UK manufacturers, big and small, depend upon access to the EU, the biggest single market in the world with 500 million people writes EEF chief Terry Scuoler
The question at the heart of the European referendum is simple, yet fundamentally important: how should the UK engage with the rest of the world and, are we better off economically in or out?
I believe there are two critical reasons why it is imperative the UK remains a member of the EU. First, political. We are fortunate not to have lived in an era that has been defined by European rivalry division and conflict but one of relative peace, economic prosperity, political security and social stability, much of which is clearly linked to greater co-operation among the nations of the EU.
Were we to leave the EU now when the continent faces challenges, perhaps greater than at any time since the union’s creation, from a volatile Middle East, and a turbulent world economy, there is a risk further uncertainty will be created. Domestically, an English exit majority, with the potential opposite outcome in Scotland, would put even greater strain on the EU.
Leaving would diminish both our, and the EU’s, place in the world
Internationally, leaving would diminish both our, and the EU’s, place in the world and significantly affect the relationships we have with overseas countries, especially the US. The second reason why we must remain is economic. The EU is the biggest single market of its kind in the world with a population of 500 million people. Our manufacturers, big and small, depend on access to it.
Over 80 per cent of EEF members in independent research identified the biggest advantage of membership as providing a base for exporting. Over half of British chemical and pharmaceutical exports go to the EU, worth some £30bn a year. Almost 90 per cent of British SMEs that export do so to the EU, and almost half of our overall trade goes to the EU.
The UK is the leading destination for foreign direct investment into the EU
Almost a fifth of manufacturers benefit from EU support for innovation. When it comes to receiving EU innovation funds, the UK has tended to receive 15 per cent of the total, making us one of the top-performing nations. Consider how many high-quality jobs this supports?
The UK is also the leading destination for foreign direct investment into the EU with the Japanese government having gone on record to say that the attraction of the UK being part of the EU has led to 1,300 companies investing in the UK. Half of all European-headquartered non-EU firms are now based in this country.
If we were to leave, nobody can predict that this attractiveness will remain. It may, or it may not. But what I do know are the facts and benefits of being in the EU now, which have been, and still are, largely positive.
The prime minister may, or may not, have agreed a good deal recently. That’s a matter of personal opinion but what he is fighting for is worth having. The recognition that there is more than one way forward than ‘ever-closer political union’, the stress on the importance of competitiveness, lower business costs and protection for countries outside the eurozone are important in themselves.
His actions have also shown that if you really put your mind to it you can start to get change. Did anyone really think that overnight everything would change in our favour? This may take time, strong leadership and a partnership with like-minded members. However, we are unlikely to achieve the change by not being members at all while shouting from the sidelines.
Having worked in many forums in Europe I know that we can bring influence and change. Organisations such as the EEF and other similar bodies have done this time and time again.
Independent research carried out for the EEF shows that almost two-thirds of manufacturers want to stay in
The job of our elected politicians is to commit themselves to using the power they have to make it work better, rather than make excuses about the limitations they face, and simply give up and take us out into an abyss of uncertainty and risk.
Those who would have us leave have accused those of us arguing to remain of conducting ‘project fear’. But it is not ‘project fear’ but ‘project reality’. Independent research carried out for the EEF shows that almost two-thirds of manufacturers want to stay in and only 5 per cent want to leave. In taking this view they, and the EEF, are not looking at the EU through rose-tinted spectacles and are fully aware of its shortcomings.
They are practical, however, and, on balance, have decided that it is worth remaining with the right way forward being to work to improve the EU for the benefit of all member states rather than simply walking away.
Terry Scuoler is CEO of the EEF
The arguments put forward really are quite disappointing.
1. No one is arguing against European cooperation, the unpleasant slight of hand is the suggestion one needs the EU to accomplish this. Ask your self this question: is a supranational political entity a pre-requisite for cooperation amongst nation states? No, clearly it isn’t. Desiring the latter does NOT demand the former.
2. Remaining in the EU because of current circumstances is arguing for a permanent solution on the basis of a temporary problem. The Samaritans warn many of those they counsel against making such choices.
3. What kind of democratic mandate would there be, for a majority of Britons, whether Scottish or English to be coerced into remaining in the EU because a vocal minority want it?
