Nick Mosley column: Be careful what we wished for with Brexit

Unfortunately that doesn’t mean our local economy will be shielded from the negative impact of Brexit, and particularly not the sector I work in.

Tourism and hospitality workers from the EU are not only doing valuable but fairly low paid jobs that the British don’t want to do; they are also bringing to our industry skills and expertise that we can’t just magic out of thin air overnight. In the city’s hotel sector around 75 per cent of frontline staff are currently non-British EU nationals. Many of these employees demonstrate a commitment to lifelong careers in hospitality, rather than a stop-gap job until something ‘better’ comes along, which is often the unfortunate case with those born and bred here.

Whilst restricting EU immigrant labour may push up wages for workers, the impact of that will obviously be businesses either taking a hit absorbing that cost or increasing prices and passing them on to consumers. As we’ve seen in recent weeks through the problems at high street restaurant power houses such as Jamie’s, Byron and Prezzo, unexpected and unforeseen changes to a businesses’ cost base - whether living wage or rent increases or spiralling ingredient and supplies - can easily tip a business into the red. Across the tourism and hospitality sector, the cost of food and drink produce and other imported supplies has increased significantly since the post-Brexit vote drop in the value of the pound. This has only been compounded by the recent increase in high street business rates that have had a crippling effect on all sorts of consumer-facing businesses, not just tourism and hospitality.

There is a rather lazy myth that the devaluation of sterling will mean more people holidaying at home. Evidence from the recession of 2008-09 showed that this wasn’t really the case, and despite a welcome bump in British people enjoying our country’s tourism offering, it was hardly an earth shattering return to the ‘good old days’ with people flocking to the British seaside. The consensus then, and one which I have no doubt prevails today, is that our annual two week holiday in the sun is a necessity not a luxury. Economists would call it an inelastic product.

OK, we may do less European city breaks, and may substitute Greece for Thailand, but our summer holiday is precious to us and won’t be sacrificed until absolutely necessary, and certainly not for a fortnight in Sussex. And, to be fair, you’d be hard pushed to afford two weeks in some British resorts in the summer anyway. When purses are squeezed, any additional surplus cash consumers have is more likely to be spent on small pick-me-up treats alongside consolidating debt, not a weekend in one of the UK’s tourism hot spots. Less disposable income in the average Brit’s pocket doesn’t translate into a boon for seaside tourism, and anecdotally the feedback is that domestic visitor overnight stays in Brighton’s hotels is currently down compared to last year.

But surely, the weaker pound makes the UK more attractive to overseas visitors? This is true and Visit Britain’s 2018 tourism forecast predicts continued growth in both footfall and spend. Against that we see that Tourism South East’s most recent analysis of in-bound overnight tourism for Brighton was the one core demographic that was down.

Not by a lot but certainly a trend to watch for, bearing in mind overnight visitors naturally spend significantly more per head than day trippers. But looking to the future, we have to look hard at ourselves as to whether Brighton will continue to be a dynamic and desirable destination that stays ahead of the curve. And how we achieve that.

The most profitable sector in travel is without doubt business tourism. A business visitor is likely to be staying overnight, travelling in comfort and eating well with colleagues and clients at local restaurants; most probably courtesy of his employer. Brighton has traditionally done rather well out of the MICE market – Meetings, Incentives, Conferences and Events – as we’re a city that delegates actively want to visit and our transport links are (relatively) favourable. Whilst our major hotels continue to invest in ensuring their relevance, the Brighton Centre is a decrepit old man who’s still hanging on with his grubby fingernails. to the odd major academic, technical or pharmaceutical conference but there isn’t much life left in her. With Brexit and the potential decline in UK in-bound business travel from Europe, the revitalisation and reinvention of this regionally important facility is more urgent than ever if we are to compete with far superior offerings currently to be found around the UK, and elsewhere.

Plumpton College – the only educational establishment in the country to award degrees in wine making and an important educator in terms of land management and food production – benefits massively from the UK being an EU member country though funding for collaborative research projects. Slipping out of EU university research funding initiatives and also student placement schemes such as Erasmus+ is of great concern.

This also poses the question of what fills the gap when other EU community cohesion and economic development funding stops, such as the European Regional Development Fund. I don’t think any of us now still believe the Leave campaign’s claim that £350 million a week would be repatriated and go towards funding the NHS, so there is no reason to believe that those duplicitous individuals currently sat around the cabinet table are going to have either the means or the political desire to stump up funding to fill these gaps. Fortunately, Sussex is a relatively rich English county that hasn’t relied too heavily on public funding. Even ahead of 29 March 2019, the local authorities in Leave-voting Cornwall are already highly concerned about the pinch. EU money has done much to support the tourism and hospitality infrastructure of many of the UK’s regions. In our city, Interreg has supported the Royal Pavilion; in our county, small independent family farms growing and rearing produce for our restaurants have benefitted from our membership of the Common Agricultural Policy.

Gatwick Airport has been noticeably quiet in terms of the impact of Brexit on their business. Although, to be fair, so has Heathrow. Presumably neither wants to make any political enemies in the quest for a new runway.

Whilst claims that flights out of the UK could be grounded when we leave the EU bloc on 29 March 2019 might appear fanciful, there is currently still a distinct possibility if we don’t agree to some oversight from the European Court of Justice. Even with a new UK-EU bilateral open skies agreement in place, its still likely that Gatwick airport will become a less important hub for short-haul flights as there will be fewer EU citizens living in the UK or travelling here for business. That isn’t going to impact on your weekend away to Amsterdam or Rome, but doesn’t bode well for connections to smaller regional airports.

I’ll leave you with a quote from this very newspaper from 2013, by Mid Sussex MP and Tory grandee Nicholas Soames when he stood in parliament to decry the pre-Brexit referendum. I dare say it summarises how the majority of us not only in the tourism and hospitality industry feel about the clear and present risk posed to our businesses and our city, but also how many residents in the city feel too. It’s a very succinct statement that the Brexiteers driving the all-new 2018 model Brexit Leyland Mini towards the White Cliffs of Dover should also perhaps take note of:

“May I beg this House to remember that with all its [the EU’s] imperfections and with all the problems that it has, our country has free and fair access to the single largest integrated economic area in the world – a single market of 27 countries and of 500 million people, with a gross domestic product of 60 trillion US dollars.

“I could not possibly look my constituents in the eye and tell them that I was prepared to risk it.”