Comment: Seamless trade with the EU must be a priority

Terry ScuolerWith an election looming, EEF chief Terry Scuoler calls on politicians of all parties to put a clear and practical long term industrial strategy at the heart of their plans for Britain’s future. 

Another year, another election. Business is now familiar with the seemingly endless cycle of plebiscites and the uncertainty they inevitably create. With Brexit looming in less than two years’ time, if we are to end this uncertainty then what companies now need is a firm pledge from all political parties to commit to policies which support a deal with the EU, deliver economic growth, and a meaningful industrial strategy.

On June 9, whichever party wins a mandate, the Government’s first priority should be to commit to a smooth Brexit strategy that leads to a positive deal for both the UK and the EU. This must ensure that businesses in Britain can continue to trade seamlessly with our EU partners. While we will no longer be members of the EU, we cannot afford to sacrifice our economy to satisfy a hard political ideology.

What companies now need is a firm pledge from all political parties to commit to policies which support a deal with the EU

Such a deal must guarantee tariff free access for UK goods into what remains the world’s biggest market. There must also be a recognition of EU standards and, if necessary, potential ongoing payment of fees to the appropriate compliance bodies to ensure the UK’s input in agreeing potential new regulation. Given that such a complex deal will inevitably take time to implement then a transition period of at least five years is imperative.

Business will also want to see a pragmatic and realistic approach to migration. Many manufacturing businesses employ EU staff across a wide range of skills. Any disruption to the flow of talent is damaging for industry. A new immigration system must therefore take into account employers’ need for flexibility and the ability to recruit people with the right skills at the right time.

Many UK-based employees also need to be deployed across the EU for varying periods to manage contracts, win business and cement new partnerships. Red tape or political posturing must not be allowed to prevent this free flow of commercial activity and, if this means employers must accept a responsibility and burden of controlling a work permit system then so be it. This demand led approach would be far better than any heavy handed Government bureaucracy. The question of the UK’s border with the Republic of Ireland must also be addressed with urgency and a bi-lateral agreement put in place to manage cross border traffic, goods and people.

Any Government serious about industrial strategy must invest in clear horizontal policy levers of economic and industrial policy

In tandem with securing a positive deal with the EU, the new government must not forget that there is still a day job to do of driving growth and job creation across all regions of the UK. As a first step to demonstrate to business that it recognises this, it should commit to the principles of a wide-ranging and bold long term industrial strategy. The ten pillars recently published in the Green Paper remain valid and must become the foundation around which future economic policies and, annual fiscal statements, are created and implemented.

In particular, any Government serious about industrial strategy must invest in clear horizontal policy levers of economic and industrial policy, an area where the UK has consistently lagged. This must deliver a world class workforce, with technical and vocational training finally recognised as equal to academic qualifications, a secure and affordable energy supply and, more effective transport links and infrastructure.

A new administration must also commit to investing in research and development, both through fiscal incentives and direct funding for ongoing innovation programmes, as well as expanding the number of highly successful catapult centres which act as incubators of new technology. These are all basic and critical foundations for delivering growth and the holy grail of tackling the UK’s productivity challenge.

Above all the industrial strategy needs a clear vision, with specific and measurable outcomes, driven by Number 10 and accepted as a core cross Government commitment with recognition of the need for long termism which competitor nations such as Germany have clearly benefitted from.

Successive governments have identified the UK’s weak productivity performance and resolved to tackle it. This time it can and must be different. We now have a real opportunity to make a step change in the UK’s economic performance. Let us grasp it.

Terry Scuoler is CEO of the EEF, the manufacturers’ organisation.