The Creative Industries Federation has urged creative workers and businesses to start preparing for a “no-deal” Brexit, as the risk of this scenario continues to rise.
The organisation has issued a guide to help workers in the creative industries understand what it could mean for them if the UK were to crash out of the European Union (EU) on 29 March 2019 without an agreement.
The news comes as Brexit secretary Dominic Raab issued 24 papers with guidelines about how various sectors could prepare for a no-deal Brexit, covering everything from medicine to nuclear industries.
Alan Bishop, chief executive at the Federation, says it is “vital” that preparations within the creative industries start now for what “could be a catastrophic no-deal Brexit”.
In a Federation survey, 21% of creative businesses said they would consider moving to another country in the case of no-deal. Roughly three quarters said it would be more difficult for them to operate if immigration was restricted.
Some firms were already moving parts of their company abroad to continue to benefit from the EU, according to the Federation, but the organisation recognises this is not an option for many creative firms.
A new Federation guide penned by Bates Wells Braithwaite legal firm provides a series of pointers about how to mitigate issues that could hit companies if the UK fails to finalise a deal in time, giving advice on what companies can do now to minimise future problems.
The three key areas where creative industries could be affected are to do with people, trade and funding, according to the Federation.
Residency and freedom of movement of people are high up on the list as there is a large number of workers in the creative industries from the EU. A survey by the Federation found that three quarters of the 250 business respondents employed EU nationals.
In the event of a no-deal, the UK government has not given a guarantee about what will happen to EU nationals living in the UK.
An EU settlement scheme was negotiated by the Home Office that would allow those already living here to apply for permanent resident status if a Withdrawal Agreement is reached – but it is not known if this will still apply in the case of no-deal.
The Federation suggests companies review how many of their workers are from the EU, including freelancers that they work with and provide them with support. It suggests looking into different types of visas that are available to those outside of the European Economic Area (EEA).
These include Tier 1 (Exceptional Talent) visas, Tier 2 (General) visas that apply to those in jobs with staffing shortages and Tier 5 (Temporary Worker – Creative) visas, which could be used for those on short term contracts and temporary work for under 12 months. Employers in the UK looking to take someone on through a Tier 2 and 5 visas would need to get a sponsor license.
The Federation guide encourages creative freelancers from both the UK and EU to speak to companies they work with now about their future options.
Issues regarding trade are also important to prepare for, according to the guide, which says UK creative exports of goods and services are worth £40.2 billion.
In the case of a no-deal, border checks and tariffs on goods being traded between the EU and UK could be put in place, all of which may cause delays and increase costs. There would also be more difficulties trading online as the UK would drop out of the digital single market.
Currently, 45% of service exports from UK creative industries and more than 40% of creative industries goods go to the EU, according to recent UK government figures.
Suggestions in the guide on how to prepare for this eventuality include checking which products and services could be affected so companies are ready to respond if needed.
Additionally, professional qualifications may no longer be recognised automatically in the event of a no-deal, so the Federation suggests considering whether acquiring any additional EU qualifications may be beneficial.
Funding is another key area that could hit the creative industries.
While a preliminary agreement was previously made between the UK and EU to ensure funding from various schemes would continue until 2020, this will only apply if it is finalised in detail in a Withdrawal Bill. The UK would also have to keep up their own funding commitments to the EU.
This could affect those receiving funding through programmes such as Creative Europe and Horizon 2020.
In the case of a no-deal Brexit, funding could be at risk beyond 29 March 2019 and there would be no access to future EU funding for UK creative businesses.
The Federation guide suggests preparing by assessing which funds may be affected and checking under what circumstances funding could be stopped or even taken back, for example, if it is dependent on being based in an EU member state.
It also advises starting to consider now where to find funding for future projects after Brexit.
Other areas the Federation suggests creative industries should be prepared for include intellectual property, as it is unclear how trade mark registrations could be affected post-Brexit, and data transfers, which includes ensuring companies are General Data Protection Regulation (GDPR)-compliant and have “clearly set out data security measures”.
No-deal would be worst scenario, says Federation
Bishop says it is difficult to imagine a situation that would be worse than a no-deal, but that this scenario was looking increasingly likely the closer we get to March without a viable Withdrawal Agreement or future partnership plan.
“The huge uncertainty clouding the Brexit negotiation process has made it incredibly difficult for creative enterprises to prepare,” he says. “However, this uncertainty and threat of a no-deal has already driven companies to take significant steps such as announcing they will be moving part or all of their operations abroad in order to benefit from EU membership.
“For the majority of small and medium-sized enterprises (SME)s, which make up the most significant portion of the creative industries, setting up a subsidiary somewhere else is simply not an option.
“Now is the time for these organisations to begin preparing for the impact a no-deal will have on their access to EU talent, funding and trade in the single market.
“This will require time and resources and poses a huge challenge for a sector where the average size of a company is 3.3 people.”
Although the Federation says that the chances of a no-deal Brexit are still “relatively remote” Bishop adds that as the UK’s “fastest growing sector”, it is imperative to the country’s economy to get “the best possible deal for the creative industries”.
The creative sector contributed £91.8 billion to the UK economy in 2016, making up more than 5% of the UK’s Gross Value Added (GVA).
Creative Industries Federation members can view the organisation’s report into a no-deal Brexit in full here.