roundtable
misleading ideals, fake promises said Philip Ryan, adding: “The Government seems very much ‘pen-behind-the-ear’, sucking its teeth, unsure of costs, not having sized up the quote yet.”
* EEF provides business briefings to help manage the likely Brexit impacts:
eef.org. uk/campaigning
Regulations and standards
Could manufacturing become less regulated post-Brexit, queried Murray.
Ryan: “Operating on a global basis it can’t be.” While post-Brexit UK could adopt its own regulations, he felt the Government had little idea of the scope and scale of EU legislation “to either bring across, or leave behind.” He feared the UK would suffer a double burden, a “two-speed regulatory system” covering Europe and the rest of the world world, if we failed to get any consistency after Brexit.
Nick Bion doubted Ryan’s regulatory burden. “I haven’t seen it so in the past 40 years.”
Lewis felt UK ‘ownership’ of standards was critical for globalised trading. “Post-Brexit we are going to have to adhere to product and trading standards, and hopefully they can be British standards, which are already well-recognised worldwide in many business sectors. If we lose that control over standards it could render our products irrelevant.”
Strutt: “It’s also about mutual recognition. We need to be an active partner in establishing, recognising and controlling standards.” EU regulations were a beneficial harmonisation, not burdensome.
Howard Clarke recalled pre-EU years with 20-page border-post carnets and “the absolute nightmare of trading with different European countries with their individual and incompatible standards. I would rue the day of going back there.” Staying within an EU-standard regime would enable greater freedom to trade.
Lane felt the focus should be on good parts of the UK’s EU involvement and “not going backwards to a more difficult world to trade within.”
Patrick King saw nothing changing immediately, “but a steady divergence over time, taking on more or less regulation as it suits us.” First up might be taxation and funding legislation to boost the UK economy and incentivise inward investment.
Common sense and the Eurovision Song Contest
Clarke highlighted EU funding for UK R&D projects. “Where will that come from post-Brexit? Worryingly, he had evidence that UK participants were already being
THE BUSINESS MAGAZINE – JULY/AUGUST 2017
excluded from joint applications for EU grants.
Lane stressed that current R&D incentives were very beneficial for high-tech industries, which fuel the economy. The overall UK tax regime needs to ensure such industries remain supported if such EU funding ceased.
While accepting this risk to the UK’s scientific R&D specialism, Ryan commented: “Let’s not forget that the EU trades with us too. We have market leaders, industry standards and national specialisms that are recognised by the EU and the world, plus a large consumer market for EU products.
“Don’t forget that balance. Maybe we are getting more worried about Brexit than the EU is? There will be brinkmanship, but in the end I think common sense will prevail and Brexit negotiators will agree common standards.”
King pointed out that both Brexit parties were starting from a common position – the EU Treaty. A fresh agreement wasn’t needed, merely negotiation on the level of UK divergence. “Once all the political posturing is over, we may well end up with much the same, but our own agreement.”
Strutt noted that non-EU countries such as Norway do still participate in EU projects. “Deals can be done.”
Smiling, Lewis added: “Australia now competes in the Eurovision Song Contest, doesn’t it?”
Will the future UK be the right place to manufacture?
“It depends upon the type of manufacturing,” answered Lane, suggesting a focus on UK’s world-leading design and engineering of high-value niche products, probably not “volume manufacturing of relatively low-tech and low-value products.”
Murray wondered if UK car manufacturing would continue as a net exporter – “618,000 cars every year to the EU, more than they export to us.”
“I think we will,” said Lane, citing the disadvantageous costs of closing and moving a car-making plant to Europe.
King agreed, highlighting that Nissan has decided to stay. Brexit would also enable fresh UK incentives for inward investors. However, some clients had already asked for feasibility studies on setting-up a European footprint.
Ryan: “We shouldn’t assume that everyone would go to Europe. They may stay put, go to the Far East or elsewhere.”
Bion pointed out that today’s manufacturing is increasingly reliant on large international supply chains – Europe
Continued overleaf ...
businessmag.co.uk 31 Richard Cooper Howard Clarke
Nick Bion
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