It’s time for SMEs to throw open their factory doors and educate MPs about the perils of Brexit before it’s too late writes Paul Murray, MD of UK SME Instrument Design Technology.
It’s over two years since the UK voted to leave the EU. It’s taken until a few days ago for the UK government to come to an agreed UK position for negotiations with the EU.
Simplistic arguments presented by Brexiteers show their lack of understanding
The Brexiteers have shown throughout the campaign and since a complete disregard and total lack of understanding for the manufacturing processes for industrial goods in the modern age.
In the automotive, aerospace and food manufacturing sectors to name but three of many; the requirement for integrated supply chains, just-in-time deliveries and seamless borders across Europe & Ireland are paramount. The cost of production is closely controlled and would be severely impacted by the potential of border delays & tariffs.
Simplistic arguments presented by Brexiteers show their lack of understanding of this process. Similarly, for common product regulations and standards these are set worldwide, and if you wish to sell into any market you have to show compliance – this is true for both large multinationals and SME suppliers.
The impact of the vote has been dramatic with a fall in market sentiment towards the UK
Perhaps Brexiteers would benefit from visits to JLR, BMW-Mini, Toyota etc. plus Airbus to understand the reality? It would be a breath of fresh air to hear informed comment from MPs, and certainly an improvement on the hugely negative recent comments by MPs and Ministers about business.
For our high-technology SME supplying precision instruments to the international science markets, the impact so far of the vote has been dramatic, with a fall in market sentiment towards the UK. Previous excellent working relationships between European partners and the UK supply base have suffered due to the perceived sentiment from the UK together with the huge uncertainty caused by the constraints of Brexit. This also seems to be the case with the Galileo project where UK suppliers are being frozen out of the procurement process.
The ease of doing business on our doorstep with European science laboratories cannot be underestimated- modern travel means short, efficient visits to the continent are possible. A common European culture with English as the language of choice further enhances the process. The ability to easily discuss and agree contract terms with Europeans is another advantage.
Contrast this with Asian markets, for example China, where the process is controlled by government with onerous conditions together with different language and culture. The distances involved mean visits are a full week, with many hours in time zones adding to the communication complexities.
Yes, it’s true China and Asia are huge expanding markets but for an SME this represents a very difficult market to penetrate with many barriers to overcome.
I understand for many other technology-based SMEs having access to the EU Horizon framework has been the cornerstone of their development. What happens to this post-Brexit is still uncertain.
Access to skilled labour for all SMEs is a constant unsolved issue. In particular, apprentice-trained technicians are like gold dust for technology companies. Training your own is the only way since the reduction in supply of EU people coming to the UK only adds to this shortage. Retention of skilled labour is also difficult since the larger companies can offer better conditions than most SMEs and are a big magnet for UK trained technicians.
Our SME exports regularly to the USA, which until very recently has been a very open and friendly market for high technology companies. Current duties are very low, typically 2-3 per cent. It’s difficult to see a large change in US market potential with a new UK-USA FTA. It certainly won’t replace any market loss in the European market caused by Brexit.
As the UK moves towards Brexit on 29th March 2019 it would help immensely if Brexiteer MPs would inform themselves about the issues the UK industrial manufacturing base, including the SME companies, truly face. Improving the quality of debate and moving away from soundbites and negative hits for political purposes on UK business can only help improve confidence in the future.
The spectre of a no-deal Brexit still looms large over UK manufacturing and reversion to WTO rules. This would be disastrous for the UK industrial base from multinationals through to SMEs. The impact on jobs and government finances would be catastrophic, and the UK may never recover from this scenario; educating our MPs and Ministers about integrated supply chains, just-in-time supply & technology-based SME companies is a top priority. This option is more hopeful than the grim reality that Brexiteer MPs are so ideologically wedded to Brexit that they don’t care about the economic consequences as long as they get a Brexit.
Maybe some MPs can still be enlightened by a visit to your factory and a greater understanding of these critical issues? Let’s get the invitations out!
Paul Murray is Managing Director of Instrument Design Technology Ltd, a specialist engineering SME based in Widnes
The whole article written by somebody brainwashed by the EU.
For starters, its time to get rid of our incompetent prime minister Theresa May and have somebody in charge who truly believes in a successful United Kingdom.
We don’t need to be part EU to attract skilled talent, independent countries have been doing this for years. Skilled people can go anywhere where their skills are required.
As for customs arrangement, with today’s technology this could be virtually seamless. People need to remember that we have customs delays at Dover, while even inside the EU when ever the French throw their toys out of the cot.
If I as a director of an SME I could get goods through customs in a 3rd world country with minimal delay 20 years ago when everything was paper based. If this can not be done in the UK, then people ain’t trying hard enough.
Paul No not brainwashed- rather a very concerned engineer for the future of my country.
In our experience recruiting from a local pool of talent is our only practical choice. I cant see the UK government advertising visas available for technicians in my lifetime?
