Oral evidence: Business views on the EU Referendum, HC 88
Oral evidence, 14 June 2016.
Witnesses
Jennifer Brown, Managing Director, pampeano, Paul Kahn, President, Airbus Group UK, Pam Watts, Financial Director, SWEEEP Kuusakoski, and Guy Schanschieff, Managing Director, Bambino Mio, gave evidence.
Chair
Good morning. Thank you for attending. I am very conscious that we have a lot to get through and we are keen to hear from you, as much as possible. Could you tell us who you are, what your business does and also whether you are in favour of leaving or remaining, starting with you, Guy?
Guy Schanschieff
My name is Guy Schanschieff. I own a company, Bambino Mio. We are based in Northamptonshire. We are the market leaders for washable nappies. We have sold in about 50 countries worldwide, both in Europe and outside Europe, and we also import our goods, working with factories in the Far East, in Europe and in the UK.
Chair
Are you in favour of Britain leaving or remaining?
Guy Schanschieff
I am in favour of leaving.
Pam Watts
I am Pam Watts. My husband and I started a company down in Kent, next to Kelly Tolhurst, which recycles waste electronics and is governed by the European WEEE directive. We currently process 80% of the WEEE collected in the South East. We recover 98% of the commodities from it. We export those commodities across the world. We need the support of our Government to do that and we feel that we are not having that, at the moment. We have Finnish partners and we have partner plants in India, China and the United States. I am in favour of definitely leaving.
Paul Kahn
I am Paul Kahn. I am President of Airbus Group in the UK. We employ 15,000 people in the UK. We have a turnover of around £6 billion. You will know us for our aircraft, where we make the wings in the UK. We are also a large defence and space company, where we have a secure communications business, and we make satellites. We are also a leading supplier of helicopters. I would like to thank the Committee for the invitation to come and give evidence today. We think it is certainly contributing to the level of the debate. Airbus Group is very much in favour of remaining in the EU.
Jennifer Brown
My name is Jennifer Brown. I am the MD of pampeano, a luxury leather goods company based in Oxford, and 27% of our sales are to Europe and I am very strongly in the Remain camp.
Chair
This is a question to you all but, Jennifer, may I start with you? How specifically—and I do stress “specifically”—does Britain’s membership of the European Union impact upon your business?
Jennifer Brown
There are three main factors: one, currency; two, people; three, goods. With regard to currency, as we import most of our goods and pay in dollars, a depressed pound makes our goods much more expensive. At the moment, we are absorbing those costs, so they are much more expensive. It is a cost to our business that we are not passing on to our customers. Obviously, if we sell to Europe, we sell in euros, so you could argue that there is a hedge, but we are finding that the weak pound means that a lot of people are choosing to pay in sterling, so we getting doubly hit by that. With regard to people, we have people on our team who are from Eastern Europe who are extremely capable and motivated people. I would be very sorry if we were have any difficulty or a barrier to employing such people. We are able to travel freely to Germany for trade shows to build our European business. Thirdly, the cost of shipping goods to Europe is as easy as shipping goods around the UK. We have no barrier to do so. If I compare it with shipping goods to Switzerland, for example, which is the best proxy for us, it costs us about 4% more in terms of the administrative burden and the additional cost of the actual shipment with the couriers.
Paul Kahn
For Airbus Group in particular, the EU provides the regulatory environment that we work within—we work to a single set of standards and a single set of regulations—and then the single market is fundamental to how we operate. We make use of the free movement of labour, of goods, of resources, of capital, of intellectual property, of ideas, so we cross borders all the time. We run a very integrated business between our four home nations of France, Germany, Spain and the UK in particular, and so that is how we live and breathe.
Pam Watts
This here is probably why I want to leave the EU. This is a piece of lead, which we recovered from waste.
Chair
It is not dangerous, is it? Is it like kryptonite? Should we be moving away?
Pam Watts
It is not, unless you want to eat it. We invested £2 million of our own money in British innovation, my husband’s innovation, in a plant that recovered this waste stream, in accordance with the WEEE directive. We had Michael Fallon open the plant. We had David Cameron down. We had everybody and their dog down. Hardly had we got going when the Netherlands decided to interpret the same rules—the same directive—to a lower standard and allowed their processes to undercut ours. In the past year, we have just written off a £2 million investment of private money. We have made nine skilled jobs redundant. To me that is Europe for you. It is an uneven playing field. On the one hand, it drowns us in regulation and, on the other hand, nobody pays any attention to the regulation except us. I beg the question: what is the point in having the regulation in the first place?
Guy Schanschieff
For us, it is all about trade. As I said earlier, we trade in the UK, throughout Europe and worldwide. We have seen in the last few years our trade grow very well in the UK and very well outside the EU but stagnate and go backwards with a lot of European countries that we deal with. We see the real opportunities outside the EU for our business, and the opportunity to do trade deals that are relevant to the UK would be of significant benefit, in terms of us growing our business.
Kelly Tolhurst
Thank you so much for coming. It is really good to have a mixture of businesses at the Select Committee, so I am really interested to hear what you have to say. If you heard the last panel, regulation has been an interesting topic throughout the debate for me. I would like to ask maybe for a bit of elaboration on how you see EU regulation has particularly impacted your business but really just get your views on how you see it moving forward. What is the best situation? Are there particular examples of where EU regulation has made British firms particularly uncompetitive, or are there examples of where it has being beneficial? I am sure there are some examples. It is to all of you.
Paul Kahn
Perhaps I can start. The most significant part of EU regulation is that it creates a single regulatory environment. It is stating the obvious perhaps that, when an aircraft takes off from the UK, it has to land somewhere else. When you are in Europe, it is landing somewhere where that aircraft also has to be regulated. We have gone from potentially 28 sets of different standards and regulations to one single set of standards and regulations. If we take the aerospace industry globally that means we operate against two sets of global standards, one of which is US and one of which is European. We would very much like to see one set of global standards, and in that sort of situation the EU negotiates for us. To leave the EU, where you introduce a British set of standards, makes life more complicated and is going very much in the wrong direction. Going towards one set of standards is very important. In that context, it is important that we participate in that. We have genuine influence on what is going on inside the EU, and I would disagree with John Longworth in the comments that he made earlier, because the British Government and the British civil service are effective. It does touch the sides of the EU. We do make a difference and we are highly regarded by other member states within the EU for our voice within the regulatory environment, in particular within aerospace.
Kelly Tolhurst
On that particular point, you are obviously representing Airbus and a significant size of business. Do you think that there is maybe a disproportional voice in regard to large businesses impacting on EU regulation, versus a small organisation, such as mine before I became a Member of Parliament, which was not even a fraction of the size of Airbus?
