Business is relying on politicians to make a deal with the EU that safeguards Britain’s future trading relationship with the continent, some of the leading figures in Wales’ business community told former First Minister Carwyn Jones in the latest Business News Wales digital discussion.
The current uncertainty over the shape of the trade deal that the UK Government is negotiating with the EU – and even whether there will be a deal at all – is unhelpful to businesses’ confidence and their ability to plan ahead, members of the panel said.
Carwyn was joined in the latest Wales Business Review by Kellie Beirne, director of Cardiff Capital Region City Deal; Ben Cottam, head of external affairs at FSB Wales; Ian Price, director of CBI Wales; and Alwen Williams, programme director for the North Wales Economic Ambition Board.
Kellie Beirne said she was very concerned about the UK’s continued membership of Horizon Europe, the EU funding programme for research and innovation, especially in the light of the Government’s stated aim to increase R&D spending to 2.4% of GDP.
“The real concern for me is that time is running out; we are hurtling towards this January 1, 2021 date. If there’s no clarity soon, our higher education institutions, our innovative businesses, our profile in terms of a leading science country, what will it all mean? That will have a massive impact on the economy and growth in innovation,” said Kellie.
She warned that if Britain had to leave Horizon Europe without a replacement in place, research programmes would come to a halt and research teams built up over many years would be broken up.
Ian Price said both sides in the negotiation were trying to frighten each other and it wasn’t helpful.
“We’ve got businesses at the moment that are desperately trying to deal with the hugely challenging situation with respect to Covid, and we’re all spectators with what’s going on in Brussels and London.
“Businesses are busy trying to keep their businesses afloat, dealing with all the challenges Covid is throwing at them, and they’re relying on the politicians to come up with a deal that everyone can make work. At the moment it’s really frustrating.
“I think we’ll end up with a deal, but I think the next 6 weeks are going to be really uncomfortable for us all.”
Ben Cottam said small businesses didn’t know what they should be preparing in terms of new trading relationships and bureaucracy, and that lack of certainty was not helpful in businesses understanding what the next opportunity might be.
“Overwhelmingly, small businesses are more likely to trade with EU countries, and that’s likely to continue to be the case. What’s really important for smaller businesses is that they see a deal with a trading bloc that is so important to them and is so familiar.
“That’s not to say that they aren’t interested in international opportunities beyond that, but it’s really difficult to see what those might be while the negotiations are going on and things are so uncertain.”
Carwyn asked Alwen Williams whether Holyhead was ready for the reintroduction of customs between the UK and Ireland. She said there was potentially a huge backlog of heavy goods vehicles that would need to stay somewhere.
“The port can currently accommodate around 650 heavy goods vehicles at any one time. If these border checks cause delays there needs to be a contingency that can handle much more; you have to plan for the facilities available for the drivers, where they’re going to park, and how we’re going to keep that machine which is really economically important to us in North Wales moving,” Alwen said.
“I don’t think there’s going to be a large impact on foot passengers, but you only need to get it wrong once for it to become a really bad memorable experience, which has the potential to really damage the economy for the long term.”
Carwyn’s guests also talked about the balance of services and manufacturing in the economy, and whether risk aversion in banks and other institutions was cultural or the result of rules and regulations. Ben Cottam said there was no lack of entrepreneurial spark in Wales, but Ian Price said there was a fear of risk and a stigma attached to failure.
Wales Business Review is hosted by Carwyn Jones and is published on Business News Wales.