU, there is a question mark over which laws the UK will retain in the coming months/years. For example, the Agency Workers Directive and the Working Time Directive may come under greater scrutiny post-exit.
Following the decision to exit the EU, the Autumn Statement will now become more important for the country as a potentially new Chancellor steps forward. This perhaps allows a small amount of time for the dust to settle before the policy makers (or policy changers) start to scope out next steps.
The Governor of the Bank of England Mr Carney offered some reassurance that there will be no immediate changes as a result of the vote.
He said: “There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold. It will take some time for the United Kingdom to establish new relationships with Europe and the rest of the world.”
What will be crucial for businesses within the UK is that the government manage the transition as smoothly as possible with political leaders providing as much political clarity and coordinated action as possible.
As always Brookson will keep a close eye on any changes and provide further updates as events unfold.