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News | Published June 28 2019

No-deal would be harmful, say industry representatives

Two manufacturing think tanks have reported a correlation between politicians discussing a no-deal Brexit and decreased overseas custom and job vacancies. After Karen Lee, Labour MP for Lincoln, expressed similar fears earlier this week in PMQs, we asked her for further thoughts.

The Society of Motor Manufacturers and Traders believes that the prospect of no-deal is already costing the car industry “tens of millions” of pounds in contingency planning.

Make UK, a trade body which represents manufacturers, say that it would be “economic vandalism” to leave the EU.

Politicians must understand the impact of a no-deal and develop a strategy that minimises its negative impact, and not just for the chemical industry but for all industries

Make UK has also warned that leadership candidates that even considering a no-deal departure from the EU has led to a “loss in customers overseas” for British firms and “British people losing jobs.”

The think tank's chief economist, said: “We are very much aware of a very significant number of job losses in our sector already as a direct result of Brexit.

“Our members say that a no-deal Brexit would be nothing short of economic vandalism. It would undo 25 years of economic progress and consign a generation of highly skilled workers to the scrapheap”.

Managing Director Adrian Hanrahan of Robinson Brothers, one of the UK's largest chemical manufacturers, reports that tariffs would be a great burden for the British chemical industry.

Adrian continued: "[Politicians] must understand the impact of a no-deal and develop a strategy that minimises its negative impact, and not just for the chemical industry but for all industries.

"Trade should continue, but I expect at higher costs to both us and our customers, either in the UK or back in the EU. The government therefore needs to consider very carefully how it can help our industry remain as competitive as we are now after Brexit occurs."

It’s time to end the division of society into the leave and remain camps, and unite behind a strategy which tackles the country’s injustices

When asked to follow up on her PMQs question earlier this week, Karen Lee MP told us: "I’ve visited a number of businesses in Lincoln over the past two years, and they’ve all made it crystal clear: a no-deal Brexit would be disastrous. It will impose unnecessary barriers on their international trade, and it may lead to local job losses.

"The prime minister’s strategy of repeatedly asserting “no deal is better than a bad deal” has resulted in the final two Conservative Party leadership candidates embracing a chaotic no-deal Brexit as a reasonable solution. The priority has become their party’s unity, not the national interest.

"It’s time to end the division of society into the leave and remain camps, and unite behind a strategy which tackles the country’s injustices.”

Even with the best will in the world, no company can fully mitigate against all the risks of a no-deal Brexit

Addressing the House of Commons Brexit Committee, Sydney Nash, the Senior Policy Manager of the Society for Motor Manufacturers and Traders, said that no amount of preparation could protect firms from the implications of leaving the bloc without a ratified withdrawal agreement.

Nash said: “Problems facing carmakers would include tariffs, and delays getting vehicles and parts across borders.

“It will be a ten per cent tariff on a finished vehicle. That will cost the sector an additional £4.5 billion in terms of imports and exports. We rely on the free movement of goods across the border.

“This cannot be guaranteed under a no-deal scenario and that will fundamentally undermine our competitiveness and our ability to manufacture at a competitive level with the rest of the EU. No-deal is absolutely not an option for automotive”.

Nash also described the promotion of no-deal Brexit as “costly” to the industry.

He said: “For our members who have undergone no-deal contingency planning, this is costing tens of millions of pounds, thousands of working hours.

Even with the best will in the world, no company can fully mitigate against all the risks of a no-deal Brexit. Hearing politicians promote the idea of no-deal does not fill any of our members with any confidence. It does not fill international investors with confidence."


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Authored by

Scott Challinor
Business Editor
@theparlreview
June 28 2019

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