UK influence in Europe is crucial to creating the right environment for manufacturers, says Ian Rodgers of UK Steel

Posted on 14 Dec 2011

Following David Cameron’s use of the veto to block the EU Treaty last Friday (9th December), leading figures in UK industry have expressed their concern over Britain’s leadership position. Ian Rodgers, director of the trade body UK Steel, raised his concerns for what this means for British manufacturers in an article for The Guardian on Sunday 11th (December).

Mr Rodgers provides a full commentary below, detailing how the storm around the veto has overshadowed the immediate concerns that economic issues need to be addressed now in order to prevent a further recession in the eurozone.

“With around 40% of the UK steel industry’s sales going to other EU countries, and often going into complex pan-European supply chains, the Single Market is crucial for UK steel companies.

Ian Rodgers, UK Steel

However, the UK’s vetoing of the proposed Treaty amendments does nothing to change this. All the existing Treaty provisions and Single Market structures remain in place, with the UK able to participate fully in the decision-making processes in exactly the same way as before.  So in the short to medium term, the Prime Minister’s veto does not damage manufacturing.

There is a risk that in the longer term, with the UK not participating in meetings dealing with European economic convergence – potentially involving all 26 other Member States – the UK’s stature in Europe could be diminished in some way. This could spill over into fora where the UK does have a vote, including those dealing with Single Market issues.

Successive recent British governments have shown a leadership role in promoting the competitiveness agenda in Europe, for example, by promoting better regulation and helping push through amendments to Single Market legislation that might otherwise have proved over-burdensome to industry.  It would thus be unwelcome if this role were undermined, but it is too early to say whether, or to what extent, a loss of UK authority would weaken its voice in the large areas of EU activity where it will continue to have a role to play.

Angela Merkel, German Chancellor

What was most striking about last week’s decisions in Brussels was that they signally failed to address the most urgent problem – the present Eurozone crisis.  The new proposed  Treaty might help prevent such crises in the future, but does nothing for the present one. 

If the Eurozone were to implode or slide back into recession, this would be of far more immediate concern to UK manufacturing.  I am deeply concerned that Chancellor Merkel and President Sarkozy have yet to formulate a cogent economic and financial strategy to stave off these real and imminent risks.”