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TSA warns of Brexit threat to the ‘hidden economy’

Published 29th December, 2017 by Neil Nixon

TSA warns of Brexit threat to the ‘hidden economy’

The textile services industry, which provides rental and commercial laundry services, is the hidden engine behind many key sectors of our economy. In an independent economic report commissioned by the Textile Services Association (TSA) - the body representing small and industrial-sized laundry firms - the findings show the industry is reliant on labour from the EU.

The TSA is calling on the Government to ensure that during and beyond any Brexit transitional deal, a flexible immigration system is introduced to ensure continued access to labour. This must be coupled with minimal import tariffs for industrial equipment and cleaning chemicals. Members continue to invest record levels in innovation and the automation of their plants, and contribute £1.86 billion to the UK economy. Further, TSA members directly support sectors that contribute £630 billion to the UK economy every year, and as such, the Government must tailor UK policies to support this hidden engine of the UK economy.

The UK’s £1.86 billion textile services industry faces four main economic challenges according to the report:

  • Brexit - the industry’s workforce is made up of 40% non-UK EU nationals who fear an uncertain status for themselves and their family members.
  • Recruitment - the sector directly employs 34,400 people yet TSA’s survey found 62% of laundry firms had unfilled vacancies and 41% found it took longer to fill vacant posts than last year.
  • Downward pressure on prices - the sustained record plunge in sterling since Brexit has pushed up import prices for cleaning products, chemicals and machinery.
  • Rising costs of production - in the second quarter of 2017, costs had increased by a weighted average of 4.05%, more than the 2.6% rate of inflation (CPI).

Dr Philip Wright, chief executive of the TSA, said: “The report proves that textile services are critical for large swathes of the UK economy, including hotels, restaurants, hospitals, high tech manufacturing, and life sciences sectors. Everyone from patients, tourists, factory workers and chefs rely on products processed by TSA member firms without realising, yet their absence would cause monumental disruption. TSA members face a number of economic challenges and call on the Government to make the right choices during Brexit negotiations to ensure access to labour and vital machinery and chemicals remain affordable after we leave the European Union.”

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