Is Britain Great again? Future of Polish-British business relationship

In 2010 PBLINK, a professional business network was set up to support entrepreneurs accessing the massive wave of business opportunities in the UK. There were hardly any risks to setting up here, especially for micro business owners: English language, access to the Polish diaspora and a £9.90 flight ticket to London Luton. Setting up a business was made easy, with many Polish accountancy firms and other agents already established. Soon after, the cloud-based virtual office became possible, so no travel was required, and a London address became the marketing engine for many Polish business owners. Along with hundreds of thousands of Polish workers settling well in the UK, Polish business owners made the most out of the opportunity.  And the early arrivals laid the foundations for those to follow.

A refreshingly positive cultural stereotype of reliable, honest value-for-money workers grew around Polish construction professionals. UK homeowners clamoured for Polish builders, plumbers, and carpenters to build their extensions or fix their pipes. This reputation then spread laterally into other professions – Brits perceive Polish professionals such as IFAs, accountants, solicitors and estate agents often as a better investment than their home-grown equivalents.

Polish professionals had their business networks and quickly integrated into the fabric of the UK business community. Polish shops, restaurants and Saturday schools sprang up, and moribund Polish social clubs sprang back into life.

Problems

The Poles were building lives in the UK, and British people could not imagine a time without them. But then came problems.

Credit Crunch

2007/8 was the year when the first seeds of disruption were planted in the shape of the credit crunch. It was a time of stricter rules for borrowing, and many banks started struggling financially.

Between September 2007 and December 2009, the UK Government injected £137 billion of public money into the banking sector, dubbed “too big to fail.” Recipients of government bailouts included RBS (now NatWest), Lloyds Banking Group (LBG), Bradford & Bingley, as well as Northern Rock.

Nevertheless, the credit crunch was hardly noticed in Poland, whose economy sailed on, seemingly oblivious to the economic crisis crippling countries worldwide.

At that time, the crisis did not significantly affect the relationships between Poland and the UK.

Brexit

2016 is the date that the real disruption in relationships between British Poles and their UK hosts began: with the results of the Brexit referendum. It was a shock to most of our members. Some, who had been living in the UK for a long time, were either undecided or pro-Brexit supporters. The results came in during our event in London, and I still remember the questions for many about the future. Someone asked the question: Do they not want us? We employ hundreds of people, paying taxes. Soon after the result, construction business owners in our network started asking questions about building materials, custom duties and worker access. How can we complete projects with restricted access to the Polish market?

 The 4 years between Brexit and the pandemic were time wasted regarding British-Polish trade relationships. UK and Polish businesses waited for a UK-EU agreement and put all major investments on hold. Nobody could answer the question:

• how would the visa scheme work?
• what about customs duties and taxes?

Trade continued as before the referendum results, but it was a time of ambiguity that robbed vigour and purpose from the business.

Some businesses did adapt well to the disruption of Brexit. One of our members, a manufacturer of modular homes, said that they had prepared for Brexit far in advance, and the costs of it were covered because of changes in the exchange rate. After 2016 GBP to PLN was, on average, 4.50-4.80 and stabilised over time to 5.20-5.50.

The stronger pound helped to sustain the growth of Polish imports to the UK.

The disruption of Brexit affected the UK political landscape, too. Theresa May’s government was perceived by her own Conservative party and many others as incapable of delivering Brexit. Her approach of having her cake and eating it would not wash with the EU. Meanwhile, Polish entrepreneurs perceived The Prime Minister as maintaining them in a state of uncertainty, someone who could not make decisions and settle what the nature of the relationship between the EU and Poland would be. It was 4 long years for Polish entrepreneurs.

 Boris Johnson’s government came along and did deliver Brexit, but in a very disruptive, some might say bizarre format: British pork sausages not available on the shelves in Northern Ireland; custom checks at British borders; Polish drivers' lorries stuck at Dover and Calais over Christmas. Then, signs of a pandemic in Asia put further pressure on business relationships between Poland and the UK. 

