Bearing the brunt of Brexit

Peter Rolton   Peter Rolton, chairman of engineering consultancy Rolton Group, urges industry to come together to face the post-Brexit challenges head on.

David Davis certainly has a job on his hands. Responsible for leading the Department for Exiting the European Union, his to-do list is growing by the day. A key challenge for him to tackle is how UK industry can continue to be a major player in the global economy without the support and trade links established via the EU. For the engineering sector in particular, which supports 14.5 million jobs and contributes £455.6 billion to the economy, the UK’s decision to turn our backs on the EU has created a genuine crossroads – and we must be sure to turn together in the right direction.

Among the many complications that arise with such a breakaway, the industry is going to have to come to terms with new regulations and standards if the ones set out by the European Union are no longer going to be adhered to. These standards have been put in place so that the industry as a whole across Europe can continue to grow and improve – without them, there is danger of the UK losing its place among the global elite for innovation and technology and getting left behind by our continental neighbours. In particular, research and development could vastly suffer without EU funding. The UK is a renowned globally as a research powerhouse, home to four of the top 10 universities in the world, which now face the prospect of cuts to grants and public finances.

Universities could face research cuts(Credit: Mike Peel)
Universities could face research cuts(Credit: Mike Peel)

Leaving the EU will also undoubtedly restrict our attractiveness to overseas manufacturers, many of whom have seen setting up operations in the UK as an opportunity to both tap into our rich heritage of engineering excellence and also to open a gateway to business with the rest of Europe. Now that this door is imminently closing, there is little to prevent them moving across the Channel to relocate in mainland Europe in order to continue to receive the benefits they had previously enjoyed in Britain.

Before the EU, certain European countries began to implement legislation and tariffs for the import of goods – such as electronics and cars – but products that were manufactured in the European trading zone were exempt. The reason many global car manufacturers opened plants in the UK is so they could have access to this European market, and our departure leaves little benefit for them continuing to do so. If the likes of Nissan and Honda can be in a better financial and trade position elsewhere, it is inevitable they will leave the UK. Let us hope that the major engineering players follow the example set by GlaxoSmithKline, who have backed up their claim that the country remains “an attractive location” despite Brexit by planning an investment of £275m to expand its UK manufacturing sites.

(Credit:OSX via CC)
Car manufacturers such as Honda may be incentivised to leave the UK (Credit:OSX via CC)

Moreover, following our exit from the union and the restriction of free movement, employers will undoubtedly suffer from an amplification of the skills shortage already prevalent in our industry. The annual shortfall of engineers and technicians has currently increased to 69,000 and this will only worsen once our exit comes to fruition. This will not just affect the low skilled occupations, but will also impact the higher level workforce across many of our biggest employers.

But there is truth in the adage ‘as one door closes, another opens’. Yes, the scale of the post-Brexit challenge should not be underestimated, but the UK now also has a real opportunity to set its own rules and agenda going forwards to restore a competitive balance under its own control.

(Credit: IET)
Standards across industry may need to be reviewed (Credit: IET)

In terms of moving forward, serious discussions need to take place among engineering and energy authorities regarding the re-writing of industry standards to remain competitive. We will need to re-invent the UK for this new economy, implementing a holistic strategy for business and industry to secure the resources we need for future success – energy, skills and inward investment. Despite not being part of the EU, we still remain a significant part of Europe. Therefore, maintaining positive and open relationships with EU member states is critical for the survival of the UK engineering industry and crucially, maintaining our position in the global economy.