The larger the pool of talent is the greater the chance of finding the right people. Visa restrictions limit the pool of available people.
Paul,
You would be more convincing if you provided some evidence to support your sweeping statements. Paul Murray has described the reality of his business environment. If your seemingly baseless allegation of brainwashing is your first & most important point then your whole argument appears weak, irrational and simplistic. If the current US / EU duties are only 2-3 % then how would Brexit significantly improve the trading environment and how would it compensate for the poorer trading environment with the EU? Further reduction in the value of the pound?
it could therefore be argued that you to are brainwashed by the Brexit ethos!
there was too much hype on both sides of the argument, but, most people only saw the bus with the £350 million lie on it and thought we’ll keep that. neither side behaved well and neither side continue to behave well. Rees-Mogg and Johnson want to be in the power seat, but won’t do anything until after Brexit when they can complain about May’s handling. May doesn’t want Brexit, Corbin does but can’t loose votes. what a total mess. Its no wonder that Mr Murrey is concerned, we all should be.
I would agree with Paul that this is in essence a “Fear Campaign” message. Obviously, businesses need to evaluate and solve the threats of Brexit, but the opportunities also need to be evaluated. I have been involved in export trade both within and outside the EU and both are difficult. However, the issue of language mentioned by Mr. Murray, is part of my reason for supporting Brexit: EU countries have educated elites whose English is excellent and they use this for selling to us, however, when we try to sell to them they “no speaka de English” as a brilliant trade barrier. I have concluded that this is the major reason why our EU trade balance has deteriorated over the last decade; thus, we need agents in their countries while they do not need them. It is far easier to trade with the Anglophone / pro-English world than the EU, especially if we get rid of EU trade restrictions.
Forgive me if I say that your statement ref “no speaka de English” is pure claptrap…….why would they turn down trading opportunities with such a stupid answer?
Jack
We trade with countries in EU plus the ROW. Have to say have not really found the language differences as a barrier within Europe. If you have high quality products then the customers will be interested to buy them. Why put barriers to trade with our nearest and largest market? UK desperately needs a deal with EU. No deal scenario is very damaging to our industrial base- remember the grim reality is that Brexiteer MP’s only are about BREXIT at any cost.
I don’t feel Paul Murray has given us a concrete example of something which might become so much more difficult. I find the supply chain management argument rather weak as my SME manages to get parts into and out of the USA for a specialist treatment there, without too much difficulty and with no tax on the parts themselves, only on the process value. If my tiny business can do that, surely any larger, more competent business can do it, and a big business should be able to get departmental help with it. Unless the remaining EU was actively vindictive about it, there won’t be a big problem.
Jonathan in the event of a ‘no deal’ what happens to the following cost of sale inputs, tariffs, VAT payments on imported goods, border delays? Yesterday the EU issued their no deal reality list- eg. UK companies denied access to EU tenders via OJEC; UK desperately needs a deal however the Brexiteer MP’s only care about BREXIT.
That’s an interesting take on the UK’s trade balance Jack
I thought at the time is was inconceivable to have a referendum on Brexit. A bus going round promising an extra £350 million a week to NHS. I would guess 80% of those that voted had no idea of the consequences, they were Turkeys voting for Christmas. Most people are still un informed.
With no deal the UK will be plunged into a downward spiral !!!
This was exactly the minor ‘scam’ that was used to convict Lord (Gannax mac) Kagan -a Labour PM appointee (think the Lavender List): another political group could not get at Wilson so they hit his friend instead! When politics sloshes around such sewage? as this, rather than the National Interests…small wonder that it (Brexit -a vehicle to shut-up those who would like to ask important questions of HMG) is such a shambles. I despair?
After so many decades of at best not supporting and at worst deliberately attacking ‘our’ manufacturing (because it employs so many ordinary persons who might be persuaded to vote towards the Left: and indeed be members of a Union? its not so much our lack of ‘language skills’ which is the issue, but not having much high-value added items and machinery to sell at all.
Virtually no machine tools, no textile machinery, very limited prime movers (by comparison with others) the list is endless. But what can we Engineers expect from a group run by a grocer’s daughter: and a grouping of numbers and word-manipulators rather that those who can actually create, rather than just manipulate money.
I think its high time these so-called remainers put their shoulders to the flipping wheel and got behind the glorious edifice that is Brexit!
Us true brits don’t care about the minor details, like whether the campaign was illegally funded, or whether senior members of the campaign met multiple times with Russian diplomats, or whether the leave campaign lied about the amount of money that would go to the NHS, or whether leaving the EU would directly lead to hundreds of thousands of job losses, or whether fruit and vegetables would rot in the fields due to a lack of seasonal labour, or whether the collapse in the value of the pound leads to massive increases in the cost of imports, or whether we lose our birthrights to live, study and work where we choose, free from impediment, or whether senior members of the conservative party stand to make millions by carving up the NHS and selling it to US healthcare companies, or whether any version of the Irish border deal would breach the GF agreement, or whether the decision to leave would lead to Scottish independenc and the break up of the UK, or whether adding cost to supply chains would be another nail in the coffin or UK manufacturing, or whether it leaves Europe politically weakened, and the UK an isolated backwater on the fringes of global power…..