Paul Kahn
I do not think there is such a big divide between large businesses and small businesses as people are making out. If I take the survey of ADS, the UK trade body for Aerospace, Defence, Security and Space, about 70% of the membership want to remain in. That does not vary that much. There are just a few percentage points’ difference between large businesses and small businesses. Some 82% of the ADS members export to Europe, so the SME community in aerospace and defence is engaged with Europe and does not suffer disproportionately, compared with everything else. Within that, Airbus and other large companies run integrated supply chains. Small businesses are accessing that integrated supply chain, which goes right across the EU.
Pam Watts
Can I answer that, because I completely disagree with you there? You are saying that we have influence, but we have no influence whatsoever. Particularly with this case, were we a democratic country and in charge of the people who are meant to represent us, we could have taken this case up via our MP, Gordon Henderson, to the Environment Agency, which governs us, and would have been able to make them understand that somebody up the road was breaking the regulations. We would have had a place at the table. Instead, we did that; we got to the Environment Agency, which agreed that their hands were tied under free trade and there was nothing they could do to stop the poorer processing in the Netherlands. If we wanted to take it up, we would have to go to the European Commission. We duly did that. We went to our MEP, who told us that it was a complete waste of time talking to him, because he did not really have any influence anywhere and that the way to go about it is to employ a lobbyist. That is fine for Mr Airbus, but not so fine for us. They wanted £12,000 just for a meeting, and a monthly retainer, to have that much voice. What was the point? We just came home, put a dustsheet over the £2 million, and called it quits. Instead, we are taking that same investment, that same British innovation and those same British engineers out to the States, where we know the rules we are playing with.
Chris White
Just to Pam and Jennifer, and I will come back to the question for Jennifer, first of all I would like to say how sorry I am to hear your story. I am sure the Committee has great sympathy, not least in terms of the investment and the fact that you had to meet all these people and everybody celebrated your innovation. You are clearly not impressed with Europe. If Britain were to leave Europe, how would that change your business?
Pam Watts
I want to see engagement with the globe. We are trading across the globe. I totally agree with you: we do not have a single trading agreement with any large economy outside the EU—not one. It is a disgrace that the EU has not managed that in its 40‑year history. That is holding back companies like mine. I am sending stuff to China, Taiwan and Japan every week, and we have no trade agreements with them. How can that be in a global economy? I have a feeling that the Remain campaign, honestly in their heads, thinks that the world stops at the Med. They have no idea of the potential we are missing and it is an indictment to how we are treating our young people. I happen to really believe in our young people. Our education system is one of the best in the world. Our universities lead the world and our young people should be out there engaging with the world, not with this dying bloc down the road with 50% unemployment. What use is that to our young people? We need to be out there, and companies like mine need your support. We can only get that support if we take back control and the dog starts wagging the tail. At the minute, there is no point in talking to you, because you have no influence. I need you to respond to what we need, not some bureaucrat in Brussels telling me what I must do.
Chris White
Thank you for that answer. Can I ask you, Jennifer, what you think it will look like for your business if we were to leave?
Jennifer Brown
I am very concerned, because we are going to have a higher administrative cost. Do we pass that on to our trade buyers in Europe, or do we absorb it, hitting our bottom line directly? Or we can increase the costs for our buyers and therefore become less competitive, again hitting our bottom line. I am convinced that the net effect is going to be negative.
Jonathan Reynolds
I am sure you are aware that there is a passionate, heated debate going on about immigration in particular and freedom of movement. I would be very interested to know if any of you employ EU nationals. If so, has that been to fill particular skills gaps? How might it affect you if employing those EU nationals was done in essentially the same way as we currently have in regulations for non‑EU nationals? Jennifer, seeing as you mentioned some of that in your introduction, can I start with you?
Jennifer Brown
We have one. We are a very small business; there are just nine of us so, as a percentage, yes, it is a big percentage. She is phenomenally good and I would be very sorry if there was any question mark hanging over her. I also have various friends with their own small businesses and have spoken to all of those that have a goods business. One in particular has a food company that produces its goods in Hull. All were unanimous in their fear of leaving the EU. For this particular business in Hull, his view was that he has to have low‑skilled factory workers to do a lot of the processing work. He said, “I just cannot get the employees that I need without using European workers.”
Paul Kahn
For Airbus, about 3% of our British workforce are EU nationals from the continent and a similar number of British nationals work in the rest of Airbus Group on the continent. It would have a profound impact, and structurally so. Let us take apprentices, and we are a large employer of apprentices. One of the things we like to do is to give them a little bit of inter‑cultural experience. To be effective within the Airbus Group, you need to be able to work well as a part of cross‑cultural and multinational teams. Going and spending a week or two as an apprentice abroad is an opportunity for our apprentices. For our graduates, sometimes we like slightly longer placements. They just get on a plane, off they go and they come back. There are no visas required or anything like that. As soon as you start introducing paperwork, bureaucracy and control into that, it will have an impact. It will have a cost at the very least, but it means it is much less likely to happen. As soon as you start to lose that experience, it means you are less able to progress in your career. We have a former apprentice from Glasgow who is the chief operating officer of Airbus globally today, so he has benefited from that sort of experience. To get that job, which he has won on his own merit, not because he is British or German or French but because he is really good at the job, he has to have that experience. To take my own experience, before this job, I was running a large business in Canada, which was also part of a multinational. There, one of the MDs from the UK rang up and said, “Please can I send a graduate across for a six‑month placement?” Of course the answer was yes from a business perspective, because that was an international experience that she was looking for, but the Canadian authorities said, “Yes, of course she can have a visa, but next year,” because the quota for training visas had run out. It will impact on the day-to-day life of young people and the future of our business. They will not have that international experience and they are less likely to be leading the business in the future, as a result.
Guy Schanschieff
It is quite interesting from our business’s point of view because, a few years ago, we worked very hard to bring a lot of business and manufacturing back from China into Europe to embrace the EU. We worked with a factory in Lithuania, which we have worked with for a number of years. We are experiencing a lot of growth at the moment, but what is quite interesting is that the factory is unable to respond, because the people who would have been there sewing our products have come to Western Europe for lower paid products. It is still very difficult, if not impossible, for us to find the sorts of factories to manufacture our products in the UK, but our biggest challenge is within Europe. In the Eastern European countries, the skilled labour just is not there for them, because the free movement of labour has brought those skilled workers into Western Europe.
Jonathan Reynolds
That is quite an interesting perspective, Guy. You are saying that the principal impact on you of freedom of movement is that, in other countries where you want the skills, they are not available because they have moved to other European countries.
