A vote to leave the EU “is an astonishingly uncertain gamble”
The EEF’s annual manufacturing conference in London always provides a day of insight, information and stimulating discussion on the key issues affecting the UK’s manufacturers.
This year proved to be no exception, with some excellent discourse around the nation’s ‘productivity puzzle’; how people and processes can work connectively to enhance output, as well as ongoing conversations around succession planning, skills and exporting.
Overwhelmingly, and unsurprisingly, the item on the agenda that made the biggest noise, however, and underpinned almost every other presentation in some way, was the discussion on the UK’s future in the EU.
The sector is battling a number of “headwinds”, as EEF Chief Executive, Terry Scuoler, put it, and against the backdrop of the economic slowdown in China and developing markets, oil prices, geo-political issues in the Middle East and currency fluctuations, said there was undoubtedly “uncertain years ahead.”
Added to this, he said, was the biggest uncertainty of all: the result of the upcoming EU referendum. “Leaving the EU would lead us to unchartered and potentially difficult and stormy waters,” Scuoler told delegates. “It is that unpredictability that both I and my organisation seek to avoid.”
Scuoler wasn’t alone in his opinion. The Financial Times’ Chief Economics Commentator, Martin Wolf CBE, said a vote to leave the EU would be “an astonishingly uncertain gamble.” This, he added, was on top of what he believes to be an already difficult few years ahead for the UK in economic terms.
“A so-called Brexit would inevitably launch a period of massive uncertainty as nobody knows what leaving would mean,” Wolf said. “We know what staying would mean and we may not like it, but a vote to leave would be a vote into a highly uncertain environment."
Wolf said this uncertainty would have a knock-on effect to many other business decisions. “I don't know how a management firm goes about positioning itself for investment as it makes such a huge difference whether the UK is in or out of EU.”
Debating the issue in its own right later in the proceedings, Damian Green MP, Chairman, Conservative European Mainstream Group and Matthew Elliot, Chief Executive, Business for Britain, put forward their respective arguments for staying and leaving. Elliot said that a lack of change within the renegotiation regarding trade deals meant the manufacturing economy would not best benefit from staying in the Union. Green argued that the uncertainties of how a leave vote would affect some of the UK’s strongest manufacturing sectors, including automotive, were too great to gamble upon. Following the debate, an in-house poll asked audience members whether, if the referendum was taking place ‘there and then’, how they would vote. An 82.1 percent majority voted in favour of the UK staying part of the EU.
The Productivity Puzzle
Wedged between debates on the upcoming referendum was a panel discussion on the UK’s ‘productivity challenge’, i.e. how UK manufacturers can “get more with less”. The main talking points related to embracing a need to enhance productivity through business models, workforce training and investing in plant and machinery, but also through the adoption of the opportunities offered by the ‘digital age’, often referred to as ‘Industry 4.0.’
“We do have a a big productivity challenge - this has opened up quite significantly since the recession,” commented EEF’s Chief Economist, Lee Hopley. “There is a strong focus on improving efficiency and competitiveness and lots of companies say they know they need to be more ambitious when it comes to utilising the technology that will lead to a step-change in productivity performance.”
The EEF called on Government to ensure the right policy framework is in place to allow manufacturers to adapt to new, productive working environments, including a tax system that incentivises investment and Government support for innovators and exporters.
The panel commended an earlier announcement by the Rt. Hon Sajid Javid MP, Secretary of State for Business, Skills and Innovation, who revealed that the Government was launching a review into the UK’s Internet connectivity, following a recent EEF report on its importance in enabling the use of big data and information systems.
Exporting still high on the agenda
Doing business in export markets was the theme of the final panel session. Liz Fothergill CBE, Chairman of Pennine Healthcare, a manufacturer of medical plastic devices and Edward Naylor, CEO of building products manufacturer, Naylor Industries, highlighted finding the right distributors, embracing local culture and providing high levels of customer service as essential pointers for manufacturers looking to expand abroad. Alan Ainsbury, Head of Trade and International, Transactional Services Division, RBS, who was also on the panel, advised manufacturers that there was still opportunities to export in markets that are contracting, that they just need to be sought out.
Ending on a high note
After a day of discussing the future, whether it is as part of the European Union, or embracing a completely new way of working alongside robotics, automation systems and software, there was a rollercoaster of information for delegates to contemplate.
However, there was tonic in the final keynote, with Baroness Brady CBE, Vice Chair of West Ham United and Apprentice Aide, leaving the audience inspired with her empowering address on succeeding in business against the odds, parting on the advice: “Grit your teeth, find your backbone and then put one foot in front of the other.”