4. Yes, there are economic arguments for continued EU membership but there are also positive arguments for leaving. Maybe our exporters depend on access to the EU but I don’t see access being denied to US imports, why would ours? Please remember we have not run a surplus against the EU since we joined the EEC back in the 70s. Leaving the EU would hardly make our deficit worse. And remember that the single market has only been completed in goods: to the benefit of our German friends, with regard to services, where we excel…its always another reform away. Like nuclear fusion.
5. Yes, our status in the world would change but remaining in the EU has its costs also. One must recognise that for an increase in stature there is a commensurate loss in independence: strength comes from pooling and thereby diluting national influence. Moreover people should be aware that this trend is only going to accelerate as qualified majority voting expands in to more and more competencies.
6. As for the re-negotiations, I’m sorry but these are frankly risible. What kind of substantive change doesn’t require treaty change? Consider this: David Cameron’s opt out categorically states that is in FULL compliance with the Treaty of Rome – which enshrines the principle of “ever closer union”. How can an out opt out from “ever closer union” be fully compliant with its counterpoint? Its clearly incoherent and without treaty changes will be turned over / ignored as an inconvenience by wily politicians. Britain will remain subject to the same legal requirements as it always has been. If the rest of the EU integrates further we will be dragged in even though we have an opt out. Yes, we will have opted out of further integration but we will still be subject to all the same laws and restrictions as those who haven’t. Its like sitting on a ship and agreeing with your fellow passengers that you alone don’t have to go to Brazil, yet they’re the ones who choose the ship’s course. When you eventually arrive in dock there you’re still subject to its laws and customs even though you were never compelled to be there. Its meaningless nonsense.
In my opinion, we need to leave the EU, not only for our own sakes but for the sake of the rest of Europe. I ask you one last time to consider this question. What kind of organisation is so inflexible, unyielding and resistant to reform that the unhappiness of its second largest contributor goes unheard and only the most inconsequential of compromises are agreed?
I put it to you, the answer is one that’s uninterested in the well being of its members; one that defaults to bullying and threats; one that’s governed by an aloof European elite and that is only subject to only the vaguest forms of accountability and transparency. Do we really want to remain in and perpetuate such an organisation as this?
Well said, Nath. The government’s spinelessness and claims of triumph for worthless ‘renegotiations’ and nothing more than Chamberlain-esque appeasement of a seemingly, but not actually, more powerful opponent. The EU is riven with problems, and the quicker we get out, the better. Unfortunately, career politicians and their ‘advisers’ are bred to maintain the status quo, and any difference of opinion is lunacy, xenophobia or stupidity.
Integration and co-operation are not the same thing. Britain has fought and won wars with European allies but they never imposed their will on the nation
The article makes much of exporting to fellow EU countries yet doesn’t mention that we have an annual EU trade deficit of around 50bn pounds. I have yet to hear a politician address this. Of course we could address it individually in the obvious way but apparently we don’t want to. Investors from various countries set up business in the UK to make goods that we don’t want because we’d rather buy German ones. Am I wrong to suspect that most investment into the UK is actually buying London apartments?
I agree with the comments from Nath and Malcolm. As a previously dedicated Europhile, I have been wrestling with the decision and am now well towards the Brexit; the fear campaign ant EU trade problems do not sit well. The economics for staying seem to be as bad as Malcolm says to me.
The research interests and budgets will certainly have to be re-negotiated, but it seems that we put in a lot more than we take out and would probably gain from increased control of this money. I’ve still not seen one document that shows where the benefits of membership lie: uncertainty threats, as in the above article, is not the answer – when is the world not uncertain and what improves this? The EU is no better at responding to international threats than the UN.
It is instructive to read the points made by the Mr. Scuoler / the EEF and consider them further:
1. Exports to the EU. There seems to be a threat that the EU will stop importing our pharmas and chemicals if we leave. Is this founded on knowledge or just a threat? It is clear the EU exports far more to the UK than they import. Are trade-wars to be expected?
2. Foreign investment, especially Japanese, will reduce. This has a risk attached, it has always seemed that the investment in UK factories was for access to the EU, with the added value in most cases of trading in English rather than the otherwise compulsory French. This relates to point 1 in that it assumes that the EU will for some reason stop trading with the UK. How much real risk is there regarding inward-investment?
