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BESA Brexit panel unites over fears of “no deal” HVAC disruption

VP of Mitsubishi Electric VP in the UK and Ireland argues that failure to reach a deal between the UK and EU could be “single worst thing” to happen to one of country’s largest HVAC suppliers amidst wider concerns about potential industry disruption

A “no deal” Brexit that fails to establish clear rules for hiring skilled foreign nationals, importing components and some regulatory alignment between the EU and UK would be a disaster for the UK HVAC industry that must be avoided, a panel of political and influential industry figures has warned.

The claims were made during a Brexit panel as part of the BESA 2018 National Conference that was held in London on November 1. The panel sought to consider the likely impacts on industry as uncertainty continues as to the terms of Britain’s exit from the EU and a planned two-year transition agreement intended to commence in March 2019.

The panel of industry insiders, who all admitted to backing remain during the 2016 referendum, reached consensus that the UK’s exit was inevitable. However, they argued there was significant concern on the panel concerning the eventual terms of this exit and if a deal could be reached.

Deane Flint, vice president of Mitsubishi Electric Europe’s UK and Ireland operations, said the very notion of freedom of movement of goods and services to and from Ireland and the UK was under threat with significant ramifications for the company on multiple fronts.

He said, “Ironically enough, all of the products that go into Ireland come out of the UK for Mitsubishi Electric. Am I going to be able to get them in and what terms am I going to get them in on?”

“So coming out without a deal would probably be the single worst thing that could happen to one of the largest suppliers to the HVAC industry.”

Mr Flint responded that he personally did not assume that politicians would reach a deal, despite concerns raised by industry bodies over ongoing uncertainty and the impact on business.

Labour MP Caroline Flint, a former minister of state for Europe between 2008 and 2009, said she did expect a deal to be reached, but added that current protracted discussions between the UK and EU governments were only on the “terms of a divorce” and not a final deal.

She said this would focus on topics such as outstanding payments owed to the EU from outstanding financial obligations, the status of EU nationals remaining in the UK and vice versa, as well as setting out frameworks for more detailed agreements over the next two years as the country transitions out.

Ms Flint added, “We need that deal, so come March 29 at 11:00am, we do not crash out, and suddenly have the worries and chaos that might happen.”

“If there is a deal, come March 29 we will leave the EU, but actually a lot of things concerning borders and patrols won’t change at all and that is important.”

Sarah McMonagle, external affairs director at the Federation of Master Builders, said she too was strongly against the concept of moving forward with Brexit without reaching an agreement with the EU on key questions around workforce and border policy.

She added, “Aside from the practical elements [of a no deal], I think it would be really bad for consumer confidence and our members are very reliant on homeowners wanting to commission refurbishment projects and I don’t see that happening if we crash out without a deal.”

McMonagle argued that the organisation’s members were already reporting a slowdown in workload, with banks also getting nervous on supplying funding for construction work.

She said, “I think that it is all starting to tip without being too negative and no deal would possibly burst the confidence bubble that would be disastrous for the economy.”

Mark Glover, an influential political lobbyist and chief executive of communications body Newington, said that a failure to reach agreement with the EU created dangerous uncertainty for any organisation importing or exporting from the UK into the EU. Mr Glover added that needed industry had significant questions to ask about any abrupt termination of existing agreements in place as part of EU membership.

He said, “What rules are you going to be operating under? Have you looked at the World Trade Organisation rules, they are very very basic. Are we going to be flooded by poor quality materials that will undercut us from other countries?”

Concerns raised by the panel have matched similar warnings issued by the Euris advisory body, which represents thousands of companies and brings together manufacturing and mechanical engineering bodies such as BEAMA and FETA.

The network of organisations has continued to call throughout this year for government to commit to avoiding a no deal Brexit that risks major disruption to existing customs arrangements.

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