Viewpoint
Last week’s General Election outcome has prompted a backlash from manufacturing businesses and calls for the government to re-think its Brexit strategy, says Caroline Milton.
With businesses already riding a wave of uncertainty, should they really expect the tone of negotiations to shift in their favour? The engineering industry body, the EEF, is the latest group to call for the government to rethink its Brexit plans; to ensure that continued access to the single market and staying in the customs union are at the heart of negotiations.
With what is being described as ‘almost a year lost’ due to political turbulence, unsurprisingly many SME manufacturers are already considering their options with plans to shift or acquire operations in Europe Businesses need continuity in order to maintain a long-term view and retain some degree of certainty over their investment plans. If they can’t get this here, they will go elsewhere. And of course, any shift overseas will be detrimental to the UK economy.
“the government must listen and take action or face a potential exodus of both business and talent”
With SMEs, particularly those in the manufacturing sector, heralded for their contributions to the UK economy, the government must listen and take action or face a potential exodus of both business and talent.
As Brexit negotiations get underway, the government has an obligation to secure the best possible deal for the sector. Instead of pursuing a hard Brexit based on strict border controls and plans to exit the single market, it is hoped that a softer outcome might be possible. Whilst corporation tax cuts and other reliefs and incentives have helped to bring OEMs to Britain to innovate, all this good work could be undone if the Government pursues a hard Brexit regardless. A certain degree of transparency is also needed to restore industry trust and while we understand the importance of not declaring its hand, the Government should be prepared to back certain guiding principles including securing the best possible trade deal; attracting inward investment and encouraging investment in training and skills development.
Having recently participated in a number of industry working groups, it is apparent that many businesses share the same concerns about Brexit. These include firstly, – having access to the single market with a zero or low-tariff trade deal and secondly, maintaining access to skilled EU workers. The need for more incentives for relevant training and education in order to up-skill the domestic workforce is also considered important.
As highlighted in the government’s Industrial Strategy earlier in the year, the references to developing STEM skills must remain high on the agenda. According to the Science and Technology Committee, the digital skills gap is already costing the economy £63 billion a year in lost GDP and narrowing the gap will require sustained investment in STEM initiatives, with a particular focus on engineering, manufacturing and construction. The time has come for the Government to demonstrate its commitment to this agenda by allocating funding and coming up with new ways to incentivise STEM skills attainment and to avoid a similar brain drain seen in the 1950s where scientists and other skilled workers emigrated to the US.
“Developing STEM skills must remain high on the agenda”
Creating a more favourable fiscal and administrative environment for SME manufacturers will go some way to keep businesses on UK soil. An increase to capital allowance incentives, a relaxation in the patent box rules and removal of the State Aid cap would also help to offset the impact of increased import costs caused by the lower value of the pound.
Whilst the snap election has undoubtedly brought more uncertainty, there is at least an opportunity for the government to soften its approach and bring home a deal which is better for manufacturers and better for Britain.
Caroline Milton, partner and head of manufacturing at accountancy firm Menzies LLP.
The big problem is, it isn’t in the governments gift to deliver anything BUT a hard Brexit. If the EU insist we leave the club first, and then discuss terms of trade once we are outside of the EU, there is not a lot we can do in response. I imagine they will also make trade deal discussions contingent upon us fully meeting the reparation bill. I think anyone in Westminster who believes anything different is several votes short of a government.
And now the grand old Duke of Yorkies weighs in.
Hells’ Teeth, at least 48% of us didn’t deserve this.
I have little interest in what the EEF want: they have never really represented engineers.
Successive governments have weakened and sold-off British industry (largely to avoid more expensive job losses in the EU). UK manufacturing employment has fallen by 17% (600,000 jobs) since 2000 as our trade balance with the EU has deteriorated. Replacing these making-things jobs with zero-hours contract service industry jobs is a national disgrace.
Sadly, whatever type of Brexit we have, it is hard to see the UK prosperity increasing again as long as Westminster rules. I am inclining more to the view that the EU has cost the UK massively in industry and useful jobs and it is good-riddance to the b-eurocrats.
I have said it so many times (and occasionally our Editor allows my comments to get through!) but here we go again. Engineers and STEM educated professionals should by now have recognised that the sole purpose, function, aim, initiative of those upon the Right is to maintain their hands in the financial, fiscal and national ’till’- because they are always right! We know that because of the number of times they are. [That’s right, always?] This entire Brexit farce was little to do with the national interest , and a lot to do with the internal maschinations of the Right.
They used to be called ‘Little Englanders’ (apologies to Scotland, Ireland and Wales, I don’t wish to leave you out, but others certainly do?)
As one of the ‘scientists and other skilled workers-were there any Engineers then in that category’ who indeed did go to the USA (mid-60s) -it was a good job for that nation that we did.
I can speak intimately of textiles, fibres and its machinery, and contemporaries in Aerospace, Photography, sound reproduction, car design and manufacture confirm in theirs: the Engineers who really knew what was happening in design, processing, trouble-shooting were from European, Japanese, and UK firms! From von Braum to MJB!