NO! the most important thing to us True Brits is that we’ll be able to go back to laughing at Spanish waiters – thats one in the eye for the so-called politically correct mafia!
Brilliant!
At last something to cheer us up while the Brexit nightmare rolls inexorably closer
….got it in a nutshell M.P.
Mickey
A very humorous read and you make your points beautifully
Well put Mickey!
Why has Paul Murray waited for the last 2 years, this kind of drum bashing was required at the beginning and is now playing solely into the hands of the EU.
Note to Mike Blamey, the grocer’s daughter has long gone from the scene and can no longer be blamed (or praised) for her work.
Ken
You are correct- I should have written this two years ago. However I incorrectly & naively thought our MP’s would all act in the national interest when it came to achieving a practical & pragmatic deal with the UK. What a mistake that was. The Brexiteer MP’s only care about BREXIT and would be happy with ‘no deal’ scenario. They told the UK population, ‘this would be easiest trade deal ever’; ‘frictionless trade would continue’;’everything would be the same as before’ to name but a few examples. After 2 years the same people have come up with no acceptable answers to trading with the EU.
“The evil they do lives after them: the good is oft interred in their bones: so let it be with That*her!” Removing almost all the proper apprenticeship and training which created the seed-corn of good craft and a technical society : and deliberately reducing the vehicle(s) of wealth creation (not just manipulation) for the reasons I have opined so often…-flogging-off the family silver, (public assets sold for a pittance) spivs and barrow-boys (for younger readers, those who profited from shortages during war and immediate post war times…) allowed free reign..do you need more. JK Galbraith opined that it will take the UK economy 100 years to recover from all that “That*Her” and her ilk did to the real economy, IF EVER : and as MP correctly says: damn me if they aren’t going to try it again with the NHS. Those the Gods make sport with, first they do drive mad?
Long while ago now, in Ipswich when I left school and started work at an engineering works (Cocksedges), next door was Ransomes and Rapiers, who built enormous walking draglines (amongst other engineering marvels) for open-cast coal mining. Then there were Ransome’ Sims and Jefferies, Cranes and Bennets, Cocksedges plus—-skilled jobs all wiped off by THAT damned woman. Thousands of highly trained engineers et al…….all gone. It brings tears to my eyes, truly, to recall it all. Now warehousing, staffed by a few dozen workers. I left to go to sea, much to my Fathers disgust, just as well, as at least I left of my own free will.
Informed comment from MPs!!! Flying pigs more like! Most only seem interested in narrow self interested parochial views, despite being voted as our representatives to take a holistic and wide and considered view for the electorate’s benefit. Many also do not have appear to have the ability to think or work things out for themselves instead of following their leader’s or whip’s instructions like sheep.
Nick
I agree -the performance of MP’s has been lamentable they appear unable or not interested in working in the national interest.
I make the plea that we should attempt to inform them about modern manufacturing practices- its worth a try even at this late stage?
We export one-off items, each with paperwork as required. Some countries are easy (e.g. Thailand) because there are trade agreements in place for the machinery we export. Once we leave the EU, depending on whether we also leave the free-trade zone we will find that the easy countries have become as hard as the hard ones, and the costs to our customers will increase because of the duty etc.. Maybe the customers will pay the extra. Maybe they will look elsewhere.
There is no such thing as a ‘good’ Brexit – for Industry, for services, for education, for healthcare, for agriculture. Not one single sector is served by pulling out of the union. Of course I can still work with one arm missing, but isn’t it better to keep both? Not one example of ‘better out’ has any credibility – unless someone wants to enlighten me with a definite concrete case? Please give me some hope that at least one thing will be better – and don’t give me any of that ‘sovereignty’ crap please, we had it anyway.
I think Mr P Murray could be a frightened bunny? Is it time to come out of the underground burrow and take a look at the surroundings and the longer term future?
There might be some blue skies and better living conditions?
When I voted to join the EU it was labelled ‘Joining the Common Market’. It was all about selling into the European market. It was not labelled the bureaucratic United States of Europe?
So far the UK has failed to sell our products including Engineering products successfully to Europe. How about selling to a wider audience?
UK Engineers could face the future with more optimism?
Or we could head back down the burrow?
There isn’t any room in the burrow; it’s full of stockpiled food. medicine and blood in case of a no-deal Brexit. We’d better hope for those blue skies.
We should be studying why selling into Europe turned into buying from Europe. Sadly it’s beyond me why the government has allowed the deficit to build as it has. I didn’t vote to leave but if I did that would be the reason, although another reason landed on my doormat yesterday which reminded me that there were probably as many reasons to vote leave as there are leavers.