The Government's negotiating objectives: the White Paper Contents

Annex 1: Note of meetings in Wolverhampton, 19 January 2017

Introductory meeting with local councillors and LEP

Prof Ian Oakes

Deputy Vice-Chancellor

Prof Andy Westwood

Director of University Observatory

Cllr John Reynolds

Cabinet Member for City Economy, Wolverhampton City Council

Stewart Towe

Chair of the Black County LEP

John Wood

Chair of Economic Growth Board

Dr Keren Jones

Service Director City Economy, Wolverhampton City Council

Tim Johnson

Strategic Director, Wolverhampton City Council

The LEP presented the area’s 30-year economic growth plan, which began in 2003. Roughly half way through the plan and the city is on track to meet its growth targets, particularly in infrastructure. One of the biggest challenges Wolverhampton faces is the skill levels in the city. Wolverhampton has double the national average of people with no qualifications. It also has the fourth highest proportion of young people in all LEP areas. As such the LEP is investing in bringing young people into the workforce. There is a mismatch between the investment in the city and the low levels of skills and employment. EU funding has increasingly been targeting socio-economic factors and worklessness.

The key issues for Wolverhampton from Brexit were set out as:

It was noted that Brexit had already impacted foreign direct investment in the city. The example was given of a manufacturing company which had decided to invest in Holland rather than Wolverhampton in the wake of the referendum result. In spite of this, it was suggested that the business community welcomed the challenge of Brexit, that it was their responsibility to react to changes in circumstances and make it work.

In responding to questions, it was noted that EU funding had targeted worklessness and low skills in the city which required longer-term investment. There were concerns that UK Government funding tended to work on shorter time-frames. It was also suggested that Brexit was an opportunity to free up funding and make it more flexible, so it would not be as prescriptive as European funding has been, for example in terms of the size of companies. Rather UK funding could be channelled through LEPs who understand local needs and opportunities.

It was argued that through greater devolution, decisions on funding could be made locally on key priorities such as transport, energy, employability and an education system to reflect local economic needs. EU funding was described as limited in compartmentalising funding into either business or education for example, while Wolverhampton would like to link these two sectors.

A good outcome from the negotiations was identified as a level-playing field, with a free trade agreement and no tariffs. The significance of non-tariff barriers depended on the business, for example, they are very important for the automotive sector. Less regulation was also listed as a positive. Currency fluctuations were described as key for manufacturers, while being out of the customs union would be a bad outcome. Control over immigration was needed while still allowing the UK to access skills. Time to adjust to the deal the UK reaches with the EU would be vital, the example was given of 12 months.

Roundtable with university staff and students

Prof Ian Oakes

Deputy Vice-Chancellor

Prof Nazira Karodia

Dean of the Faculty of Science and Engineering

Prof Andy Westwood

Director of University Observatory

Prof John Darling

Dean of Research

Derek Walton

Head of the International Centre

Ray Flynn

Policy Adviser to the Vice-Chancellor

Simon Brandwood

Head of Careers and Employment Services

Habiba Amjad

Students’ Union President

Sohaib Farooqui

Home student

Joshua Sutliff

Home student

Aaron Green

Home Student

Iman Hussain

EU student

Mark Anderson

EU student

Wai Lok Ng

International student

Lianne Brooks

Regional Officer, Unison

Tatiana Panteli

European Business and Research Development Manager (Brussels via telephone)

Prof Oakes provided an introduction to the University, drawing the meeting’s attention to the fact that 75% of home students came from a 25 mile radius, while the university was also global, attracting students from over 100 countries with around 1,000 EU students. EU funding had contributed to the development of the Science Park, which housed 80 businesses, and the Innovation Centre, home to 40 businesses. Within 12 years, the University expected to have in excess of 150 businesses located on campus. The University had seen a growth in research, including world-leading research.

When asked about research income, the University confirmed that disruption had so far been minimal but that was likely to change following the triggering of Article 50. Wolverhampton had focused on research into local factors, such as deprived communities, and cuts in this research could create difficulties in addressing such local problems. There were concerns about the focus of future research funding if allocated by Research Councils. It was also suggested that the loss of EU research funding would also impact on the attractiveness of the UK for talent, particularly staff. It was recommended that the Government seek to maintain research funding and access to research networks across Europe.

The Erasmus programme was considered vital for providing students with opportunities. It was noted that last summer, the University sent 200 students to Europe with Erasmus and that 98–99% of students with international experience found employment within 6 months of graduating.

Students were particularly concerned about the loss of Erasmus. The Committee heard that European experience made students more employable in the UK and students with international placements tended to get a better class of degree. There were worries about employment opportunities for graduates once the UK left the EU and any obstacles that would create for finding work and living in the EU. It was suggested that Brexit had created a “cloud of uncertainty” around opportunities and experiences, as well as fees. However, like every UK university, Wolverhampton took in far more students under Erasmus than it sent out – the appetite for English taught degrees in the rest of Europe was immense and was likely to continue.

In terms of applications for places at the University, applications from EU students had fallen a little but the University had acted quickly to guarantee fee levels for those starting in September 2017. The University would not be able to make such guarantees for students beginning in September 2018. It was noted that students were thinking twice about pursuing Masters or PhDs in Wolverhampton since the referendum. Students also found the prospect of visa applications daunting. Some were concerned about employment opportunities owing to headlines that employers were poised to cut graduate training schemes. There were questions around the future of internships and knowledge exchanges with Institutions in the EU.