Guy Schanschieff
It is not up to me. I am not here to interpret what that means in terms of the whole of Europe and how that operates, but logic would suggest that it must provide challenges for the economies in those countries if they are to be building those up.
Jonathan Reynolds
Do you yourself employ EU nationals? Is there any employment aspect in the UK that affects you?
Guy Schanschieff
No, we do not employ any EU nationals at the moment, but we have done and we will do in the future.
Amanda Milling
Good morning. I discussed exports in the previous session and you are all exporting. The Government have targets to meet in terms of increased exports, both in terms of value and volume. I would just be interested to understand, from each of your perspectives and your businesses, what impact leaving the EU would have on your ability to increase your levels of exports and why this is.
Guy Schanschieff
If I just give one example, I talked in the opening statement about opportunities outside the EU. We know that there are big opportunities in South America for our product, but the deals that exist or do not exist at the moment mean that there is around 80% duty on our products, which makes us non‑competitive. A trade deal with South America, along with many other countries outside the EU, would be a fantastic opportunity. As far as Europe is concerned, where our business is stagnating, it depends on the rhetoric that is going on now among European Governments and how they respond should the UK decide to leave Europe. One would hope, looking at the trade figures, looking at the trade that Europe needs and what the UK needs, and the fact that the infrastructure is in place, that forming a way of trading with Europe post any Brexit would be a lot easier than is being put to us at the moment by those who want to remain.
Amanda Milling
Just so that I am clear, from your perspective any risks are outweighed by the potential opportunities globally.
Guy Schanschieff
That is correct.
Pam Watts
For me, there are not really any risks from leaving the EU. If you want to improve exports and reach your targets, knock down the Hadrian’s Wall that is the protective inward‑looking European Union and let us step out into the bigger world. You step out with us and support us by getting those trade deals and we will deliver for you, but we cannot do that unless we can collaborate directly with you, rather than having to collaborate with an anonymous EU, and without those trade deals. Either we are maxing out as it is without the trade deals, which begs the question of why then we are paying £10 billion a year for membership of a trade deal in Europe, or the trade deal in Europe is amazing. In which case, what are we missing out by not having trade deals abroad? I am also in the environmental sector. We seriously need to start thinking not as little Europeans. David Cameron is convinced that it is better for the environment to stay in Europe. I have given you a very good example of how that is not working. A lot of waste is passing out of this country to be processed to a much lower standard in Europe. If we had control back, you could limit that; you could stop that from happening. I also do not get the argument that, to better the environment, we need to do it through Europe; the Remain campaign says that climate does not stop at the shores of Britain. It does not stop at the shores of the Mediterranean either. We need to be part of global panels environmentally. Our industry is very technology‑driven, and it is absolutely essential for us to be sitting at the table and collaborating with the techies in Silicon Valley, the engineers in India and the manufacturing bases in China. We need to work globally. Environmental issues do not work in a small way; they are global issues and you have to be sitting at the global table. Doing it as a subordinate to the EU just does not work for me at all—certainly not for my industry.
Amanda Milling
We could go down that avenue, because I would like to ask some questions, but I am conscious of time.
Paul Kahn
Exports are fundamental to our business. We export all of our wings from the UK. Leaving the EU will put at risk future investment, and I say that very seriously, because we have to be globally competitive. That is what Pam is talking about. She is suffering from global competition and Airbus is benefiting from global competition. We have taken that fight to Boeing in particular.
Pam Watts
Paul, can I just say that I did not say I was suffering from global competition? I am suffering from EU regulation.
Paul Kahn
Okay, that was my observation that you are suffering from global competition.
Pam Watts
You have got it wrong.
Paul Kahn
By working together within Europe, we have gone from 18% worldwide market share, when we were individual companies before we came together, to about 50% worldwide market share, by making globally competitive products that people want. That is how you succeed in exports. The EU and EU regulation have helped us to do that, because we have one set of standards in France, in Germany, in the UK and in Spain. That is vital for doing our business effectively.
Amanda Milling
Those are the benefits of the EU. If on the 23rd the public votes to leave the EU, what will the impact be on your exporting position?
Paul Kahn
It puts future investment at risk. We announced investment of about £100 million at the end of 2014, which is going into fundamentally improving the productivity of our business in the UK. We have to compete for that investment globally. That investment could have gone elsewhere, in particular to China or to Germany, but it came to the UK because the UK was the most attractive place to do that. There is a whole set of reasons for that, including skills and the workforce, including existing investment, but in particular that whole tariff‑free integrated industrial operation that we run across our four home nations. You put that future investment at risk, and then that could go elsewhere. It will not happen overnight, but it is a risk for the future.
Chris White
First of all, back to one of Amanda’s questions, you have spelt out quite clearly about investment, but can you spell out further how, by not being part of the EU, you could potentially lose that investment?
Paul Kahn
The reality is that we do not know what being out of the EU will look like. That is the big unknown. There are different models that are being suggested, from a Norwegian model, a Swiss model, a Canadian model or just WTO, but without being able to explain what out looks like, you are increasing uncertainty and we cannot take a clear position on that. We really do not know what out will look like and, therefore, we cannot say exactly what is going to happen. I can say very clearly that the risk of that investment not coming here goes up. It is my job, and I certainly look to the Committee and to the UK Government, to help us make the UK operations the most attractive possible to attract that inward investment, to attract that global capital, which is mobile and can go anywhere, in the EU or outside the EU. The EU helps to make UK operations a more attractive place to invest and, therefore, to make us more competitive.
Chris White
You are a very important organisation. How would you feel if we were to leave the EU? What planning are you putting in place for that eventuality?
Paul Kahn
We have the same plans for in or out, which are fundamentally about improving our productivity and making the UK operations as competitive and as productive as possible. In that sense, because we do not know what out will look like, we do not have any specific contingency plans for out. We will deal with that situation if that is what the British electorate chooses.
Chris White
I assume you have done various projections, modelling and forecasts. You have suggested that you could lose investment. What would that mean to your workforce?
Paul Kahn
The risk is future investment. For our current workforce, the short‑term impact would be very minimal. Without knowing what out looks like, it is very difficult to make a model, so any contingency planning would be based on whatever assumptions we made, which are very difficult to forecast. In particular, it means that the impact is greater on our workforces and communities that we support, on their children and their children’s children, because it is a long‑term impact. It will have a significant impact on our future competitiveness and productivity.
Chris White
Thank you for that. Jennifer, in your opening remarks you talked about employing immigrants. If it were the case that we did not have free movement of people, what impact would that have on your business? Can I ask a more difficult question, perhaps? Why do you employ immigrants?
