Brexit distraction

Published:  11 December, 2015

I have spoken to numerous manufacturers and business leaders over the past year, and the mood, despite the challenging global economy, is relatively positive that the UK manufacturing sector can contribute to the UK’s economic growth in 2016, but with one proviso, that the UK votes to remain in the EU. There are very real growing concerns highlighted by almost every SME and blue-chip business I’ve spoken to, that the extreme uncertainty posed by the possibility of a Brexit may start to impact on their businesses, with potentially disastrous consequences both for the manufacturing sector and the overall UK economy.

Of the numerous discussions I’ve had on the subject, many of which have been very articulate, passionate and informed on both sides of the argument, (and others that are probably best not to describe out of decency) there is still a very significant void in understanding the full extent of what a Brexit means. Indeed I have heard so many people using the term Brexit, that the word and subject itself have become almost a cliché discussion. Unfortunately like all clichés we begin to become weary of hearing about it and it follows that there is then a real danger of falling into a trap of complacency, with the inevitable consequence that we may continue along a path that in hindsight we may have wanted to avoid. Like the Scottish referendum, if the UK leaves the EU, it leaves it for good - there will be no turning back.

Therefore I don’t apologise for raising the issue again as the year draws to a close, it is in my opinion, arguably the biggest controllable economic threat this country has faced in its recent history.

I accept that the EU is need of dire reform, this is almost now a given. The institutions do not function as they ought to, and having spoken to German, French, Swedish, Dutch, Danish and many other European manufacturers throughout the year, it is clear they desire reform as much as we do. But we can only change from within.

One industry body used a potential scenario to explain simplistically to me that if the UK wasn’t present at various EU Standard meetings and using its influence to countenance German and French demands then UK manufacturers would simply have to meet those Standards, irrespective of the cost and other implications to the UK. If we wanted to continue exporting to the EU we would have to comply – if you’re not in the club you have no influence to direct it. Norway and Switzerland are examples of this.

I recently read an online article in Politico, that rather wryly commented about Brexit: “What are the Brits going to do, after all? Join NAFTA? Rev the Commonwealth back up? London’s mayor Boris Johnson suggested an economic alliance with Switzerland, to be called Britzerland. Or perhaps they’ll try Great Borway, a union with Norway.” One thing is for sure, the UK will need to continue to trade with the EU, irrespective of whether we vote to leave, but our ability to influence the agenda, rules and standards that affect all UK manufacturers, will be limited. The arguments therefore clearly go far beyond restricting welfare payments and the Government knows this all too well. It is obvious from those I have spoken to that it is as concerned with the potential fallout of a Brexit as most manufacturers are. It simply doesn’t want a Brexit – reform yes, exit no! Both our global influence and equally our continued economic growth and attractiveness is still very much interlinked at this time with the EU – leaving would present too many unnecessary uncertainties, and does not make political or economic sense.

It is also worth noting that many EU countries do not want to see the UK leave, Germany especially doesn’t, but its support of the UK is finite as the German commitment to Europe is greater than to a single nation, its history has dictated this direction. Equally our history dictates we should play our role alongside at the heart of a reformed EU, not on the sidelines. It would be sad to hear the words: “Dear Brits, we want you to stay. But go if you must.” Where exactly would that leave British industry? Would productivity increase? British exports rise? Investment rocket?

I sincerely hope 2016 is the year we can put behind this distraction and move on to the real issues industry needs to confront to compete with increasing global competition.

On behalf of the PWE team may I wish all our readers and advertisers a very happy Christmas and a prosperous and healthy new year.

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