As Brexit progresses, the UK is likely to see a “shift to lower-productivity manufacturing, reinforcing weak economy-wide productivity”. Higher-productivity manufacturing will decline as the UK is left out of deeply-integrated European supply chains.
Jack Semple (Secretary of EAMA) notes that these are findings of a report, Trading Up, from the Resolution Foundation (RF), a well-respected think-tank – you can find this report at Trading-Up.pdf (resolutionfoundation.org). The report starts by asserting that “Britain needs a trade strategy”.
In a recommendation, the report says that “politicians from all sides say they want to grow high-value manufacturing but if we are serious about this, we need to remain part of European supply chains. But doing so means revisiting our relationship with the EU, ideally delivering a “UK Protocol”, building on the agreement for Northern Ireland, that will mean a frictionless flow of goods trade between the UK and EU”.
Separately, HM Treasury (HMT) declines to state how it defines “advanced manufacturing”, one of five areas that the chancellor has identified as important for economic growth. HMT gives advanced manufacturing a value of £93 billion – which is less than half the manufacturing sector as a whole – but will not say what is included and what is not. The Department for Business and Trade says the definition is a matter for the Treasury.
EAMA has written to the chancellor asking for the information to be made available and making the following points:
• “advanced” should refer to process, not product;
• the sector is “manufacturing”;
• “advanced” should be the aspiration for all manufacturing; and
• policy should be about how to achieve that aspiration.
Comment: Neither the Conservative government nor Labour have yet argued convincingly that they have a strong commitment to manufacturing.
*A survey of Leave voters carried out for UK in a Changing Europe finds that almost half (48%) of Leave voters feel politicians could have made Brexit work but did not even try. 70% said they would vote Leave again, just 12% said they would vote Remain.