Jennifer Brown
There is a lot going on in there. The free movement of people is really significant, not only in being able to employ someone from Eastern Europe. I employed her because she was the best candidate for the job. She was very capable, very motivated and she came with excellent references. It was nothing to do with where she came from, and for the people who did not get the job, it was nothing to do with where they came from. It was down to her abilities that she got the job. With regard to the free movement of us as a group to travel, particularly into Germany for trade fairs, there is a really key point that ties into your question as well, which I did not quite get the chance to answer. Since 2012, we have seen double‑digit growth in our top line and our bottom line. This is, in large part, as a consequence of our exports. In 2012, we did not export to Europe at all and now it is 27% of all of our sales. In fact, 30% of all our revenue is coming from selling overseas, so the extra 7% is from rest‑of‑world sales. The only way we have achieved that is by travelling as a team, in part or in whole, to Europe to be able to participate in European trade fairs. If we exhibit in London or Birmingham, our main centres for trade fairs in the UK, we do not get the international buyer base that we get if we travel to Europe. The Government have supported small businesses like mine to be able to attend these European fairs to quite a significant financial level. They have given us money to be able to go; they have given us a dedicated UKTI representative to facilitate any paperwork and the logistics, as a small business, of how I export in Germany. That sounds a bit daunting but the process has become very easy as a consequence of the support we have received from the Government. As a result, 30% of our business is now from overseas and we have tripled our workforce as a consequence of that as well.
Chair
Can I just say thank you on behalf of the Committee? That has been really helpful and really informative. We are very grateful for your time. Thank you. Examination of Witnesses
Witnesses
Stephen Kon, Senior Partner, King & Wood Mallesons, Alex Depledge, former CEO and founder of Hassle.com, Julie Price, Insurance Broker, Julie Price & Co Ltd, and Phil Eckersley, Managing Director, Bridgewater Home Care, gave evidence.
Chair
Thank you very much for attending. Again, we are very grateful for your time. As I did with the panel that was talking to us about goods, I would like you to introduce yourselves, tell us which company or organisation you are representing and whether you are in favour of Britain leaving the EU or remaining, starting with you, Alex.
Alex Depledge
Hi, my name is Alex Depledge. I am the former CEO and founder of Hassle.com. Hassle.com is an online, digital business that provided cleaners for people across the UK, Ireland, Germany and France. We started in 2012 and really got running in 2013. Eventually, I sold the business on 1 July 2015 for quite a considerable amount, more than I ever thought anyway, and now I am the Chair of Coadec, which is the Coalition for the Digital Economy. I am obviously in.
Chair
Thanks for coming back and can I say, on behalf of the Committee, congratulations on being awarded the MBE in the Birthday Honours List? It is very well deserved.
Alex Depledge
Thank you. It was a big shock, but a lovely surprise.
Phil Eckersley
My name is Phil Eckersley. I am the Founder and Director of Bridgewater Home Care. We provide care services to people in their own homes, domiciliary care. Our specialism is dementia care, but we support all adults with vulnerabilities in conditions that may hamper their day-to-day activities. I am on the leave side.
Julie Price
I am Julie Price, Julie Price and Co Ltd. I have been employed for nine years, then self‑employed for 27 years. I am in a unique position, not only regarding my own business, which has five staff, who have been fairly constant over 20 years, but in that I also insure many small businesses, from one person to 20 to 30 people, and have done over that period. I have seen some come and go, and fail, so I have quite a wide background there.
Chair
Are you in favour of leaving or remaining?
Julie Price
I am in favour of leaving.
Stephen Kon
My name is Stephen Kon. I am a Senior Partner at King & Wood Mallesons. It is a global law firm. I am the Senior Partner on Europe and the Deputy Chair of the firm globally. I am also on the steering committee of Lawyers – In for Britain, so I am in. By background, I am an EU competition lawyer.
Chair
Stephen, may I begin with you? It is the question I asked the previous panel. How specifically—and, again, I do want to stress “specifically”—does Britain’s membership of the EU impact upon your business?
Stephen Kon
It is pretty significant. About 40% of our people in Europe are EU or EEA nationals. About the same percentage of our business is generated from the EU and, generally, we are a firm that has offices in most principal commercial jurisdictions in other EU member states, and the single market has a very important role to play in the operation of those businesses.
Julie Price
I will have to answer more generally. As it is a small office, I deal only with health and safety and perhaps employment law, but I do have a unique position. I insure lots of very similar small businesses and it impacts them to a greater extent, if they are exporting, importing and what have you. It does have an impact, possibly more on the regulation side.
Chair
What does that mean when you say “regulation”? Are you concerned that EU regulation is dragging you down and, if so, what regulation?
Julie Price
Any regulations start to crush or lessen business growth, and that is a fact. For a one‑man band, it is very basic when you are on your own and you are trying to make your business grow, trying to pay your rates and income tax. Then you incorporate, so you have corporation tax and various other things. Regulation tends to cost you money, because it is very complex, such as employment law, which has become highly regulated and very complex. It keeps changing. Health and safety is the same. We are ending up with more and more consultants, if you like, which goes across the board for all types of businesses. It has dampened down what we can do. It does. It also reflects on how you run a business, day to day, because there are various other things pulling you in different directions when you are in business. What you think is just one little aspect ends up being another little nail in the coffin of “Shall I sell?”, because we all have offers at various times, or “Shall I finish and shall I start another business? Am I in the wrong business?” You start thinking, “I am in the wrong business here.” There are all these pressures.
Chair
I am sorry to interrupt. I am trying to get a sense of the regulatory burden. I understand regulation can very often be a burden on business. To what extent does that regulation derive from Europe or derive from this place?
Julie Price
The problem with regulation is you are not quite sure now which part is UK and which part is Europe. It is getting all foggy and misty. I am now told that the increase in paternity leave is purely UK. All the extras that are given out without consultation to employment again impact the little businesses. There are 5.4 million of us. We are employing 15 million people, which is about 60% of the private sector, but we just get on with it as much as we can. Behind the scenes, you are changing the whole area, because 75% of businesses are not employing anybody now. Yes, there is an impact. All the extra regulations are crushing us.
Chair
Thank you. Phil?
Phil Eckersley
Is this in regard to regulations?
Chair
It is not specifically about regulation, but in terms of what impact Europe has on your business.