It was explained that lower numbers of students at the University could have knock-on effects for the wider area with lower numbers of staff. Often universities are the biggest employer in their area, not just of teaching staff but also administration, cleaning staff etc. A drop in University students and staff would impact local businesses such as shops and bars. It was noted that unemployment is already a concern in the West Midlands. The importance of maintaining European employment law, such as flexible working and equalities legislation, were also highlighted.

At least 89 out of 230 staff at the University are EU Nationals. They are sitting tight at the moment but would welcome “more knowns than unknowns”. The University had set up an EU Futures Group to provide advice and support to staff. In terms of a future immigration system, the University would like continuing access for international postgraduates, research staff and highly-skilled grades. It was suggested that the Government should adopt a fairly light-touch approach. At present, the bureaucratic difficulties of bringing in non-EU talent were considered very burdensome for the University and for individuals. It was argued that such difficulties could make people go elsewhere where they could get a similar service for less effort.

In Brussels, the University had noticed an initial tension with partners after the referendum result but that had returned to positive communication. It was suggested that European partners were looking to the UK for solutions and were sympathetic to the situation. The University is fortunate in having a small presence in Brussels and can meet partners face-to-face and participate actively at an EU level. However, many were concerned about the uncertainty once Article 50 is triggered. For example, when Switzerland limited movement of people, the country lost access to Horizon 2020. Even if the UK were able to provide funding for research nationally, it would not have the same level of international recognition or peer review. The University had benefitted from Horizon 2020 funding, and also structural funding in developing facilities and engaging with businesses. This is a key part of the institution’s strategic plan so they need some certainty on where the funding will come from once the UK leaves the EU. The University asked for the same level of funding but with more flexibility than is usually the case with government funding.

Roundtable with local businesses

Prof Ian Oakes

Deputy Vice-Chancellor

David Danger

MD of UTC Aerospace Systems and Chair of Employment and Skills Board

Jeremy Vanes

Chair of the Royal Wolverhampton NHS Trust

Peter Comforth

Director of Retail, Benson and Elliot

Sam Hudman

Senior Project Manager, Carillion

John Wood

Chair of Economic Growth Board

Corin Crane

CEO, Black Country Chamber of Commerce

Phil Barnett

Chair of Governors, Wolverhampton Grand Theatre

Sham Sharman

Owner, Zuri Coffee and Chair of Wolverhampton Business Forum

Ninder Johal

President, Black Country Chamber of Commerce

Keith Harrison

Editor, Express and Star

Cllr John Reynolds

Cabinet Member for City Economy, City of Wolverhampton Council

Marc Fleetham

Director of Business Solutions, University of Wolverhampton

Stephanie Peacock

GMB Union

Rachel Eade MBE

Director, RED Ltd.

James Martin

Partner at CCW Recovery Solutions / Crowe Clark Whitehill LLP

Paul Cadman

Business Consultant to Manufacturing Sector, Stone Tile

Ian Timmings

MD, JH Lavender Ltd

Darren Peach

Commercial Director, JH Lavender Ltd

The main theme to arise from this discussion was the need for clarity. There were questions about whether there would be a sectoral approach, what would happen to businesses which rely on EU nationals, what would replace European Regional Development Funding, would there be tariffs and the impact on parts crossing borders, what regulatory frameworks would there be, and would the UK be able to influence the regulations which affect businesses here.

The Committee heard that businesses would be able to adapt to any changes arising out of Brexit, but that they needed time to prepare and adjust, for example, in terms of administration, resources, skills and getting their products here. There were calls for a transitional period during which support could be provided to businesses for working with changed systems, new paperwork, and to improve capacity. It was agreed that 6 – 12 months would be long enough for businesses to adjust.

The biggest gap in information was identified as tariffs and customs. They said it was difficult to get good quality data on what tariffs will look like and that the flow of information from Government agencies to businesses needs to improve. It was described as a need for the “education of businesses” for a different way of working. For big businesses who are already well-versed in the paperwork that comes with tariffs and customs, the most pressing concern is delays at the border. This could be addressed with a more streamlined process such as an approval mark if companies meet certain criteria.

It was recognised that there was a need in Wolverhampton and the West Midlands for highly-skilled staff and that any new immigration system needed to be flexible to respond to changing needs in future. It was noted that where the UK can’t grow its own talent, then businesses become hostages to agencies. This is particularly evident in the NHS, for which it would take years to train up a local workforce. It was suggested that, while the Government can’t control currencies, it can control talent and skills and should secure access to the right people.

Businesses called for small, flexible funding programmes through which skills gaps could be identified and workers retrained, for example, for haulage drivers. It was noted that Wolverhampton had a low level of skills but not a low level of vacancies. There was no evidence that EU workers were taking British jobs. It was suggested that those who are out of the jobs market were now further from it than ever. This was not a Brexit issue, but Brexit has highlighted it. Wolverhampton would have to improve skills in the town and local area. The suggestion was made that funding be allocated through LEPs who understand local issues and needs.

3 April 2017