It was a monumental decision, and almost certainly a defining moment in Britain’s modern history. Although, there’s no doubt leaving the EU will have its pros and cons and for the time being, the future remains uncertain, therefore, let us explore how it might affect the security industry in the UK.
While the referendum asked a simple question, its outcome has posed many complex questions about the consequences of Brexit. From its manned guards to the number of suppliers of security equipment based in the UK, Brexit could affect the security industry, although its effect may not be imminent.
Whether you agree with the results of the referendum held on the last June or not, the ‘majority’ of the British population wanted to leave the European Union. Approximately 52% of the voters decided it would be best for them and their country to leave the European Union.
IMPACT ON OUR ECONOMY
Most polls by both generalist and specialist trade associations have found a vast majority of firms, large and small, were in favour of remaining in the European Union.
The Treasury’s estimate that a Brexit could cause economic damage to the value of 3.4% to 9.5% of GDP by 2030 is far from unreasonable, despite the claims of Brexiteers to the contrary.
It is clearly within the interests of the business community, and the security industry as a major part of this, that we stay within the EU. Doing so will protect our essential trade with other EU nations – countries do more business with economies that are large and close to them – as well as other economies through the EU’s trade agreements.
IMPACT ON SECURITY INDUSTRY
One of the most compelling reasons why Brexit will be an economic disaster for the UK, and a significant disadvantage to the security industry, is the impact that it will have on our service sector. This accounts for 80% of the UK economy and, according to the Barclays Trade Index, should account for half of the UK’s exports within a decade.
Organisation for Economic Co-operation and Development figures indicate that the UK is the world’s second largest net exporter of services (to the value of 361.7 million USD in 2014), and that services constituted 40% of the UK’s exports in 2015.
Most existing trade deals exclude services and the deals with the EU that do so also require free movement of people and common regulations. The UK would need to negotiate access to the European single market for its service industries, whereas EU manufacturers will automatically enjoy virtually unlimited rights to sell whatever they wanted in the UK under global World Trade Organization (WTO) arrangements, underpinned by the General Agreement on Tariffs and Trade (GATT).
One of the political aims of Brexit was to regain complete control over immigration. A consequence of this is very likely to mean it will become more difficult for people with low skills to come to the UK and work. The UK private security industry is such a low skilled sector and relies significantly upon labour from the EU. Indeed of the 371,266 licenses issued by the SIA, just under 15,000 are to those with EU passports.
Brexit could have a large impact on UK businesses, including the security industry. As part of the EU, companies in the UK can sell goods freely to customers within the EU without having to pay additional taxes to import those goods. Tariffs are also waved under the European Union’s free trade agreements. However with the vote to leave the EU and terms of the UK’s withdraw still uncertain, the fate of the leading security suppliers in both the UK and Europe fall under question.
While there is the fear that UK could lose its influence on EU legalisation, there is no denying that the working directive, equal pay, maternity rights, TUPE protections, health and safety, public procurement and the right to information and consultation have all come into play thanks to the EU, so should the EU really be who we worry about? Being a reluctant regulator of the security industry, would the Conservative party uphold such regulations or water them down?
HIGHER WAGES FOR MANNED GUARDS
Could the UK really negotiate a deal with the EU in which they wouldn’t have freedom of movement of labour? While the chance is slim, let’s say such a deal has been made for arguments sake. With the UK in complete control of immigration, it would likely be a lot harder for people to enter the UK and work. Statistics show that out of 371,266 licenses issued by the SIA, 15,000 of them are issued to individuals who hold EU passports. Thus, Brexit could mean security industry jobs would become higher in demand, leading to higher pay for those working as door supervisors, security guards, CCTV operators and others professions in the industry.
On the contrary, there is question of whether such a change would further encourage the move to technology based solutions to lower costs, leaving security industry workers in the dust.
All in all, with the security business being a private sector niche, it will be most affected by how CEOs and business leaders in their organisations respond to new employment legislation.
This article has only touched upon the manned guarding sector and there are many other parts of the industry where the implications will be different. Brexit of any kind will, therefore, have significant implications for the private security industry and depending upon future arrangements could lead to a much more regulated sector to a much less.
It really is too early to tell the full effect of Brexit. Only time will tell. However, a smaller available workforce, the devaluation of the GBP, inflation, and the rest of the factors will eventually lead to an increase of prices for the average consumers, but also to an increase of costs for security companies.
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