Covid-19

Unlike Brexit, the pandemic meant disruption for everyone. Travel restrictions on top of Brexit rules made it difficult to trade internationally. Polish businesses settled in the UK accessed government support, mainly Bounce Back loans and assistance for highly affected industries such as hospitality. Many of our members in construction, however, thrived. One of our members, a roofing company roofer with over 20 employees, said: “2020 was the best year ever in my 15-year career in the UK”. The pandemic made UK businesses more open to collaborating online via Zooms and Teams, which was great for Polish Tech firms. Suddenly, they could do the work from the comfort of their homes. But the opportunities of remote working came with threats, too. Suddenly, the marketplace of digital society exposed us to global competition. The only braking factor was time zones, but IT support businesses based in India long ago adjusted to 24h working patterns.

At PBLINK we also played our part in the course of the lockdowns by launching a series of webinars supporting Polish Entrepreneurs in the UK. Our max number of in-person attendees before 2020 was 180. We were able to reach more entrepreneurs by shifting to online events. 495 delegates showed up at the Brexit-related event co-organised with the Polish Embassy, PAIH and British Polish Chamber of Commerce. 

Ukraine

The final disruption that affected all of us was the War in Ukraine.

NATO-member governments, particularly Great Britain, contribute billions of dollars in military and humanitarian aid to Ukraine.

Supplies of oil and gas from Russia have been severely disrupted, with EU States scrambling to find new suppliers to enforce a boycott of Russian goods. Together, this has pushed up the global wholesale price of energy, causing a knock-on effect on prices across the board and sudden, high inflation at a rate not seen in the UK since 1992. The Consumer Prices Index, including owner occupiers' housing costs (CPIH), sits at 14.8% as of September 2022.

Like the pandemic, it affects us all and has led to a cost-of-living crisis. Buying power for all of us, including UK customers, is severely curtailed.

What is the future of Polish-British relationships? 

Let’s review the five pillars of British-Polish business relationships that will be worth watching as we move forward into our uncertain future.

1.  Leadership Challenge

Times of disruption require tough leaders to make difficult decisions. Countries are sitting on massive debts. That means hefty taxes and less public spending. Because there are so many challenges, people are confused about what sort of leaders in politics they want. A public debate on this subject, both in Poland and the UK, is required.

2.  Access to labour

In a webinar poll organised by PBLINK, more than 50% of delegates said access to labour is one of the biggest challenges and roadblocks to investing in the UK. They also need to know if they can travel and meet clients, employ people, and develop their businesses. A major challenge is with demanding visa requirements now and uncertainty over future rules.

Kate Bogusławska, the partner at Carter Lemon Camerons solicitors, gives her opinion relating to the staffing crisis post-Brexit:

 “Employers and businesses are reporting difficulties in recruitment. Construction, manufacturing and hospitality in particular, struggle due to shortages compounded by lack of applications from EU nationals. Whilst the Post-Brexit immigration policies streamlined the Sponsor Licence applications as well as applications for Skilled Worker visas, the recruitment of overseas workers is hindered by the salary and English language requirements.

 3.  Customs

Would exporting to the UK still be profitable? How much would customs and other taxes affect the profit margin? Would that be enough to motivate teams to focus on the UK market? Many EU businesses left the UK, but demand for goods and services still exists. This creates the opportunity to get your product or service to the UK market and fill that gap. And there are companies ready and waiting here to guide you through export logistics to the UK.

Piotr Kubalka, Head of J.Dauman Group, said:

“Brexit caused huge turbulence on the British market: at the same time, the supply of both labor and products was limited. This was due to the fear caused by the unclear regulatory situation and the unpredictability of regulations, which translated into the withdrawal of many entities from the UK market - or limiting their operations. Contrary to myths, Britain remained one of the most open economies after Brexit, we will find many business partners here. And here lies an opportunity for Polish entrepreneurs: the world's economy urgently needs to fill the gaps in supply chains. We see this opportunity in the change in the value of Polish exports to the UK by approx. +5% year on year. but soon this increase may become even greater. Every day we connect new Polish brands with potential partners in Great Britain. In my opinion, we are dealing with a breakthrough moment among Polish companies that are convinced that operating on international markets, in the UK, can be at least as simple and profitable as on the Polish market. Hence the growing openness to contact between British and Polish entrepreneurs. To be successful, you need to understand the changes in the expectations of the British, who after Brexit evaluate the partner's offer in the context of guaranteeing continuity of supplies, local fulfilment, customer service, etc. As the J. Dauman Group, we see a constantly growing interest in our warehousing services, accounting in the British system or customs clearance.” 

