One of the main concerns a lot of people have always had about Brexit is how it could adversely affect trade with EU countries. Even though that issue cannot be resolved without considering the wider picture, it seems now that post Brexit Manufacturing could be under threat.
The recent report that up to one in three manufacturing companies may plan to move at least some of their manufacturing out of the UK after Brexit is not an entirely surprising turn of events. Maybe there a number of reasons for it, too.
Brexit Manufacturing – Trade
Firstly, let’s consider the trade agreement. We don’t know what deal the UK will have with the EU in two years time, but often companies will be projecting three, four or five years ahead. After all, how else can you set targets and manufacturing goals unless you can plan ahead? How can you plan ahead unless you know your trade routes and options? Politicians can make assurances all they like, but business is business: that can’t be based on false promise. Some companies rely on the EU connections they have in order to do their business. Can they afford to sit around, waiting for the government to sort it out? Remember – we went into the referendum with no plan for Brexit happening, so no-one can claim they had firm contingency plans in place.
Brexit Manufacturing – EU Workers
What hasn’t been made clear yet is just how many of those manufacturing companies thinking of moving also employ EU Workers. At the moment, the government is not giving any assurances to EU migrants, regardless of how long they have been in the UK. Surely that places increased pressure on industries and manufacturers who might want to keep their current workforce. You can’t move an entire company simply for a few staff, but you might need to if you have a large proportion of a workforce that doesn’t want to move on as it is.
One of the worst stereotypes is that EU workers are brought to the UK as a kind of cheap labour market. In truth, a lot come to the UK because they have the skills that are needed. There is a large skills shortage in the UK, and as an ex-teacher I could explain that to an extent (but that’s a debate for another day). We’ve discussed on the blog before about fears for EU migrant NHS Nurses (Permanent Residency and Job Security) and it is well known that the building trades are rich with EU skilled workers.
So is one of the other reasons manufacturers are considering leaving a long term staffing and skills consideration?
Is this the cost we should be expecting?
We’ve dipped into this topic a number of times, most recently with our blog Brexit Britain: what will it really cost? Even without discussing individual voting choices, it is clear that the UK entered into Brexit with no clear vision, no clear plan, and as a result companies such as manufacturers either had to make new plans, or go to back-up plans.
I personally think that Tories must have had some kind of plan to consider or else they would have been the most careless, irresponsible, and incompetent leaders of the country. This is why we could call this whole situation a mess. Politicians trying desperately to outdo each other with a soundbite; ministers saying they would have voted differently in hindsight (but not thinking this should bring the process into question); a Prime Minister having to be told in no uncertain terms not to try and intimidate the house of Lords…
It might only be my opinion here, but this whole situation is a mess simply because the referendum itself was unclear, misinformed, and conducted like a violent hustings filled with people basically flipping a coin. Or worse still, following whoever simply took their fancy.
It’s a mess because no-one is prepared to admit they got their hands dirty in the first place.