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Implications of Brexit

Prof Mark Button, pictured, and Peter Stiernstedt, of the University of Portsmouth, wrote before the UK referendum vote on the implications of Brexit – Britain leaving the European Union (EU) – for the private security industry in the UK.

June 23 fast approaches and as it does it is worth pondering what the implications of a Brexit would be for the private security industry, if the UK votes to leave. The first thing to note is it is not clear what the arrangements will be, so this article will consider two of the most commonly identified options.

The first is the Norwegian model of membership of the European Economic Area. Under this the UK would largely continue as normal in terms of access to the single market, the free movement of goods, services, people, and capital; but would not have a seat at the table determining the rules. Business as usual for the private security industry then? Well, yes in the short term, but in the medium and longer term this could lead to some very interesting changes. The democratic deficit is apparent, with no formal representation in Brussels or Strasbourg, nor any voting rights on the legislation that eventually will become national law. Norway has had to implement some unpalatable regulations, such as the Third Postal Services Directive. Perhaps not the rule, but certainly the exception that proves that European regulations could emerge with significant impact upon the UK private security industry that we are unable to influence or stop.

The growing security challenges in the EU already combined with a European security industry that wants greater European intervention, with the removal of the ‘brake’ of UK membership could lead to regulations emerging specific to security. This could mean a scenario where the UK has to reform its regulation of private security to meet European standards. As our research on regulation in the EU has shown, as a mid-table country there could be much more to do if the European elite becomes the norm. There could also be plenty of more general regulation, that the UK would be powerless to stop. Potentially with significant implications for the sector, such as a new working time directive, health and safety rules to name some. The Norwegian model, however, has not been commonly advocated by leave campaigners, rather a relationship built upon free trade only. Clearly there is much debate over whether a wounded EU would do a favourable trade deal with the UK without freedom of movement of labour, but let us assume such a deal is achieved.
This would have significant implications for the private security industry. One of the political aims of such an arrangement would be to regain complete control over immigration. A consequence of this is very likely to mean it will become more difficult for people with low skills to come to the UK and work. The UK private security industry is such a low skilled sector and relies significantly upon labour from the EU. Indeed of the 371,266 licenses issued by the SIA, just under 15,000 are to those with EU passports.

Just under 4pc might not seem a lot and some of these will still be entitled to work because they are students or married to a British national. However, one must put it in the context of a broader low skilled labour market where the security industry will have to compete with other sectors such as retail, facilities management, bars, catering, hospitality and hotels, to name a few for the smaller pool of low skilled workers. If we assume that demand for private security stays the same – after all, it is largely described as a recession resistant industry – private security companies could find the market to secure staff much more competitive post Brexit. Students of economics will know increased demand and reduced supply lead to higher prices, so Brexit could lead to higher wages and increased security costs. It is also likely to further enhance the move to technology based solutions which reduce the need for labour – an issue already at the forefront of many security companies in mainland Europe where declining birth rates and labour pools are already forcing such thinking.

Perhaps this might also lead to some security companies to seek reductions in regulatory burdens to better cope with the labour market, something a Conservative Government free of the EU, which has always been a reluctant regulator of the private security industry anyway, may be tempted to water down regulation of the private security industry even further. Indeed another common benefit cited is that Brexit will enable the regulatory burden to be lifted upon the UK. There have been a variety of regulations which have come from the EU which have impacted upon the private security sector, which fall into the following categories:

• Working time directive (hours worked and paid holidays)
• Equal pay
• Maternity rights
• TUPE protections
• Health and safety
• Public procurement; and
• Right to information and consultation.

Brexit would enable these ‘burdens’ to be removed and watered down and actually this is one of the ‘positive’ reasons advocated to leave by many. Clearly not all of them would disappear, but many would become viable targets for a Conservative government. Combined with possible weaker regulation we could therefore see the return of the ‘wild west’ of private security: poorly motivated guards from the bottom of the labour market, guards with no or very little training, criminal infiltration, guards regularly working excessive hours to name some and all this will have consequences upon the security of our society – making it poorer. Would their removal really be a benefit to the UK private security sector and to society as a whole?

The final implication for the industry will be Scotland. It would seem highly likely that if the UK voted to leave and Scotland didn’t that this would trigger another referendum which supporters of independence would be much more likely to win. The implications of rUK outside the EU and Scotland in, with a strongly regulated private security sector with a continuing strong framework of European led employment rights and regulations north of the border and a weakly regulated with less and different employment regulations, south; would be huge.

The best example of a political and economic union in the world would be broken with barriers for Scots working in England, English in Scotland; companies operating North and South; and what would happen on any security task that involved a security operative crossing the border? Let’s not go there and leave that for another article should it transpire!

This article has only touched upon the manned guarding sector and there are many other parts of the industry where the implications will be different. Brexit of any kind will therefore have significant implications for the private security industry and depending upon future arrangements could lead to a much more regulated sector to a much less. The status quo doesn’t seem that bad after all!


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