4.  Sustainability 

More and more businesses are aware of sustainability issues in the UK. Over the next few years, the subject of climate change and a carbon-neutral economy will drive growth across the globe.

In fact, climate change is the new disruptor. It is going to shake up businesses over the next decade. Climate-change levy taxes could be introduced, customer behaviour will change, and products and services must adapt to win more sustainability-savvy UK customers.

 An easy win in the race to be more environmentally friendly is increasing the pace of moving business online. The pandemic showed us how much was possible without travel or maintaining an energy-hungry office building. Since then, face-to-face meetings have crept back into vogue, and employers are recalling staff who were working from home.

 Carbon-neutral businesses will look more like businesses in the pandemic era.

5.  Digital Culture

The new workforce generation attended school online during lockdowns and was born digital. They raise questions about the nature of business going forward. How should we behave online? What communication platforms should we use? How is Polish digital culture different from the UK, and how do we adapt? Who should adopt?

Digital culture is new for the rest of us, but there’s no going back. We are all in a digital workspace with incredible potential to expand our business network connections. The world is the limit until Elon Musk establishes populations on Mars.

But for now, by recognising its challenges and opportunities, we can use it to build and sustain relationships between Polish and British Entrepreneurs.

One cultural difference between Poland and UK throws up an interesting conundrum. In the UK, much business is conducted by relationships, not transactionships. Will these valuable professional relationships endure? In the digital age, it is both easier and more difficult to nurture professional relationships with customers, colleagues and associates.

Lack of in-person interaction can diminish the human touch from transactions, eroding essential assets such as customer loyalty. But we can reach out to people across the globe: the barriers like time zones and cultural differences are easily overcome. We have never had the potential like we have now to build global networks of trusted associates and a worldwide market. 

Polish-British Business Leaders  

Andrew Samu, Editor at Disruption Banking and Digital StartUp Ltd, keeps a close eye on Banking.

Technology across the world and has a special interest in the burgeoning Polish The fintech market in Poland and the UK. He sees a lot of potential in the relationship between UK and Polsih business leaders, based on a history of cooperation and alliance. Poland and the UK are natural partners. He said:

“Polish entrepreneurs are welcome in the UK. A country that has been a hub for diversity for many years now. And often this is the distinction that I see. Poland may well be a very inclusive country, but is it able to push the diversity agenda as well as the United Kingdom? Probably not.

Priorities in the United Kingdom today are based on Diversity, Inclusion and Equality. Levelling Up is another important topic that is often discussed by business leaders here. However, it is worth considering a few points here.

How often do you hear of internationally renowned Polish entrepreneurs? Sure, if you are Polish, you may have heard of Rafal Brzoska, maybe even Marta Krupinska or Dr. Irena Eris. But if you are not Polish you will not have heard of these people. Whereas if you look at British entrepreneurs most of them like Richard Branson or James Dyson are well known across the world. Others, including members of the royal family,have their own global reach.

The priorities, trends and personalities that affect both Polish and British culture can be very diverse.

However, to find a common ground, it’s useful to return to the Polish fighter pilots who helped the Royal Air Force face the Luftwaffe. To the time in late 1988 when Margaret Thatcher visited Lech Walesa in Gdansk. The first Western leader to go to the shipyard. The dulcet tones of Chopin being played on a grand piano in one of London’s oldest Polish clubs – Ognisko.

This is how I saw Polish and British business relationships start as we know them today. A common solidarity that the free people of Britain felt with the young democracy on the eastern borders of Europe. A solidarity that appeals to British society. A solidarity that many Poles embody.

In the initial excitement of becoming a democracy, Poland’s business leaders were faced with myriad challenges. Not least of these was which Western capitalist model to follow. It was easy to look at London and the United Kingdom for inspiration. This was underscored when in 2004 Poland was welcomed into the European Union as an accession state.

The tens of thousands of Poles who turned up in Hammersmith within weeks of joining the European Union was a statement. Today’s Polish diaspora in the United Kingdom is the second largest in the world, after only the United States.

