Plant & Works Engineering
The clock is ticking...
Published:  09 February, 2018

2018 will be an interesting year to say the least. The next few months will be especially important for UK manufacturing as the Government seeks to negotiate a transition deal with the EU, which is of critical importance for industry.

Although the potential risks which Brexit has exacerbated feature prominently at the forefront of manufacturers’ minds in a recent EEF/AIG Executive Survey, there is no evidence that companies are, as yet, planning to relocate large parts of their operations to the EU or elsewhere. But this may change quickly if the Government doesn’t get its act together.

Whilst 7% of companies are planning to move production to the EU and 6% to a non-EU location, a slightly greater proportion (12%) are planning to move production back to the UK from the EU whilst 22% are planning to step up their investment in the UK.

However it is essential that business is provided with clarity on a transition deal as a matter of urgency if companies are not to trigger contingency plans. Despite the successful move to a second phase of talks, there remain considerable hurdles to surmount to provide business in the UK, and across Europe, with the necessary reassurance. This concern has been highlighted by leading UK business groups who have jointly called for an agreement on a transition deal as soon as possible.

The joint industry group statement emphasised that a transition period must now be agreed as soon as possible, to give businesses in every region and nation of the UK time to prepare for the future relationship. It continues that further delays to discussions on an EU-UK trade deal could have damaging consequences for business investment and trade, as firms in 2018 review their investment plans and strategies.

Many in industry agree with Josh Hardie, CBI deputy director-general, who said recently that early agreement on transition will allow negotiators to get on with the real task at hand - an ambitious new future economic relationship which preserves barrier-free access to European markets while respecting the Referendum’s call for more control.

The emphasis over the next few months must be on securing a status quo, jobs-first transition deal between the UK and the EU, which needs to be agreed by March to give businesses the certainty they need to continue growing.