Brexit negotiations must safeguard manufacturing industry

Brexit must have a measured and considered approach if the government wants to avoid lasting damage to UK manufacturing and the wider economy, a report has stated.

The report, from manufacturers’ organisation EEF, and global law firm Squire Patton Boggs has highlighted the priorities for the manufacturing industry, in regards to upcoming Brexit negotiations.

It indicates that just 5% of UK adults think that loss or damage to the manufacturing sector is worth paying for leaving the EU. This is comparable to the 82% of manufacturers who think that it doesn’t make sense for Britain to cut itself off from its major market, the European Single Market.

Unrestricted access to the European Single Market is identified as a major importance for firms and manufacturers, who say that imposing tariffs from the single market would have a negative impact on business.  

Parallel to this is the need to address the uncertainty surround the Customs Union. The report insists that manufacturers should be able to both freely trade with the EU and pursue international trade deals with countries outside the Union.

With control over immigration and sovereignty of decision making being key drivers towards leaving the EU, the government is tasked with finding a way to give manufacturers potential access to the single market and to be able to employ and deploy staff from and across the EU, the report states.

Manufacturers consistently struggle to find skilled workers and the report says that the government should seek an alternative to the current rules of freedom of movement, that doesn’t compromise manufactures’ abilities to hire easily.

A key feature regards the UK negotiating a bespoke deal, which addresses the country’s specific needs and is removed from existing off-the-shelf models that Norway and Switzerland have access to.

The UK’s exit from the EU could potentially lead to opportunity for the manufacturing industry, if carefully negotiated. According to the report the sector’s horizon is broad, with the US, China, India and Canada topping the trade wishlist.

 Terry Scuoler, chief executive officer of EEF, said: “Rushing through a clumsy Brexit is not in the interests of our sector or the wider UK economy. The Prime Minister is right to hold her nerve and to allow adequate time for the UK’s negotiation strategy to be developed in close consultation with business to ensure the UK’s long-term economic interests are not harmed.

“Manufacturers see great opportunity for jobs, growth and wealth generation from the expansion of global trade outside of the EU. These ambitions tally with those of the Government and the voting public, who want to see post-Brexit Britain exporting and manufacturing more, as well as achieving a better balanced economy. At the same time, our report identifies concerns that our sector’s future success and ability to play its full part could be damaged if the UK fails to secure the right deal.

“The negotiations will inevitably require compromise, but manufacturing has a key role to play in the success of post-Brexit Britain. I would urge the Prime Minister to ensure that any new relationship works for our sector. This means maintaining unrestricted access to the single market and ensuring companies have the ability to hire and post employees across the EU – albeit with more controls in place. In the short-term we want Government to provide regulatory and policy certainty, but in the longer-term there is clearly opportunity to pull back from EU regulation where it does not work for the UK.”