This has affected the way the two countries' business leaders interact. With British ex-patriate business leaders being appointed to run companies like Provident, HSBC, Japanese Tobacco, or Link4 (now PZU). Poland has seen many of its entrepreneurs and business leaders look to the United Kingdom where organizations like the Polish City Club or Polish Professionals in London offered opportunities for them to meet.

At its heart both cultures have a strong sense of ‘class’ and ‘internationalism’. Be that through some of the challenges that they have faced together or because of the way that tradition and their international heritage is extolled in both cultures. In the search for the ultimate in Polish British business relationships though, there are a few key things to consider.

Both British and Polish business leaders share a deep respect for each other. Where the Polish are brilliantly equipped to negotiate with their European counterparts, the British and their stiff upper lip continue to bring a quintessential internationalism to everything they do. Both Poles and British are used to travelling. To challenging themselves by experiencing new destinations and getting out of their comfort zone. Pioneering as the Americans would call it.

Today’s Polish business leaders,much like their British counterparts, are international business people. They look to Singapore, San Francisco and other innovation hubs. And ultimately, this international global approach to business is what differentiates the Polish and British business leader and how they form their relationships with one another.”

That is very encouraging news.

What about the political landscape?

Various futures could play out, including some positive possibilities there, too.

Brexit Britain Under Rishi Sunak

Any hopes that Britain’s latest Prime Minister might take a fresh look at Brexit and seek to ameliorate relations with the EU have been proven unfounded.

It was reported that his senior ministers had urged him to forge closer ties with the EU, or even seek a Swiss-style agreement. However, he was unambiguous in his speech at the G20 Summit, that Brexit was not to blame for Britain’s woes. Everything was Putin’s fault for making fuel more expensive, which fuelled massive inflation. Also, it was because of Covid. But not Brexit.

Indeed, the British media rarely blames Brexit for any disruption, instead finding the same scapegoats as PM Sunak. This is all very confusing for UK citizens.

A few days later, the PM doubled down. In a speech to the Confederation of British Industry (CBI) annual conference in Birmingham, he said:

“I voted for Brexit, I believe in Brexit, and I know that Brexit can deliver, and is already delivering, enormous benefits and opportunities for the country.” He went on to promise that the UK “will not pursue any relationship with Europe that relies on alignment with EU laws” on his watch.

However, the next general election must be held no later than Jan 2025 and could happen sooner.

Could the situation change with a new government?

Impact of a Labour Government.

It looks possible that the next UK government could be Labour under Sir Keir Starmer.

Would Sir Starmer approach the relationship with the EU or Poland differently?

According to the New Statesman of Oct 11^th this year, ‘Most Labour voters want Keir Starmer to reverse Brexit’. However, the headline in The Independent, 13 days later, was categorical: ‘Keir Starmer says Labour won’t reverse Brexit: ‘It’s a straight no from me’’

It looks like we are stuck with Brexit, and we should look to make the best out of the situation rather than indulge in any wishful thinking.

However, in his 5-point plan to Make Brexit Work, Sir Starmer repeatedly emphasises his intention to tear down the barriers to trade between the UK and the EU, citing specifically veterinary, phytosanitary and agri-product regulations that restrict import/export of animals, foods, and plants.  He also stresses that he wants to investigate new flexible labour mobility arrangements for those making short-term work trips to and from the UK and for musicians and artists seeking short-term visas to tour within the EU.

 Of special interest to tech companies, he pledges that Labour will “maintain Britain’s data adequacy status, meaning our data protection rules are deemed equivalent to those in the EU, enabling UK digital services companies to compete.”

This is good news for the growing number of Polish tech (especially fintech and medtech) companies setting up base in London.

Polish Tech Firms setting up in London

The UK, in particular London, has long been one of the areas offering crucial support to fintech startups. The UK’s established banking system, with long traditions, provides the perfect base for younger, more technologically advanced Polish financial institutions to grow.

And the UK is a growing market where there is a need for services not offered by traditional British banks. Compare this to Poland, which is a saturated market, as the younger banks there is mostly fintech.

