WEST YORKSHIRE: Brexit causing region's businesses to '˜stockpile ingredients'

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Uncertainty around Brexit is causing businesses in the region to stockpile supplies and ingredients, a report by regional super-council West Yorkshire Combined Authority has warned.

The paper, produced by the authority’s business communications group (BCG), claimed the stockpiling was causing shortages of components and ingredients in certain sectors.

It goes on to claim Brexit could cause skills shortages in industries reliant on migrant labour, such as construction.

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The report also states the lack of detail or clarity on a future deal was preventing other business support groups from giving companies the help they need to prepare for Britain’s exit from the EU.

Its publication comes days after Theresa May lost a parliamentary vote on her proposed Brexit deal. It was then announced a new proposed deal would be presented to the Commons on January 29.

The report stated: “Overall, those BCG members present noted a fall in confidence among their members compared with the previous quarter, which they felt was largely the result of growing Brexit uncertainty.

“The chambers (of commerce) in the region and the Federation of Small Businesses have put in place checklists to help firms consider what issues they may need to address as a result of Brexit, however until the contents of any deal are known, it is not possible to provide focused support.

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“There is evidence of stockpiling in certain key sectors – particularly

manufacturing and chemical/healthcare industries.

“This is leading to shortages of components (notably in the electronics sector) and ingredients, [as well as] increased costs, including increases in commercial warehousing rents as businesses require additional space for stockpiling.”

It added that the recent trend for British businesses to move operations back to the country from abroad – known as reshoring – could be reversed “if access to international markets becomes more complex as a result of Brexit and/or

costs increase.”

It continued: “There is a concern that Brexit could lead to a significant skills gap within the construction sector, in which businesses are already struggling to recruit.

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“A recent report by the CITB suggested that EU migrant labour represents 8 percent of the industry workforce nationally.”

The report will be presented to the combined authority’s Leeds City Region Enterprise Partnership Board on Wednesday, January 23.

Richard Beecham , Local Democracy Reporting Service