Manufacturing must remain UK economic engine

WHILE the vote for Brexit was a personal choice, businesses will have to live with the consequences for a long time to come.

With the Government pinning so much on its devolution policies ahead of the referendum, the impact of today’s result on strategies such as the Midlands Engine is likely to be significant.

However, now more than ever, the importance of having a powerful manufacturing industry is critical to the future of Britain’s economic fortunes as the UK stands alone in the world.

Ahead of the referendum, many big businesses had spoken about the likely impact to the economy should the country vote to leave the EU.

Many of these were manufacturers, an industry which provides so much added value to the UK economy, will now have to reassess supply strategies and future investment plans.

Late last year, Jaguar Land Rover – one of those backing Remain – signed a Memorandum of Understanding with Slovakia on plans for a new factory.

What will happen to that plan now is unclear, although a more global model with investments in China, India, Latin America and the Middle East may now be adopted.

But by means everyone in the industry was in favour of staying in the Single Market.

Lord Bamford, head of Staffordshire excavator manufacturer JCB was one of the leading advocates for Brexit, claiming free trade agreements were in the best interests of Britain.

His own company has agreements in place in countries around the world – as well as Europe – and its approach may be the one adopted in future.

Speaking for the supply chain, Rowan Crozier, CEO of Birmingham-based Brandauer, said: “It’s a disappointing result that will now accentuate a period of political and economic instability.

“The dreaded ‘uncertainty’ is here to stay and will be something else that UK manufacturers have to overcome if we are going to continue to execute our growth plans. Nothing will change quickly and it could be some time until we start to see the true effects of leaving the EU.”

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: “The British public has chosen a new future out of Europe. Government must now maintain economic stability and secure a deal with the EU which safeguards UK automotive interests.

“This includes securing tariff-free access to European and other global markets, ensuring we can recruit talent from the EU and the rest of the world and making the UK the most competitive place in Europe for automotive investment.”

 Terry Scuoler, CEO of EEF, the manufacturers’ organisation, said while it was not the result many businesses wanted, the country had to live with the consequences.

“The Government must move very quickly to stabilise the economy, reassure the markets and shore-up business confidence,” he said.

“The process of leaving the Union will take some time, and the Government should not rush to instigate Article 50 and the formal exit process, while there is so much uncertainty. Ministers must think carefully about our negotiating position while setting out a clear roadmap for establishing a new deal with the EU which remains our biggest market and trading partner.”
 
He said what was needed now was a “clear vision” for a new relationship between the UK and the EU, that at the same time did not throw the baby out with the bath water.

“In the complex task of unpicking the UK from EU regulation and legislation, the Government must tread carefully, keeping if we can a trading relationship with the single market, avoiding dramatic overnight changes and not becoming bogged down to the detriment of making long-awaited and much-needed decisions on projects vital to our future economic prosperity,” he added.

“We must also ensure that the skilled workers we need are still encouraged and enabled  to live and work in the UK.”
 
He added that manufacturers had a series of priorities for any forthcoming negotiation, including:
o   Securing access to key markets for goods and services
o   Ensuring regulatory certainty
o   Addressing the UK skills gap
o   Domestic policy focused on shoring up investment.