Phil Eckersley
Europe does not really have any impact on my business, but the European Union does. The concern for me is things like the working time directive and the EU procurement rules that we have to work by. For the procurement rules and the larger tenders, usually just the big companies can meet those demands under that regulatory framework. We are a small business; we do not have a head office, where we have tendering teams or anything like that, so we find that the larger providers and plcs are able to tender much more easily and much quicker, which gives them the advantage and, I would say, stifles the innovation and creativity that small and medium companies can offer in tendering for large contracts. My concern on the regulatory side is the kind of one‑size‑fits‑all approach of the European Union’s regulations and directives. The European Union can create some legislation or regulation because of some issue that happened in Italy or what have you, which impacts the UK. It is not responsive to local market conditions and pressures.
Chair
Do you have direct experience of that? Has that impacted on your business now?
Phil Eckersley
I believe that being a part of the European Union is uncertainty. I do not believe that leaving the European Union, for me, is going to create any uncertainty. The uncertainty, concern and worries, for me, are the future impact of EU regulation on the service industries and on my industry as well. That for me is completely uncertain, because the vote to remain is not a vote for the status quo, and some people may confuse that and not really understand that that is a part of the deal when people are voting to remain. For me, a vote to leave is more certainty. It will allow small businesses like mine to be more responsive to local demands and allow you in Westminster to also be more responsive. We have the baby boomers coming up; we are going to have more older people and we need to be responsive to those conditions and those market conditions, whereas EU regulations in other countries in the EU will not have the same pressures and the same issues. We need it to be more local. Having legislation come from Westminster, we will be a lot more responsive to those challenges in the future.
Alex Depledge
If you would indulge me, I would like to give you three reasons why, if we were not part of the EU, my business would never have existed. We formed in 2012 and we pivoted our business model in 2013. In 2013, we were five employees and, by the time I sold, we were 70 employees across four countries. In two and a half years, we had managed to achieve something like 400% year‑on‑year growth. There are three reasons that we would not have been able to do that without the EU. The first is market. The UK domestic market for high‑growth digital businesses is just not big enough, if we want to compete on a global stage. We need access to the 500 million consumers who exist throughout the European Union. I was able to take advantage of that relatively easily. It was not completely pain‑free, but I have great hopes that the DSM or digital single market initiative that is currently being looked at by the Commission should hopefully help alleviate some of those problems even further. The second reason that I strongly believe that I would not be here if we were not inside the EU is capital. London forms a bridge between the US and Europe for the inflow of venture capital. Some of the best and most high‑profile VC investors, Accel Partners, invested $6 million into my business. They were the early backers of Facebook and they chose to headquarter their practices in the EU. The same goes for Index, which is also a Silicon Valley company. I can rattle off about 30 other venture houses. Those guys are really worried that, if we come out of the EU, they are going to have to move. For efficiency’s sake and access to the greatest possible market, you are looking at Berlin as a rival centre for them to move their companies to. We will bypass that flow of American capital completely. The third thing is talent. This for me is the most important thing. We are facing a skills crisis—not a gap, a crisis—in the UK, where we do not produce the right level of talent for the changing, dynamic economy in which we live. Let me give you a really simple example. I have an engineering team of 10 people. It took me, on average, six months to fill a role. We were only going two and a half years, so you can imagine that six months in the lifespan of the business was an incredibly long time. Of those 10 people, we had one Italian, two Greeks, one from the Canary Islands, one from Poland, one from Ireland, three from the UK and one from Israel. In the end, the guy from Israel we had to let go, because it took me six months trying to get the right visa for him and a lot of money. In the end, I just gave up. This is just to make the point that only 50% of immigration into this country comes from the EU; the rest of it comes from outside the EU. The fact that we can close our borders is a huge myth. If we believe that and we go ahead and do that, all we will do is kneecap the economy and move the centre of digital creation and innovation from London to Frankfurt, Berlin or Paris, because they are ready and they are waiting with open arms.
Chair
On the question of talent, I think Johnny will want to come in.
Jonathan Reynolds
Yes, that was a point I was seeking. I am effectively going to ask you the same question I asked the previous panel, which is about how freedom of movement affects you. Do any of you employ EU nationals and, if so, have they been around particular skills shortages? How would it affect you if there was a greater regulatory process to do that? I should warn you that I have to leave immediately after you answer, but please be assured I am not storming out. I have a meeting at half 11. Alex, could you maybe say a little more about that? Then we will go through the rest of the panel.
Alex Depledge
My business offered work for both UK and EU nationals on the platform, in the form of cleaning. Also, I think I worked out that we employed something like 60% EU nationals and 40% UK. Like the lady on the previous panel, we hire whoever is the best person. Unfortunately, although I know that we have put coding on the curriculum and that is a great stride forward, coding is only half the answer. That will also take generations to come. What is really lacking from our educational institutions right now is digital literacy, so it is not just about development in engineering. It is about product management. It is about performance marketing. It is about data analytics. For all of those three titles, I have just given you, if I asked a 16-year‑old on the street if they are interested in those jobs, they would have no idea what they are. Some 50% of my engineering team was self‑taught. That means they went and got a book, sat in their bedroom and taught themselves how to do it. Our institutions are not keeping up with the changing environment, and it is not just us; it is the world over. The US has this exact same problem. We are in a global race for talent here, not in a European or even a domestic one.
Phil Eckersley
I would just like to make an important point. I believe that we do have a skills shortage in the UK. It is an important point to make that we have gross immigration to the country of 600,000 a year, let us say, and 300,000 leave. My big concern is that a lot of my friends who are doctors have left. I see an influx of low‑skilled or unskilled people coming to the country and a real brain drain of people who have skills that we need—engineers, doctors, medical professionals.
Jonathan Reynolds
Is that the case for your business, Phil?
Phil Eckersley
It just adds to the pressure. Importantly, social care is the vital bridge between somebody who is beginning their journey through care to the NHS. Social care and the NHS are intrinsic. This is why there is a lot going on about emerging budgets and working closely together. It is something that needs to happen at a local scale, but we are losing people in the NHS, which is putting pressure on the NHS, which is then putting pressure on social care. Even in the area in which I operate, at least three social care providers have closed down, because the budget is not there. Can we blame the EU for that? Maybe, because we give such a high net contribution, but there may be local pressures as well. But that is having an impact on social care. Social care companies are closing down, which means that there is bed-blocking happening at an even greater scale in NHS hospitals and people cannot be discharged, because there are no carers there to look after them. I am in favour of immigration. I really do not believe that the Leave campaign is about closing the borders. It is nothing to do with that. It is about controlling the quality of the people who we get into the country. One issue that we have, which we have had to combat and has cost us money, is the recruitment process. We will have people coming from Commonwealth countries who have English as their first language. They are great; we train them up and they are able to complete care plans. They are literate and they can communicate with the clients who they deal with on a day-to-day basis, on a personal level. Often that communication can be idiomatic, with local words and things like that, but those are from the Commonwealth countries. With EU migrants, we have had difficulty where, for example, we will receive an application form from an EU migrant. It will look fine; it will look great. We will interview them verbally and take them through the training process, only for us to find that they have no literacy skills in English. An example in point is an individual we had who was just copying what an English speaker had previously written. It took us some time to find out that was happening and we have put things in place to stop that from happening in the future. People have to come in and fill in the application form themselves, because we were finding that they were taking them home to get somebody else to do them. That is a real big concern for us and it costs us money in the recruitment process. Immigration is not the issue here; it is the level and quality of immigration that are so important to us.