On 29 April this year, The Polish Investment and Trade Agency (PAIH) and the FinTech Poland Foundation signed a Cooperation Agreement. This agreement gives PAIH access to The Polish fintech map, in Poland, the UK and elsewhere.

Examples of Polish Fintech companies making a success of business in the UK (and elsewhere around the world) include Valuto, (trading as Waluta in Poland), part of Currency One; Finanteq; Atsora, who created Momentum, which helps SMEs move into Web3; and watch this space for many more up and coming Polish fintech challengers.

What Does the Future Hold for British Poles?

So, what now?

Should Polish businesses in the UK wait it out, go into survival mode: reduce staff, limit spending, cut costs? 

Hopefully, the majority will see through the challenges and, just like Jon Snow in Game of Thrones, search for collaborations and partners to face the coming few years of real crisis together.

 Smart business owners will take the long view, and instead of focusing on the challenging conditions of this and next year, they will search for opportunities that will push them to the front of innovation.

 Can you count?

Count on yourself. Governments worldwide have provided billions in support to businesses and individuals through Covid lockdowns, now the energy crisis, the war in Ukraine and probably soon the pensions drama.

Don’t count on that support continuing forever. Do count on your own team and creativity. 

 According to Michael Dembiński, chief adviser at the British-Polish Chamber of Commerce, this is a golden age of opportunity for British Poles.

He cites the resilience of Polish entrepreneurs to overcome obstacles, quoting the Polish saying: “If you close the door to us, we’ll come in through the window!” Michael references the early days of Brexit, after the transition period. Exports from the UK to Poland fell significantly, while imports from Poland remained almost steady.

He attributes this partly to the decision by the UK to postpone the implementation of customs restrictions on goods inbound from Poland, especially foodstuffs, and partly due to the Polish familiarity with complex bureaucracy, from pre-EU days.

Scotland – the Land of Opportunity?

Scotland, meanwhile, despite the recent UK Supreme Court ruling, is openly planning a vote on independence from the UK. The biggest political party in Scotland by far, the SNP, is committed to taking an independent Scotland back into the EU. While the UK as a whole voted narrowly (52%) for Brexit, Scotland voted decisively (62%) to remain.

By contrast with the EU’s attitude towards the Catalonian vote on independence from Spain, it is widely expected within the SNP that Europe would welcome Scotland back into the fold with open arms.

What would this mean for Poles in England, Wales or Northern Ireland? By contrast with the UK government’s ‘hostile environment’ policy for migrants, refugees and asylum seekers, the Scottish Government has consistently promoted the message to its inhabitants that Scotland is an ageing country and desperately needs immigration.

It is certain that EU nationals living in Brexit Britain would be gratefully received in an independent Scotland, once again an EU member State.

Could that then prompt what remained of the UK to reconsider re-joining the EU?

It’s all speculation, but it’s also all entirely possible.

Soft Power

Great Britain lost a lot of prestige on the global stage with the debacle of Brexit.

Newspapers across the world reported the decision to leave the EU with incredulity: why would they want to give up something so beneficial voluntarily?

European press reported Theresa May’s negotiation skills with EU heads of state as confusing. Boris Johnson followed May as Prime Minister, and a photograph of him being snubbed by heads of state at a NATO summit in March 2022 went global.

The UK had gone from a global superpower to a laughing stock and was now a pariah state.

The country’s image was not helped when Boris Johnson, plagued by scandal, was forced to resign from being replaced by Liz Truss, who lasted just seven weeks before she was obliged to stand down due to perceived incompetence and disastrous economic policies.

Soft power depends on a country’s national reputation, and Britain’s was almost exhausted.

Perhaps the UK would have been finished on the international stage were it not for its unequivocal support for Ukraine in the face of the Russian invasion. Fine words from the British government were backed up with £2.3 billion in military assistance and a hard line of economic sanctions against Russian corporations and individuals. Volodymyr Zelenksy repeatedly held up the UK as the model of a good ally, comparing other countries, notably Germany, as falling short of Britain’s standard. Suddenly, the UK had a redeeming feature.

Maybe this upturn is the beginning of a long-term trend, and Britain will once again become the land of opportunity.

Britain may not be so great as she once was, but perhaps she could become so again.

With the help of Polish people here and at home, of course.