Manufacturers are clear about their priorities from the Government’s Brexit negotiations. Our sector’s key concerns are that we retain the tariff-free movement of goods to the EU and, during an appropriate transition period, maintain the economic benefits of access to the Single Market and Customs Union. Thereafter, minimal customs arrangements and a flexible approach to accessing EU labour are essential for our sector to flourish.
We now have just over 12 months before a deal of some kind needs to go before both the EU and UK Parliaments for ratification. In that time, the Government has to sort out the divorce settlement and set out the terms of a new trading relationship with the other 27 countries. With the best political will in the world, success in achieving this satisfactorily and within that tight timescale is highly unlikely. There will come a point when businesses may, in a situation of ongoing uncertainty, decide not just to delay investment but to steer it offshore.
Access to the right skills is a major concern for UK manufacturing as we already struggle with a significant and well-documented domestic skills gap. An early agreement on guarantees for EU citizens would provide much-needed reassurance for all those already resident in the United Kingdom before Brexit, and of course for UK citizens already resident in the EU27.
Manufacturers must also be able to continue to recruit EU workers at all skill levels until the UK labour market is able to support businesses’ demand for these workers. We understand that controlling future EU migration is a difficult balancing act, but it is vital government gets this right for the manufacturing sector to survive in a post-Brexit world. EEF has also called for a reduction in the cost to business of recruiting from outside the EU by abolishing the immigration skills charge along with reversing the recent decision to remove the short-term intra-company transfer route.
In the longer term, we would like to see government spearhead a consistent approach to tackling the UK’s longstanding and future skills needs. This must be a key thrust of the new and evolving Industrial Strategy, prioritising science, technology, engineering and mathematics (STEM) education and vocational training.
The Industrial Strategy should also ensure minimal disruption and no additional costs to trade with the EU, which remains a key market for our sector’s goods and services. Over eight in ten manufacturers (84%) export to the EU while almost three-quarters (74%) say that a 10% tariff on exports to the EU would have a highly negative impact on their business.
Our regions and localities rightly form a major part of the proposed strategy and the Government’s commitment to ongoing investment in broadband and other infrastructure projects, innovation clusters and greater support for small and medium-sized enterprises’ (SMEs) supply chains is welcome.
If adequately implemented, these and other initiatives can not only reduce the uncertainty of Brexit, but will set our country on the right path for decades to come.