Chair
May I just interrupt very briefly on this, Johnny? What proportion of your workforce is paid the national living wage?
Phil Eckersley
All of them are.
Chair
Is it at a premium to the national living wage, or is it at living wage level?
Phil Eckersley
We pay all our care staff £7.20 an hour, but, on top of that, they have their national insurance and their holiday pay. They get paid mileage and they get paid their time travelling as well.
Chair
What proportion of your workforce is British‑born or from the EU?
Phil Eckersley
Because of the demographics of the areas where we provide services, it is quite low. We do employ EU migrants, probably around 5% or something like that. It is not a huge amount, but enough for us to notice. Do not get me wrong: when we get good ones, they are great. But it is just like in any line of business. You employ somebody; they can be a British citizen or an English person who could be absolutely rubbish or they could be great. You have that anywhere you go, but the issue is the language, the cultural barriers and the understanding of the client themselves. Often EU migrants are very transient and very short term. It is very difficult for us to progress the continuity of care for our clients when people come and work for six months, we train them up, invest all that time and then they leave, go to a different part of the UK or go home. That represents a challenge to us and it does add cost to our service delivery.
Jonathan Reynolds
It is a very good example. I will just persevere for one more question, if I may. The key issue we need to try to get into as the BIS Select Committee, trying to get the business voice, is we obviously cannot make that process for Commonwealth citizens easier. We cannot have freedom of movement with a Commonwealth country, so how does adding to your regulatory burden when you might employ someone from the European Union affect you? Surely, the very valid challenges you have just set out will be there whether there is freedom of movement or not for those people applying to work for you.
Phil Eckersley
Again, when you say freedom of movement, it is quality control. In 2014, we had the issue with Dr Daniel Ubani who, it was found, did not have a grasp of the English language. Since 2014, the NHS has been able to vet for English language. They have that option. As far as I understand, almost half of applicants into the NHS from the EU have been denied, because they do not have English language capabilities. That just speaks volumes to me about the quality aspect of people coming in to work in our country, particularly in the NHS and social care sector, because it is so important to have excellent communication skills. You are dealing with people’s lives. If one of our clients is saying to somebody that they have a sore throat or whatever else, and they use a term that is not familiar to an EU migrant, something important could be lost there and it could be the difference between ending up in hospital or just simply us getting in touch with the doctor in the pharmacy and giving them some basic medication. That is my concern; the welfare of our older people is my main concern.
Chair
With the greatest of respect, Phil, that is down to your recruitment procedures and the rigour of them, rather than anything that Europe is somehow imposing.
Phil Eckersley
This is the thing. This is the difference: we have one rule for EU citizens and another rule for people across the rest of the world. In my understanding, people who come in from outside the EU have to go through certain citizenship tests. They have to have a basic English language proficiency. We do not have those same tests in the EU, so all that burden is held by small businesses like mine. I have to do all the kind of vetting procedure, making sure that they can speak English, making sure that they understand the issues of the local population. That burden is being put on small businesses. We have so many burdens at the moment anyway, where the social care fund is being cut. We are being told that we have to meet the national living wage and that the future living wage is going to be £9 in 2020, for example, but there is no scope for us to increase our hourly rate. How can that work when we have an extra burden on top of us? It is just putting a lot of pressure on businesses, not just mine but across the sector.
Jonathan Reynolds
What we are broadly concerned about is that you can stipulate English language capability on a job application. To just complete the panel, Julie and Stephen as well, is this relevant to you at all?
Julie Price
It is probably not so much immigration. I have some clients that have successfully used people in boot and shoe, which is quite strong in the Leicestershire area. They have lost a lot of local skills, but they have found that Polish people have come in and they are very good at it. My IT man is Polish. My dentist is Romanian and very successful. The point is that certain skills are ideal, but it seems to be en masse, and we are left to pick. There is no help and it costs money to interview, certainly in personal time. I must stipulate that I am talking with my small business and FSB hat on here, as a lot of us are very small here. We are one person, three people or five people. Suddenly, you are interviewing. You have to take time out of your business, so your figures drop. It is probably not quite what you think at all. I do not know if you have ever sat in a small business or started a very small business, but it is very basic. To do all these jobs is an extra burden. The long‑term trend I am seeing in 27 years is that small businesses are saying, “I am not employing anybody.” There should be warning signs, because the PAYE levels must be dropping—and I know that, because I have to collect the PAYE numbers for employers’ liability insurance. There are probably one in five who will give me a PAYE number now. I know that there are people about, because I have to do the liability. There is a long‑term problem building here and it is to do with regulation. You will say it is not EU and it is not that, but we have to bring it down locally and we have to be flexible. The danger is that we will have unemployment like in France, as you probably saw on the TV a month ago. There have been riots in France to do with trying to deregulate some of their employment law. There is 10% youth unemployment. You get civil unrest. That is where it comes from.
Jonathan Reynolds
Julie, these are all national issues. France has a labour market completely different from ours.
Julie Price
Again, we are not employing because there are too many burdens. We are saying, “Oh, this is all right. It is all right for plcs that have shareholders’ money and all that, the big companies and the civil service.” We are talking about very small, basic businesses, but we are a large proportion. We do earn money. We are the seedlings; we grow from nothing. I have clients who have had tremendous growth. I would prefer it to be long term. I know that this lady has had a very successful business and she will probably have another one as well. My clients are very long term. They are dealing globally. They are dealing where they can. A large proportion of them are not dealing with Europe, and I know that because I do marine insurance. When I look at my figures, it is less than 20%. They are dealing with America, Brazil, South Africa and all over.
Stephen Kon
As far as we are concerned and the legal profession generally is concerned, contrary to what was suggested in an earlier session, the freedom to provide services is obviously a fundamental freedom in the EU. We have our lawyers, both partners and of course associates and trainees, going to Europe to provide their services on a very regular and consistent basis. To give you one example of the counterfactual, we tried to get a visa for one of our trainees to go to Australia, because we have a big Australian practice. We were told it would take six months to get that trainee a visa, by which time her training contract would have expired. Those are the sorts of barriers that we are going to encounter if we leave the EU, and we will not benefit from the freedom to provide our services, as well of course as the difficulties for our clients. They would expect us to be able to advise on EU law matters across the EU, and we would no longer be qualified to do so in certain key areas.
