Manufacturing needs certainty now

Published:  19 December, 2018

For manufacturers the publishing of the Government’s withdrawal agreement should in theory have come as some kind of welcome relief, but as things stand, we are still no nearer to knowing our future direction than we were a few weeks ago.

But ultimately is Theresa May’s Withdrawal Agreement good for manufacturing? If you take away personal opinions and simply judge the Agreement on its merits for manufacturers, the conclusion as to whether it is good (or as good as we can get), begins to become apparent.

Analysis of the document shows it provides greater certainty for manufacturers to move forward and ultimately avoids a potentially disastrous no-deal exit, which I don’t believe manufacturers would welcome.

The EEF, which led the business case for manufacturers as the UK prepares to leave the EU, believes the agreement will enable manufacturers to plan for the future with a far greater degree of certainty. But for manufacturers how does the agreement hold up after analysis? Four key outcomes have emerged which Industry needs from any transition period and final negotiations to make Brexit work:

1. Manufacturers asked for a properly planned implementation period for leaving the EU which delivered sufficient time to allow for trade negotiations to conclude.

The Withdrawal Agreement allows for a period of transition which is potentially extendable and likely to be sufficient time to conclude the UK’s final trading arrangements with the EU.

2. Manufacturers asked for frictionless trade by ensuring no tariffs on the import of goods and protecting just in time delivery logistics as part of an integrated supply chain.

Frictionless trade and protection of the supply chain is prioritised and delivered through the Withdrawal Agreement.

3. Manufacturers needed the ability for EU workers to move into and out of the UK, ensuring British companies can fill vacancies where they have skills gaps and send workers to the EU for service contracts and other commercial opportunities.

This is delivered as the reality is that during the implementation period businesses will still be able to move workers in and out of the UK and manufacturers will still have access to the EU talent pool.

4. Manufacturers asked for a firm commitment to maintain mutually recognised, close regulatory alignment with the EU, supported by a system of arbitration and standard setting to ensure that British firms can produce goods that can easily be traded across Europe with clear protections in place.

With the transition period in place as part of the Withdrawal Agreement, the UK will continue to comply with EU law and manufacturers will only face one set of legal changes at the end of this period.

So looking at the Agreement from a manufacturing perspective, it provides a greater degree of clarity than we have recently been used to, and avoids a no-deal scenario, the prospect of which, after having spoken to numerous business leaders across all manufacturing sectors, I believe would be a disaster for manufacturing.

As industry has already commented, manufacturers are currently staring down the barrel of substantial uncertainty with activity slowing significantly and investment being cut back. The country’s politicians urgently need to focus on leaving the EU with a sensible and pragmatic deal. We can therefore only hope that MPs judge the merits of Theresa May’s Agreement on the realities our economy will be facing if it is rejected and not simply on personal ideologies and hopes of what both Remainers and Brexiteers would have liked.

UK manufacturing needs certainty and it needs it now!