The last working day before Christmas, December 23, marks six months since the UK voted to leave the European Union. Owen Meredith, Head of Public Affairs at the PPA, looks at what publishers want out of the looming Brexit negotiations.
A great deal has happened in that time, with a new prime minister, the re-election of the leader of the opposition, and the election of Donald Trump in the US. For many, however, the path to Brexit, and what our relationship with the EU and the rest of the world will be after the event, remains as unclear as it was on the morning on June 24.
In the whirlwind few weeks after that momentous and historic vote, there was an instant reaction by many to pause and take stock. Decisions were delayed and recruitment halted; bunkering down was in vogue. But as the dust settled, the reality that nothing had really changed began to take hold: we had voted to leave the EU but we were in danger of talking ourselves into an economic decline.
With that realisation, the economic cogs began to grind back into action. As the Conservative Party moved quickly to appoint a new leader, cutting short a three-month election process with the coronation of Theresa May, government too moved back to action mode – or so it first appeared. But it is now six months on, and Brexit Secretary David Davies admitted to parliament this month that “the plan is still being worked on”.
For all the criticism the government has received over its handling of the negotiations (which are yet to formally begin) and the lack of a clear direction, the opportunity for industry to shape government policy has never been greater. For once at least, the doors of Whitehall have been opened and the politicians are listening.
So, what do publishers want from the new government and Brexit negotiations? We conducted a survey among PPA members to shed some light on this question, and to understand more about their Brexit fears and concerns.
A Bespoke Deal
Front and centre, a clear majority of publishers want the UK to remain full members of the Single Market. The largest publishers (500+ employees), across both consumer magazines and Business Media, are the strongest advocates of the Single Market, with 80% and 67% of those respective groups backing this option. Political reality makes the option of Single Market membership unlikely, however, given that free movement is a fundamental principle, and so publishers have a clear preference for a bespoke UK-EU deal over European Free Trade Association (EFTA) or European Economic Area (EEA) membership.
Although current EU tariffs for printed magazines, digital media services, and related paper products entering the EU market are all at nil, publishers are highly concerned about the prospect of tariffs: 41% state it would impact their business, rising to 80% for the PPA's largest members.
It will come as a relief to many that the decision to leave the EU has not impacted recruitment plans. Some companies have placed a freeze on UK recruitment, but the vast majority (87%) say Brexit has made no difference and just 2% are expecting to reduce headcount. With more than two thirds of publishers employing staff from EU nations, there is however a great deal of concern about their ability to retain and attract EU nationals.
That concern is greatest among Business Media publishers (60%) and those with 500+ employees (80%) who have jointly recruited 10% of new employees from other EU member states in the past twelve months. Comparatively, 73% of members employ foreign nationals from outside the EU, making up 7.7% of their UK workforce.
Publishers across the board show a strong preference for EU policies to be retained, matching their desire to remain in the Single Market. Business Media publishers and those employing 500+ feel much more strongly about this, with 66.7% wanting to see free movement of labour retained, 82% wanting free movement of capital retained, and 77.8% wanting single European / UK trademark registration retained.
Most publishers also wish for EU advertising regulations to be retained, although there is slightly more support for UK variants than is the case on EU Policy, reflecting a desire to reduce some of the damaging elements of advertising regulations that increasingly threaten to undermine advertising freedoms.
With 90% of PPA members earning revenue from other EU member states, the referendum result has had a direct impact on investment decisions. A total of 30% of PPA members say they have taken investment decisions as a direct result, mostly to delay investment in the UK.
Asked about government plans (quietly shelved in the Autumn Statement) to reduce Corporation Tax to 15% against a set of similar costed alternative proposals, there was clear support for lower Corporation Tax as a route to driving investment in the UK. Publishers equally supported a cut in Business Rates to boost investment and confidence with over 72% rating this a highly-effective measure.
So, as we get ready to say goodbye to 2016 – a year that has delivered no end of shocks and surprises – we head into the Christmas holidays to recharge and refresh, ready to begin anew in 2017 with a solid base of evidence behind us backing publishers’ vision for a post-Brexit Britain. Time to get on with the deal.
“A clear majority of publishers want the UK to remain full members of the Single Market.”