Government needs to rethink its Brexit strategy

In uncertain times, Terry Scuoler is clear about two government priorities – Brexit needs to be about trade and cooperation, and political turmoil must not get in the way of an ambitious industrial strategy.

EEF's Terry Scuoler addressing the National Manufacturing Conference 2017 at the QEII Centre, London - image courtesy of EEF.
EEF’s Terry Scuoler addressing the National Manufacturing Conference 2017 at the QEII Centre, London – image courtesy of EEF.

Harold Wilson once said, ‘A week is a long time in politics’. By the time you read this in July, we will be only a few short weeks on from a General Election that has left business and industry in a very uncertain position.

However, we do have a government, and as the largest party it has every right to carry on in power until parliament, or the electorate, decides otherwise.

After the last two years, manufacturers are used to uncertainty and will carry on planning to invest and grow. Indeed, our latest survey showed the sector enjoying strong growth, with exports driving increased output which, in turn, is leading to increased demand for staff.

Rethinking Brexit

We expect this scenario to continue for at least the rest of the year. Notwithstanding this positive picture, there should be two key priorities for the new government.

First, there should be a rethink of the Brexit strategy that radically refocuses negotiations around trade and close cooperation to ensure a smooth exit from the EU. Given we’ve just wasted a year, the government needs to move away from its previous rhetoric and start repairing relations with our EU partners.

This means putting access to the single market and a form of customs union at the heart of a revised strategy, and removing options for a hard Brexit, which businesses believe could be highly damaging for Britain.

This article first appeared in the July/August issue of The Manufacturer magazine. To subscribe, please click here

With less than two years to negotiate a meaningful deal, the government should also commit to a significant period of transition to manage uncertainty for businesses and bolster confidence.

Business groups such as EEF can help with the negotiations over trade, which is the model many other governments involved in trade negotiations adopt, and we need to be brought in quickly. Above all, we need to build a political consensus based on our collective national interest.

The majority of CIOs in the UK (94%) said that Brexit has impacted their IT decision-making.
Government needs to move away from its previous rhetoric and start repairing relations with our EU partners.

Industrial strategy

The second priority, and one we will be pressing for, is for the government to commit to an ambitious industrial strategy. It is imperative that momentum on this is not lost due to political turmoil.

The 10 pillars identified in the green paper earlier this year are the right areas for the government to focus its policy on, enabling more investment and productive activity to take place in the UK.

The most important of these for manufacturers is support for a more skilled workforce, investment in reliable infrastructure and world-class backing for companies planning to innovate and export.

We believe that a number of recent policy decisions have been a good first step in addressing these issues, including support for new technical colleges, measures on science and innovation such as the Industrial Strategy Challenge Fund, and commitments to major infrastructure projects such as Heathrow Airport Expansion and Hinkley point.

However, there should be more emphasis on the cost of doing business in the UK, where recent policy decisions, especially on energy, have added to the cost burden for manufacturers.

As industrial strategy aims to secure more investment in productive assets across the economy, a commitment by the Chancellor to minimising costs to business in the next Budget will also be an important signal to the private sector.