The Conservative Party’s election win in the U.K. is likely to mean increased investment after three years of uncertainty.
With the government now holding a clear majority, the U.K. is expected to leave the European Union at the end of January, although caution remains around the form this would take.
The Prime Minister was expected to get the withdrawal-agreement bill enacted approving the Brexit deal agreed to by Parliament, potentially before Christmas. The country would then enter into the 11-month transition period running until December 31, 2020.
Yael Selfin, chief economist, KPMG U.K., said, “Reigniting investment spending and accelerating growth will be key for the new government but as the cloud of uncertainty around an EU deal is likely to remain throughout next year, public spending will need to do the heavy lifting.
“Although there is a broad consensus that a measured increase in public spending is right for the U.K., limited capacity, both within government as it focuses on completing a deal, and in the labor market, call into question the extent of a boost it will bring next year. It could now be time to accelerate devolution and reconsider U.K. future migration policy."
The issue of migration was key to the hospitality sector, with EU workers providing a third of the hours worked in U.K. hotels, according to research by Professor Chris Cowls and Professor Andrew Lockwood from the University of Surrey.
The pair told the recent HOSPACE conference in London that the number of seasonal hours worked by European staff in U.K. hotels had significantly decreased.
The government’s position on the matter had yet to be clarified. In the run-up to the election Boris Johnson talked about an Australian-style, points-based immigration strategy.
Provided the Brexit deal was agreed, free movement of people would continue to operate as usual during the implementation period from exit day to December 31. During this time EEA/Swiss nationals and their family members would be able to enter, reside and work in the U.K. on the same basis as before.
According to Andrew Osborne, partner, Lewis Silkin, “It is likely that many of the changes suggested in the Immigration White Paper published in June 2018 will be put into place; these include abolishing the Resident Labour Market Test, potentially lowering salary thresholds and opening up Tier Two to lower-skilled workers, in part to address the predicted skills shortages when free movement comes to a halt.”
It wasn’t just staffing, with UKHospitality CEO Kate Nicholls looking to government support to deliver “employment and an increase in skills and opportunities across the board,” but also “the promised reduction in business rates delivered at the earliest opportunity.”