Industry chief warns ‘no deal’ catastrophic for manufacturing
The head of Britain’s manufacturers has warned the Government that leaving the EU with no deal would be catastrophic for the sector.
The warning was given to the Chancellor of the Exchequer by Dame Judith Hackitt DBE at the annual manufacturing dinner of Make UK (previously named EEF), the manufacturers’ organisation, taking place 19th February.
She also warns that the prospect of applying zero tariffs on imported goods could kill off some sectors of industry overnight.
It comes on the back of a survey carried out for Make UK by YouGov which shows that 49 per cent of companies believe leaving the EU with ‘no deal’ would make the UK a less attractive location for manufacturing, compared to 28 per cent who say it would be more attractive.
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.
The survey also shows that since the referendum in 2016 almost two thirds of companies have switched production elsewhere in the EU. By contrast just one fifth of companies have switched production back to the UK.
The survey also shows that adjusting their supply chain has been a costly exercise for companies with 51 per cent saying it has increased their costs and just 10 per cent saying this has reduced their costs.
Looking ahead to a post Brexit economic environment 53 per cent of companies believe a lower tax burden would help encourage manufacturing activity in the UK.
“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,” said said Dame Judith, Chair of Make UK.
“This is not a prospect that our sector can counter. As our survey published this morning with YouGov shows, companies have already taken action to move production overseas and the prospect of leaving with no deal means the UK will be a far less attractive location for manufacturing in the future.”
She adds: “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.
The survey of 429 companies was carried out between 28th January and 5th February.