Peter Kyle
I just have some areas of follow‑up. Julie, you have mentioned youth unemployment in the continent three times now. Is the EU directly responsible for creating youth unemployment?
Julie Price
I am not the expert; you probably are there. All I can say is that if you have people who are sitting there, regulating all the time, not consulting properly—
Peter Kyle
So, in your opinion, yes.
Julie Price
Yes, I do not think we get consulted.
Peter Kyle
Do you know what the EU average for youth unemployment is?
Phil Eckersley
It is higher than the UK.
Julie Price
Sorry, say that again.
Peter Kyle
Sorry, this is to Julie. Do you know what the EU average is?
Julie Price
I understood it was about 10% for youth.
Peter Kyle
It is 20% for the continent of Europe. For two out of the last five years, it is has been 20% in America as well. Does the EU cause youth unemployment in America?
Julie Price
No, America has its own problems.
Peter Kyle
The same goes for Australia, too.
Julie Price
I am saying we are better than this. You seem to think we are all the same, and we are not the same. I deal with people and I think we are very entrepreneurial.
Peter Kyle
You are making the contention that the EU is causing social harm, including youth unemployment. In the Czech Republic, for example, youth unemployment is about 2%. In Germany, it is about 5%. Across most Scandinavian countries, it is less than 6% or 7%. Is that because of the EU?
Julie Price
I do not know. I know that people are full of statistics. If you went to some businesses and talked to them, they want out of the EU.
Peter Kyle
My point is that, if the EU is responsible for creating negative things, such as high youth unemployment in Spain, Italy and Greece, is it not also responsible for creating low unemployment in the Czech Republic, Germany, Scandinavia and Britain?
Julie Price
I really think it will sit there. It will not stay as it is. It will keep legislating. It will keep regulating.
Peter Kyle
You are not going to answer the question. That is fine, but do not answer a different question.
Julie Price
That is right, because it seems to be a loaded question. I am telling you that we are best out. Britain is better than that. The problem is I deal with it all the time with small businesses. All they tell me is that regulation reduces what they do.
Peter Kyle
Just to follow up on another point about employment law, we have been doing an inquiry into Sports Direct. It is very clear that, if you are an employee of Sports Direct, you are given insecurity. There is harassment in the workplace. Staff are feeling bullied. The contracts that some staff are on have led to huge insecurity in their lives, which has had terrible consequences, both in the workplace and in individuals’ lives. You are saying that there is too much employment regulation. Where is the employment regulation for those people who needed it?
Julie Price
That would be typical. What did I say about there being a difference between small businesses and plcs? They have sections for HR. They have people who will be advising them all the time: “Do this. Do that.” We are working alongside our employees. There is not the bullying that you see there. There is a bit more basic.
Peter Kyle
There is no bullying in the small business sector. There is no bullying, harassment, exploitation or asking you to work too long.
Julie Price
You really are pushing a point; the majority of employers in small businesses work very well with their employees and they value them. There is no doubt about it, because you do. When you get to plc, you lose control and that is what he admitted, didn’t he? I did see that bit. He is over there and he does not see the day-to-day. That is the problem with big business. There is a massive difference. You obviously have not run a small business.
Peter Kyle
You obviously have not checked my CV, because I have. I set up my own small business. I set it up in my lounge and it is now employing 12 people and doing fantastically well. I set two charities up as well, but this is not about me. I am asking the questions here; this is how this format works. I am just going to move on. Phil, your sector employs 191,000 EU nationals and there is a shortfall of employees in your sector. There will be an additional need by the end of this Parliament, because of the ageing population, for an additional 200,000 people to work in your sector. Where are they going to come from?
Phil Eckersley
Absolutely. As I said before, I am a believer in immigration, but we need to manage the quality. I do want to come back on youth unemployment.
Peter Kyle
Please do not. Answer the question I asked.
Phil Eckersley
It is just the quality element. We do need immigration and it does not matter where it is from. We just need highly skilled people. We have Filipino migrants who work in the NHS and they are fantastic. They have excellent qualifications and they work well, but that is recognised by the NHS. We need some kind of process where we can control the quality of people we need.
Peter Kyle
That means each individual who comes to the UK must now go through a visa application process to make sure that they are of the right standard to come into our country.
Phil Eckersley
It needs to be fair.
Peter Kyle
Your point is that you say that, at the moment, it is unfettered. You want it to be fettered. You want to check the people who are coming in.
Phil Eckersley
It needs an element of control.
Peter Kyle
“Control” means tests of the people who come in.
Phil Eckersley
If somebody comes into the country, they have to have some kind of proficiency in the English language.
Peter Kyle
It is quite a simple question: in order to check that they have what you want, the skills you want, including language, that means you want each individual who comes into our country to be tested.
Phil Eckersley
I believe that we should have a fair system of immigration and it should apply to all people across the world, whether they are from Australia, China or Germany.
Peter Kyle
Therefore, every individual who wants to come to our country needs to be tested to see that they have the right skills.
Phil Eckersley
I am not a creator of policy. That is the Government’s job.
Peter Kyle
Can you tell me how you can allow people to come into the country and guarantee they have the right skills, without meeting them and testing them first?
Phil Eckersley
I am saying that we have one rule for one group of people and another rule for another group of people.
Peter Kyle
You want one rule for every group.
Phil Eckersley
It needs to be fair. The rules that we have for the other group mean that it is costing my business and businesses across the country more money in the recruitment process. As you will know from having a small business, in the first two or three years, you are literally doing everything yourself.
Peter Kyle
We are drifting away from the question, and I am surprised you cannot answer quite a straightforward question. If we have to test the 600,000 to 700,000 people who are coming into the country, is that not going to cost an absolute fortune? Will we not, as a country, have to put in enormous resources to establish a visa system where we can have the bureaucracy in place, so that somebody can apply and every EU national who wants to come here needs to apply to have a test to see if they have the competencies that you are talking about, before they can come in? If one of the reasons why you want this system is because, at the moment, EU membership is costing us a fortune, what you are suggesting is replacing it with a system that is very narrowly focused on skills and will cost us broadly the same.
Phil Eckersley
It is not about having a narrow focus. It is about having an understanding of the quality of the people who are coming into the country. Australia do it and they have done it for years.
Chair
Peter, I am going to move on.