I look forward to being told by Caroline Milton that they are so undervalued in the UK that is to be a rush of accountants (cost and othersise), lawyers, estate agents, insurance brokers, retail consortia experts…..(add your own examples of clerks -who our victorian ancestors had the good semse to keep as far away from the bored? room as possible…-to emigrate. A second brain drain?
Unlikely: they have so insulated themselves from market-forces, capitalism, and so on: the true drivers of any economy…that they can swan it over we peons who actually have the ability to create rather than manipulate wealth.
Can we not finally make it simple and do what the majority of the country now wants – why they voted as they did and stay in the European union. They are all waiting for this in Europe and will welcome it. The time taken up by government on trying to unravel a good Brexit and if not having to undo all the European rules etc. There are only a few things we as a country wish to change and why do we not get together with Macron and Merkel and make sure these things are changed – there is a will to reform now in Europe. We should grab this opportunity whilst it is still there and make sure that the general economy and business, education, farming and other important sectors automobile and aviation etc to say nothing of the general public who has already seen the disadvantages of Brexit in the price of holidays and general food items, do not lose out. Noone wishes to go back to queues at customs etc and yes there is already a general exodus of talent which we must stop. The simple way out is to undo Brexit which can still be halted and reform those items where the UK is not the only country wanting reform.
So we kill off democracy do we? – by undoing a vote that a majority was in favour for doing whatever their reasons for wanting it.
So basically what you are endorsing is that the minority rules no matter what. You say that the majority of the country wants us to stay in the EU – sorry but I must have missed the vote on this when did it take place?
Responding to A.Duncan, the people voted for Brexit and it was a one off referendum.
I would be very interested to see some numbers from the Remainers / neverenderum people to show how the EU benefits or has benefited the UK: we have lost industries, increased imports from the EU while exports fell, paid on balance about £9b / year to subsidise our competitors……. Where are the benefits that they claim – tell please?
Perhaps the right question to ask is when the EU has ordered everyone else not to buy UK products?
There are no benefits to EU membership only misery in the protection racket they foster. Those that wish to remain in the EU have not explained in any reasonable debate as to why the EU is wonderful. No, it is a club that uses taxpayer money to fund its propaganda programme. Time to move on, now lets go.
No benefits to EU membership? I mean, seriously???? Rather than being a protection racket, what the EU did was introduce greater competition, forcing UK companies to innovate. Trade increased, FDI increased and GDP grew considerably. The UK went from being the ‘sick man of Europe’ to one of the wealthiest nations. But don’t let facts get in the way of your argument.
https://www.ft.com/content/202a60c0-cfd8-11e5-831d-09f7778e7377?mhq5j=e3
Yes Andrew, we were the sick man of Europe, thanks to the politics of the left. The Thatcher government put pay to the to the sick man of Europe tag. So as the UK went from strength to strenght to strength the EU went backwards thanks to Jacques Delors and his socialist policies.
The reason trade increased with the EU was precisely what I was saying about the protectionist EU racket that forced the UK to reduce its trade with the rest of the world. I believe, the FT is pro EU, enought said.
The FT is pro-EU because it recognises the organisation’s role in massively boosting the UK economy.
Before joining the EU, the Conservatives had been in power for 16 of the previous 22 years.
Overall trade increased. The EU does not discourage trade with other countries. It promotes trade within the union via the single market and customs union. There is nothing protectionist about this. It is the very essence of a what a trade agreement is. You know, they type of trade agreement David Davis is currently itching to negotiate with the EU??
I will be delighted to wish DD’s every success: not sure what we now have left(sorry!) to sell except the family silver, the seed corn, the history of the Royals etc, and the betting syndicates (called insurance, banking, estate agencies, legal representation) which run almost everything else.
[who cleverly ‘bet’ with money not their own -ie ours! That is if KQ can fill in the gaps?
As Mr Wade is acting as the Engineers Remain advocate, can he please answer my query of 16th June and show what we have really gained: rather than the abstract claims that do not stand up to scrutiny. The UK have lost 600,000 manufacturing jobs and replaced them with zero hours contracts due to the increasing imbalance of trade with the EU (mainly in the North East and Midlands). The selling-off of the family silver amounted to providing manufacturing jobs in the EU at the expense of the UK as it is much cheaper to make workers redundant in the UK than anywhere else in the EU. For this privilege we have contributed £ 9m per year. They will miss us far more than we will miss them unless there are some facts that have not been made available.
Finally, the EU has used invisible obstacles by not purchasing in English while every EU country can sell in English.
I love Europe, but not the EU and its commissars.
“So we kill off democracy do we?” No, lets start it up again. That is if you believe that a vote, taken by a well educated and informed electorate, given the information they need to make rational analysis (as I sincerely we all as STEM proponents do) does represent such. Somehow, a vote slanted by mis-information (or none) by the machinations of ‘the meja’ following the party line of their owners…and playing upon the fears of a population seeing more and more of their skills, abilities and jobs taken (primarily because the retail consortia have almost stopped buying from those who they wish to have as customers).