What might leaving the EU mean for contractors?

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Brexit has become an all-consuming issue for the Government. And now, after having convinced the EU leaders to accept her withdrawal agreement last weekend, Theresa May must have it signed off in Parliament next month.

MPs are set to cast a vote on the 11th December, and only time will tell if the Prime Minister can persuade her own party and the growing number of opposers to accept what she’s described as a “take it or leave it” deal.

Amid all of this, Theresa May also faces an uphill battle to keep her job. So far, at least 20 MPs have written letters of no confidence in the Prime Minister, while the Brexit secretary himself, Dominic Raab, has resigned. Should the number of no confidence letters reach 48, a leadership election would be triggered. And one that Theresa May would not be able to run in.

Many cabinet members who have not left their roles have said they want to drastically improve on the Prime Minister’s 585-page withdrawal agreement, and it’s of no real surprise that the vast majority of MPs from the Labour Party, the Liberal Democrats, the SNP and the DUP parties are also expected to vote against it.

More than 18 months after the UK voted to leave the European Union, there is still a cloud of uncertainty hanging over Brexit, and there are plenty of questions still needing to be answered. This goes for rules around immigration and freedom of movement, and trading agreements between companies here in the UK, in the EU and globally.

 

So contractors, like many others, can be forgiven for expressing their scepticism. In a recent survey, only 11% of more than 1100 independent workers said they have faith in the Prime Minister to secure a Brexit deal that serves in the best interests of UK business. 36% are unsure (and why wouldn’t they be?), while 53% – the majority – simply can’t see it happening.

Given that six in ten contractors voted remain, most will want an agreement that allows the UK to retain strong ties with the EU. The 30% who voted leave will hope Brexit means the UK can do business on its own terms, either with EU countries or further afield. Presumably, the 10% who didn’t vote still wish for the best.

Do we know how Brexit will impact contractors? Well, there are few certainties, but here are a few things worth focusing on…

 

Will freedom of movement go?

Up until now, as European citizens, UK contractors have been able to live and work freely across Europe thanks to ‘freedom of movement’ – one of the cornerstones of EU membership. Should the Prime Minister’s withdrawal deal be accepted by MPs next month, this right is expected to be removed after the transition period, which lasts until 31st December 2020. It is likely that a skills-based immigration system will be introduced instead.

The Brexit plan details visa-free travel for short-term trips to EU countries and temporary entry and stay for business purposes. How much this will impact contractors working on longer-term projects across the continent remains to be seen though.

 

An immigration system based on skills and talent?

In theory, the Brexit agreement will prioritise the skills and talent of any individuals coming to work and live in the UK, and not the country they come from, as the Prime Minister recently pointed out.

 

“Once we have left the EU, we will be fully in control of who comes here. It will no longer be the case that EU nationals, regardless of the skills or experience they have to offer, can jump the queue ahead of engineers from Sydney or software developers from Delhi.”

Will this lead to higher competition for contracts in the UK? Maybe. Whether it does will ultimately hinge on the UK’s ability to hold onto its status as a global economic hub – a place where multinational companies want and need to keep their offices.

 

Will global companies pull the plug?

At this moment in time, there is no detailed trade deal in place. Not yet anyway. The future trade relationship is yet to be decided.

We do know from the withdrawal plan that the UK will remain in the single market until the end of 2020. And while this doesn’t rule out global companies relocating in the long run, it does at least give the Government time to negotiate a deal that makes sure these businesses want to stay. However, there will be concerns about whether the Prime Minister is capable of doing so.

Uncertainty is always a disincentive for large companies wanting to plan for the long term. And for the many thousands of contractors who work with multinational companies in the UK, this is a real worry. If these businesses decide to allocate staff in countries that remain in the EU, there could well be an impact on the demand for contractors.

A counterpoint has been expressed by a number of recruiters and sector experts though, who say that in the short term, uncertainty encourages companies to engage contractors, given they offer far greater flexibility compared to employees. They make a reasonable point.

Contractors, much like everyone else, are currently left to wonder and debate about the true impact of Brexit. Until a deal is accepted by MPs, any hopes of a successful Brexit are in limbo. But with the 29th March 2019 – the day the UK officially leaves the European Union – approaching fast, let’s hope the nation isn’t left in the dark much longer.

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