Phil Eckersley
Think of the saving to companies if you take that burden out from their recruitment process.
Peter Kyle
Australia has higher rates of immigration than we do.
Chair
Peter, I am going to move on, because I am very conscious of time. We are overrunning. Alex, you started off by saying that you need to attract talent. There is a skills crisis. How does our membership of the EU help us address that skills crisis?
Alex Depledge
In the long term, it needs to be done through education, and I do not mean just by primary and secondary school. I mean all kinds of branches of education. That is going to take generations to come through and to fix. In the short to medium term, I am at a bit of a loss as to how we continue to staff up our high‑growth businesses and our tech businesses. By the way, I am not just pro‑European immigration; I am pro‑global immigration, because that is the only way that I see us being able to grow our businesses and plug that skills gap. First of all, we need to admit that we have a skills gap, and I do not see that much ready admittance coming in the public arena. I just want to preface this with the fact that I did run a small business. It was five people and I managed to grow it to 70. Regulation is regulation, and the confusion sitting round here about regulation is that people feel that that regulation comes down from the EU when a lot of it comes from our national Government. The European Union does not have a monopoly on burdensome, cumbersome, ill‑executed regulation. We have done a great job, a ham‑fisted job, of that ourselves. The European working time directive was issued in 2003. We have an opt‑out for that, which we used in my business. I do not get this whole “encumbered by red tape”, because we were not. To put this into perspective, between 2010 and 2013, we had 3,000 scale‑ups contribute £59 billion to this economy. That is the fine line between recession and recovery. I feel for small businesses; they have a tough job in or outside the EU, because it is hard when you are a small company. But if we do not want to cut our legs off on the recovery of our economy, powered by our digital and technical businesses, then we need to stay in the EU.
Richard Fuller
Alex, just to pull you up on something, you talk about a skills shortage in the technology sector. The world’s most successful technology sector is the United States. They have a skills shortage, which they fit by bringing in people from China, India and other countries, but they do not seek to impose a supranational system of government over the United States, do they?
Alex Depledge
They have a federal Government as it is.
Richard Fuller
They do not say, “Oh, we need people from India and China for our technology sector, so let’s create a supranational Government,” do they? You are mixing things up, Alex.
Alex Depledge
I am not, sorry.
Richard Fuller
You are, because the skills shortage, which we all accept, is important to solve. There is an example, which is the world’s most successful technology sector, which is your sector. They solve it, but they do not create a system of government that requires them to have rules that are the same rules for India and the same rules for China. Why do we need that here?
Alex Depledge
Let me unpack your question for a second. Number one, the US has a skills shortage, too. The whole world has a skills shortage in technical and digital skills, and so they have immigration. They have lots of groups that lobby very hard for more visas into America to try to solve the skills shortage, and I am saying exactly the same thing.
Richard Fuller
No, you are not. Your argument is in favour of the European Union, not in favour of the skills shortage. You are conflating the two. America does not and it is more successful than we are.
Alex Depledge
I am saying that one way that we are combating some of that skills pressure in the UK right now is by sourcing talent from across the EU, which is easy to do, because we do not need to go through a burdensome, expensive visa process to get them in the country, which I have been through, trying to get someone from Israel in here. I am saying that 90% of my technical team came from across the EU and it cost me nothing to bring them here. I am not arguing for a supranational state over the US. I am saying that what we have now is working to alleviate it somewhat, but we need to do more.
Amanda Milling
This is a question to Phil and Julie. You have both talked about regulation and the impact on your businesses. What impact will leaving the EU have? Will the regulatory burden reduce?
Phil Eckersley
Personally, I do not see any upsides to being part of the European Union. I really do not. With Brexit, you might have a bit of a temporary disruption, but it is not going to affect my business. However, it will give our country control to respond to local demands, local issues, and local population and demographic issues, which cannot be responded to by EU regulations made in Brussels, when they do not know our local markets.
Amanda Milling
Back to my question, you have talked about various regulations and the regulatory burden. I hear this a lot from small businesses. Do you think that this regulation is all going to disappear on 24 June, or maybe 25 June, as a result of a leave vote?
Phil Eckersley
It depends what we do: if we have Article 50 or we just rescind the European Communities Act. It depends what we do. I imagine that we will keep the EU directives and phase in our own forms to replace those, in the benefit of the country and local issues. Just coming back on the points I have made in this meeting, it is about our country being able to respond to the demands on it. There are huge demands in the social care sector. The EU is not a responsive institution and Westminster is not either, but at least it is a bit closer to home and they have an understanding of local issues and local governance. I do not see how the EU can make my life better, as a business owner in the social sector, or my clients’ or my carers’ lives betters. Our workers’ conditions are leading in the world and we have not needed the European Union to have those.
Amanda Milling
Julie, you talked about health and safety, and various different kinds of regulations that affect small businesses. What impact do you think leaving the EU will have?
Julie Price
It will not be an immediate impact. To even suggest it is obviously is ridiculous. Again, I would rather talk long term. A lot of this is short‑term fix, short‑term fix. Long term, we are going to have to be a bit more responsive and flexible for employment. You really cannot do it with people that you cannot see or when you do not know how it works. At least here we can try to change things. I have sat on the FSB for health and safety regulatory reform. They were sending stuff through saying, “Can you comment on this very quickly?” We did our best and that has only just started. It is the first time I have seen the Government send it to somebody at small business level to have a go, and we have. We have commented on various things that are going through. We get them very late. They are huge piles of paper, but we are trying and we want more of that. We need to be very competitive. It has gone global. It is beyond Europe with the internet, and that is the feedback I am getting back from my clients, who are dealing with the world. To have that extra layer just fogs it up. We are not quite sure who to go to and how to reverse. Reversing things is almost impossible. It is very difficult. I am a true believer that we can do it. That is all I see. You have to understand it. That is all I have seen in 27 years: local businesses. I do not mean just high‑tech, but tradespeople. We probably have the best electrical standards in the world. You know that it is 40 years and we are still on two plugs when you go to the continent. We have the best electrics; the electrical contractors will tell you that.
Amanda Milling
In a post‑Brexit world, would you not have a sense that Westminster would create the regulation that might otherwise have come from the EU and that things are not going to change from a regulatory perspective?
Julie Price
We have already for even the simplest things. You know these plastic bags; did you not notice that they are not chargeable for small businesses? We have already started, as small as it sounds. Treating little business as consumers for utilities is FSB‑led. We are trying. That is me with my FSB hat on; we are trying. It is because small businesses do not really have a main voice, but they are so important.
Chair
Can I just thank you for your time? It has been really informative and we are very grateful. Thank you very much.