3. EEF polls show two thirds of manufacturers want to stay in the EU. If this is a genuine opinion poll, we should be given information on who was polled and what was asked as polls are often not objective. I have a natural suspicion of polls and consensus views, that may or may not be justified.
I would love to have my faith in UK membership of the EU restored, but am sad to say that unless some of the facts are explained better it is the Brexit for me.
The electronic equipment I see comes from China, Japan, Taiwan, Korea none of these countries have a problem supplying the EU. Anything that reduces bureaucracy has to be better
Perhaps some of the most informed and rational comments I have read on this subject. But of course, most of those commenting have the advantage of an education and training in the scientific method, logic, decent consideration of ‘evidence’ -all of it- and rational analysis: ie not tainted by dogma, political persuasion and the like. I applaud it. I always wished my children to be as ‘at-home’ as Europeans whether they were in Tubingen, Tuscany, Tulouse, Tunbridge Wells, Toledo…you get the idea. I am pleased to say they are.
Is there an over-riding reason that drives my thinking? It is the one that recalls the almost continuous slaughter, amongst European ‘proles’ , encouraged by the leaders of individual ‘states’ of Europe for almost all of the last century : a loss that I myself suffered. Do I prefer to be ‘Red or Dead?- all I wished/wished to do was have the opportunity to practice my professional skills effectively.
Do I wish to be ‘governed’ from elsewhere across the Channel. I already am and that channel is a mental and intellectual one. Between professionals, which I trust i am, and ‘others’, who have or seek power without the attendent responsibility. Do I seek to live in a society (no matter how large) in which all are equal before the most essential attribute of a caring and sensitive ‘state’. IThe parctice and practices of its Laws. Am I more likely to enjoy that happy situation in an ‘inquisitorial’ [Napoleonic] code, that non-adversarial process which alone in Europe our nation does NOT have. The answer is surely yes.
The one thing I really ‘mind’ is that the majority of those who seek to control us all are NOT as intelligent, intellectually rigorous and innovative as the majority of ordinary citizens: anything that reduces that outrage gets my vote. And will.
The referendum issues have made me examine a lot more economic statistics than I have ever previously looked at, and their vagueness is frightening compared with what we as engineers expect. Very often they depend upon the differences between two massive numbers both of which are uncertain, as with the balance of payments and defecits. No wonder politicians get away with murder!
Regarding the stay / brexit issue, I believe that the economic-uncertainty mentioned by Mr.Scuolar and clearly the mainstay of the remain-in campaign, is largely the Foreign Direct Investment in the UK. The main sources of FDI are USA, Japan and China. This had fallen from $1.9 trillion in 2007 to $1.26 t in 2014. It appears from survey that 19% of investors would put investment on-hold until the devolution issues were resolved. The risk of a Brexit appears to be in the withholding of FDI and I would like someone to explain that risk in a clear manner.
I’m still likely to use my lucky penny to make my decision unless the information available improves.
In the latest issue of The Engineer, the CEO of EEF is expressing the position of the Remain Campaign, I imagine that as a science based publication you will now counter that propaganda with an equal opportunity for the Leave Campaign.
Having just returned from the huge triennial Bauma exhibition in Munich, where I can only recall the excellent JCB from the United Kingdom, little wonder our annual trade deficit with Europe is 10 Billion.
These large organisations and economists were the same gang last time saying that we must join the Euro for any trade at all with Europe, how wrong the Establishment was!
The article shows the opinion of one undemocratic bureaucracy encouraging us to vote for another unaccountable undemocratic bureaucracy.
S M Eaton
Engineering Director
B S Eaton Ltd.
We have asked the Vote Leave Campaign if they would like to put forward a spokesperson from the manufacturing sector and are currently awaiting a reply
It seems that the brexit campaign has not really got going yet, the stay group had the massive advantage of having the civil service to provide info before the campaign-proper was allowed to start. I look forward to some clearer explanations of the claims from both sides: so far it is brexit-fear or anti-Europe rhetoric that we are being fed.
I think that I’ll polish-up my lucky penny, if I can find it.