Leading UK engineer Dame Judith Hackitt has warned that leaving the EU with no deal would be catastrophic for the manufacturing sector and could kill off some sectors of industry overnight.
Dame Hackitt, who is chair of Make UK (formerly known as EEF) was speaking at Make UK’s annual dinner. “I am saddened by the way that some of our politicians have put selfish political ideology ahead of the national interest and people’s livelihoods and left us facing the catastrophic prospect of leaving the EU next month with no deal,” she told the audience.
“Let me be clear for the press and for those hard brexiteers who accuse us of scaremongering. This is very real and very serious. The ninth largest manufacturing economy in the world needs to be assured that our contribution to UK prosperity is recognised and valued.”
Hackitt’s comments follow the publication of a Make UK survey which found that 49 per cent of UK manufacturers believe that leaving the EU with ‘no deal’ would make the UK unattractive as a manufacturing location. Just 28 per cent said it would be more attractive.
The survey, which was carried out between 28 January and 5 February and based on responses from 429 companies also found that just nine per cent of companies say they have won business previously sourced overseas since the referendum, highlighting the fact leaving the EU does not appear to be improving prospects for companies.
Other findings show that since the since the referendum in 2016 a number of companies have offshored production. Of those who have done so, almost two thirds (61 per cent) have switched production elsewhere in the EU. Just one fifth of companies (19 per cent) have switched production back to the UK.
Furthermore, of those who have adjusted supply chains a third (35 per cent) have offshored with the EU being the most common destination. A quarter (26 per cent) have reshored production back to the UK, the vast majority of which has come back from the EU.
The survey also shows that adjusting their supply chain has been a costly exercise for companies with over half (51 per cent) saying it has increased their costs with just 10 per cent saying this has reduced their costs. The financial impact of preparing for Brexit is also evident in the fact around half of companies have taken action to stockpile goods or, are considering doing so, with over half (56 per cent) of those who have started stockpiling experiencing some financial difficulty in doing so.
I was hoping that Judith Hackitt might “drain the swamp” as the EEF has never represented engineers, and have continually led project fear. They represent the large companies senior management mainly: almost all of whom are “Remainers”, mostly trading in imported EU products.
The change of name is promising, but the swamp remains. They ought to be trying to arrest the decline of manufacturing in the UK that has been going for the last few decades, rather than peddling their political agenda: but that is not what they represent.
I have still not seen any projection that putting us outside the world’s most successful single market will be beneficial to the UK in the short or medium term. The Brexiter in chief, Jacob Rees Mogg, describes it as a project where the “benefits” will take decades to realise. What damage or the risk of damage does he deem acceptable to UK manufacturing in the short and medium term? He is incredibly blasé about it.
Whilst any major shift in the trading relationship between the UK and EU will result in winners as well as losers, everything I have heard, read and observed suggests the net effect will negative, the only question is how bad will it be? Judith Hackitt is trying to articulate that clearly and unambiguously to those who are otherwise playing fast and loose with our industry. Please, don’t diminish the risks to UK manufacturing by using a throwaway term such as “project fear”, it does nothing to help UK industry.
The economics of Brexit remain very unclear and the decision to leave is an “act of faith” rather than provable facts. However, there are some facts that seem to be forgotten by those behind “Project Fear” (a fully justifiable term given the hyperbole in the press about cliff-edges, catastrophe etc). The UK’s balance of trade in manufactured goods with the EU has deteriorated annually and is now about £20 b / year: this translates directly into employment and worthwhile jobs. We also pay £ 9 b / year for membership, i.e. allowing the EU to close more UK industry every year. The big losers will be companies who import from the EU: they will be exposed to world trade competition, from which the UK has little to fear.