Why Brexit uncertainty will wreak havoc on our manufacturing sector

Both business and unions are uniting on one thing: talk of a no-deal Brexit is detrimental to jobs and investment.

The cracks are starting to appear: UK manufacturers are becoming increasingly exasperated with the government’s apparent inability to avoid a calamitous Brexit. 

The uncertainty at the heart of government is creating widespread insecurity and confusion within both management and the workforce.

There is a constant drip of companies advising Unite shop stewards and conveners that they can’t make investment decisions until the shape of a trade deal with the EU is known – and that planned new products and models may not happen.

Business nerves are on edge – and nowhere more so than in the car industry. 

Toyota became the latest car manufacturer to warn this week that a failure to secure tariff-free access to the European market could result in a rethink about the future of its biggest UK plant.

The call on ministers by the car giant’s executive vice-president Didier Leroy to lift the “fog” around the Brexit negotiations was hinted at earlier this month, when Toyota said its commitment to building the next version of its Auris model at Burnaston was dependent on the government securing a transitional Brexit deal.

Unite warned then that unless the cabinet focuses on delivering the transition period, rather than squabbling among themselves, there was a very real danger that investment in the UK would simply “melt away”.

It doesn’t require an economist to demonstrate what the imposition of trade tariffs on up to 85 per cent of an automaker’s production will do to its competitiveness. Toyota would be hit to that extent – as would others.

A no-deal Brexit will undoubtedly be the worst outcome for the auto sector, and for all areas of manufacturing.

As well as that, aerospace, engineering, agriculture, food and others all require assurance that the government is doing all it needs to do to support them through the EU withdrawal process.

And that it understands that crashing out on to World Trade Organisation rules isn’t an option. WTO terms of trade will be a disaster for our members, who will be forced to pay the cost of tariffs.

And while we are already seeing jobs being lost in many sectors and regions because of Brexit doubt, there is also evidence that opportunistic producers and retailers are using the weakness of the pound as an excuse to raise prices on everyday household items. Many Unite members voted for Britain to leave the EU. But they did not vote to be poorer or have their jobs put at risk.

Yet the no-deal parliamentary zealots – who Theresa May is allowing to call the shots – think that because they say all will be well, it will be.

They brush aside the effects on manufacturing and its supply chains of a cliff-edge Brexit – seemingly committed instead to turning our country into an offshore tax haven based on the service sector.

As if manufacturing jobs are just collateral damage in their determination to complete Thatcher’s experiment.

Our members are not bargaining chips and their livelihoods are not collateral damage. Whatever some ministers may believe, it is their duty to protect jobs.

They cannot blame industry caution, or Brussels, when investment goes elsewhere.

But if it does, we’ll certainly know who to blame – this chaotic, divided government and a prime minister incapable of standing up to and calling out those in her party who put their ideals above the interests of working people.

Both unions and business will be united on that front.

Tony Burke is assistant general secretary at Unite. He tweets here.

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3 Responses to “Why Brexit uncertainty will wreak havoc on our manufacturing sector”

  1. Nigel de Gruchy

    Tony Burke is spot on. The irony smacking us between the eyes is that all sides want to have the best and closest possible trading relationship with our EU partners. It is blindingly obvious to all but the those determined to be obviously blind that remaining in provides the best relationship.
    The Referendum was a farce with few people on any side knowing what they were voting for in a process that was seriously corrupted by billionaires’ dark money and media barons’ warped self-interest in a context in which electoral law is manifestly and hopelessly out of date and totally unfit for purpose in securing a level playing field.
    Why should I respect the 2016 Referendum result when Leavers never respected the one in 1975 and when Farage and Co. declared before polling day that they would keep fighting on if the result went against them?
    Parliament is our sovereign body. It did not legislate for the result to be binding but was silent on that issue.Thereby Parliament retained its own sovereignty which implies it must have the final say. Armed with the kind of devastating evidence provided by Tony Burke Parliament would be within its rights and acting in the national interest to decide to quash the reckless and premature Article 50 notice of intention to withdraw by the UK Government.

  2. Mike Stallard

    We must join EFTA and stay in the EEA.
    Why?
    The alternatives are too terrible to contemplate.
    We cannot stay in the EU as it goes forward into one Union run by the Commission. Remember, the global companies are all in favour of us staying in! They have huge budgets for lobbying, wining and dining and schmoozing MEPs and Commissioners.
    We cannot just leave the EEA (Common Market) because of the reasons stated above in this thoughtful article. Once outside the EEA we become a “third country” along with North Korea with no trading rights at all. All other countries have a nexus of special arrangements which allow certain articles to be traded.

    We need to join EFTA so that we can stay in the EEA, free of the CAP – freedom for fishermen – the CAP – freedom for farmers under our own government subsidies, and free of the ECJ – to allow deportation and a cap on immigration (the Liechtenstein option).
    Not a lot of people know that.

  3. patrick newman

    A no deal Brexit is simply not viable. Leaving a very large trading block and becoming in international terms a bit of a tiddler hoping that large countries like the USA, India and China will be kind and not take advantage like the USA did over Bombardier is approaching the absurd. As soon as the no deal approach looks like the front runner there will be a big run on the pound (strangely the markets will not see things the same way as Rees – Mogg) As for indigenous industries the flight to the continent will be in full swing. Already 400 jobs gone at Vauxhalls and I will be astonished if Peugeot does not close Ellesmere Port and possibly Luton within the next 6 months. Labour will need the gaming exercises to handle what will be a serious financial crisis!

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