With the UK's referendum on its continued membership of the European Union fast approaching, now is good time to take a look at how Brexit might affect the events industry.
Immigration and the economy, the two dominant issues in the referendum campaign, are both of crucial importance to event planners. The state of the economy is a key determinant of the success of events and immigrant workers form the backbone of the venue industry. As a result, many events planners have been taking a close interest in the referendum.
For those who remain undecided, here is a quick rundown of the ways in which Brexit might impact on the events sector.
If the UK withdraws from the EU then there will be an immediate economic shock. Economists from across the political spectrum agree that the short term impact on the UK economy will be negative. The differences between economists concern the size of this negative impact and whether the long term impact of Brexit will be positive or negative.
Regarding the short term effect on the UK economy, there will be immediate uncertainty following Brexit about the kind of trade deal that can be secured with the EU. For as long as this uncertainty continues, companies will be reluctant to invest money in the UK. Given the slow workings of the European Union, this period of uncertainty and reduced growth could continue for several years until a deal is signed between the UK and the remaining EU states.
Reduced growth will lead to companies having less money to spend and reduced demand for events agencies. For a period of time, Brexit will undoubtedly have a negative effect on the events industry.
However, straitened times aren't necessarily entirely bad news for the industry, as Rick Straiton, managing director of Smyle, points out. He told Conference & Incentive Travel Magazine that the last recession “shook up a complacent market with dated buying practices and budgets and little ROI analysis attached to them.” A post-Brexit slump could have a similar effect in driving the industry towards greater efficiency.
Longer term, the effects of Brexit are harder to predict. Given the importance of the EU as a market for British goods and services, any additional impediments to trade that are imposed as a result of the UK no longer being part of the single market will have a negative impact for UK exporters.
Quite how strong this impact will turn out to be will depend on the deal that is struck between the UK and the EU. If the deal involves the UK becoming part of the European Free Trade Area along with Norway and others then the disruption to trade won't be all that great. However, this would require the UK to accept free movement of people from across Europe, which is something that the Vote Leave campaign seem unwilling to accept.
A bilateral agreement between the UK and the EU, on the other hand, could be close to achieving free trade or it could have much greater restrictions.
On the positive side, Brexit will allow food and commodities to be imported to the UK at world prices without having to have the EU external tariff applied to them. This will reduce costs for UK businesses and for individuals, resulting in more disposable income and a boost to the economy. Pro-Brexit economists argue that this effect and a possible reduction in regulation could outweigh the effect of restrictions on trade with Europe on the UK economy.
The level of migration to the UK consistently registers in opinion polling as an issue that the British public regard as being of paramount concern. While the UK remains a member of the EU it must accept free movement across the continent. One of the motivations of people who are involved with the Vote Leave campaign is that they want to put an end to free movement.
For event planners, free movement has brought significant benefits. These include the motivated, skilled migrant staff that dominate the venue industry and the access to easy, cheap travel with the rest of Europe.
This latter factor has raised fears that Brexit could lead to global companies choosing to hold events in EU countries in preference to a post-Brexit UK. The prospect of more complicated travel arrangements could also hinder UK events companies from winning European contracts.
Reduction in the level of migration would have a knock on effect on the wider economy, which has broadly benefitted from free movement. This could contribute towards reducing the amount of money that companies have to spend on events.
The Vote Leave campaign have argued that by ending free movement with Europe they will be able to accommodate greater, higher skilled, migration from the rest of the world. However, if the reduction in migration is as severe as the Conservatives have consistently argued that it should be, i.e. to the tens of thousands per year rather than the hundreds of thousands at present, then there is little doubt that this will have a negative impact on the economy.
However, there is doubt over whether Brexit will lead to an end to free movement. Given the pro-EU majority in the House of Commons, it has been mooted that MPs might choose to sign the UK up to EFTA following Brexit. This would have the effect of continuing free movement after the UK has left the European Union.
Given the level of uncertainty concerning every aspect of the EU referendum debate and the hotly disputed assertions from both sides, it is unsurprising that polling of events professionals has found a large number are undecided.
However, given the importance of migrant labour, easy travel and a stable economy for the business it is perhaps equally unsurprising that the industry leans towards a Remain vote, with flash polls conducted by C&IT Magazine finding clear majorities for Remain and a survey from the Business Visits & Events Partnership finding widespread concern about the effects of Brexit.