EEF report: Brexit must be carefully-engineered to safeguard industry and secure new trade opportunities
A new report out today from EEF, the manufacturers’ organisation, and Squire Patton Boggs, the global law firm, spells out manufacturers’ key priorities for the upcoming Brexit negotiations and urges the Government to avoid rushing through a ‘clumsy’ Brexit plan which would do lasting damage to UK manufacturing and the wider economy. It is to expertise like this that the government needs to listen, not unreasonable MPs and campaigners calling for a swift clean break and hard Brexit, which would be an act of national self harm.
The report calls for a measured and considered approach and although it doesn’t necessarily demand membership of the Single Market, it pours cold water on the fantasies of those who are calling for an immediate “bonfire of regulations”. Rob Elvin, partner at Squire Patton Boggs, comments that to fulfil the ambition of ‘confirming the UK as one of the great trading nations of the world ‘requires regulatory stability’. Therein lies the key; stability. A smooth transition and stability should be the Government’s priority. We need a soft landing and a secure platform to build on. From that strong position of safety and economic security we can reap the benefits of independence over time.
Britain has undergone forty years of integration with the EU. There is not a single area of Government policy not touched by EU law. Nearly every aspect of the day-to-day business dealings of every sector is affected by EU rules and regulations. Unpicking this is going to be mind bogglingly complex and it is going to take time. This is why, as the report states, manufacturers and exporters would clearly prefer for the UK to absorb much of the existing regulatory framework in the first instance.
Claire Jakobsson, Head of Climate, Energy and Environment Policy at EEF, did say that ‘in the longer term there is clearly an opportunity to pull back from EU regulation where it does not work for the UK’. There will clearly be opportunities to repeal laws and deregulate in some areas; but this requires a careful and considered review of the statute books over time and there will be no dividend in the short term.
Even then, a high degree of regulatory equivalence with the EU will be essential to unhindered trade. The idea that we should repeal and replace EU regulations en masse with UK legislation is nonsense; it would be costly and disruptive for little to no benefit. When surveyed, 73% of manufacturers said that one set of trading rules and regulations across Europe is an advantage, with 71% believing that the single regulatory and legal environment lowers the cost of doing business. Regulatory equivalence facilitates “free” trade thereby increasing prosperity.
While the report recognises the concerns on tariffs, it makes the important point that non-tariff barriers, or “technical barriers to trade” are as significant as tariffs, which is lost on those calling for a hard Brexit. Due to the fact that the EU is a major export destination, it emphasises that unrestricted access to the single market in goods and services is, for EEF members, vital.
It also calls for the Government to maintain the UK’s access and collaborative support for investment and innovation through programmes such as Horizon 2020, even if this means continued payment. This will lead to complaints from the uncompromising Brexiteers, but why? Where international collaboration is mutually beneficial we should continue with it and any payments made pale in comparison to the advantages gained.
Our future relationship with the EU will be a close one of intergovernmental cooperation, continued economic integration and collaboration across a wide range of activities such as security, science, aviation, sport and academia. The extreme Brexiteers and doomsday Remainers who said this will all end are both wrong.
Overall the report was constructive, reasonable and – pleasingly – rather positive. There was no doom and gloom, but plenty to back up the moderate and Liberal Brexiteer’s case, and enough optimism to cheer a worried Remainer of two. Manufacturers are keen to seize post-Brexit opportunities for increased global trade through new free trade agreements. Terry Scuoler, CEO of EEF, said:
‘Manufacturers see great opportunity for jobs, growth and wealth generation from the expansion of global trade outside of the EU. These ambitions tally with those of the Government and the voting public, who want to see post-Brexit Britain exporting and manufacturing more, as well as achieving a better balanced economy’
The UK has a successful and prosperous future ahead of it; but we must ignore the extremists and manage our transition out of the EU sensibly. As long as the Government listens to the sensible voices offering constructive advice and criticism, we will make as success of Brexit.
Ben is the Conservatives for Liberty Online Director. Follow him on Twitter: @TheScepticIsle
The views expressed in this article are that of the author and do not necessarily reflect the views of Conservatives for Liberty