An exciting future for UK Manufacturing inside the EU Single Market

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Yesterday,  I got together with fellow CEO’s of Airbus and GKN, Paul Kahn and Nigel Stein, for a press conference, specifically on the future of UK manufacturing in relation to the EU referendum.

We represent three very strong UK manufacturing organisations, and together employ 35,000 people directly in this sector here.

We were joined by Vince Cable, Former Secretary of State for Business, Innovation and Skills, who reminded us of the importance of UK’s manufacturing sector. Our Sector is responsible for nearly half of all of UK’s exports and two thirds of all Research & Development spend of UK Business, making manufacturing Britain’s key productivity and innovation engine.

Amber Rudd MP, Secretary of State for Energy and Climate Change, also spoke: “The future of job creation in this country, which means financial security for working people and their families, requires us to be in the single market, and yet leaving the single market is sole economic policy the Leave campaign has committee to.”

All of us speaking at this event have indeed become very concerned that the Leave campaign want to leave the single market, but believe that we can ‘retain access to it’. With our combined long term experience of operating within the Single Market, we don’t think this is realistic or achievable – and we want that message to be heard – that leaving the Single Market would be damaging for our industries future.

We however kept this conference very positive, as we want to see beyond the doom, gloom and scare stories of the current debate.

We, some of the leaders of our sector, very much look forward to a future of optimism and excitement. And let me explain why that is.

There are great things happening in manufacturing with huge opportunities in exciting technologies, like driverless cars; space technology, electric propulsion on aircraft just to mention a few.

This is where the jobs, skills and growth of the future for our industry are and we want to see more of that taking place here, in the UK.

However, the regulatory frameworks and research collaborations in these areas require scale and the big players – the EU, China and USA – are leading the way.  Outside of the EU, the UK will be less influential in those discussions and we will have to play by other people’s rules if we want to sell to them.

One such example is our brand new wind turbine factory in Hull, that will produce off-shore wind turbine blades and is creating 1000 new jobs.  We and the wider industry, are very keen to use this as a catalyst to build a much bigger industry in the Humber region and beyond. New engineering and service companies as part of our supply chain, and an innovation and skills centre creating technology of the future, that will enable the region to compete on a global stage and start exporting this technology at scale. We however can’t do this alone, we will need to collaborate with other EU countries, especially Germany and Denmark.  Inside the EU this is very easily possible.  Outside much less so.

So being very clear on this, I strongly believe that being outside the EU will count against the UK when investment decisions are made and we would miss out on these fantastic, future opportunities and the jobs and economic prosperity that will go with them.

And let me also explain why being a fully paid up member and inside the single market is so important, by using some practical examples.

Early in my career, as a factory manager, I remember the days when we used to have to put a different widget on every component that we shipped: a different one to Italy, a different one to France, a different one to Germany.

Today, working with other countries, through the Single Market, the UK plays a leading role in shaping industrial standards.  This has seen us reduce the number of standards in this area from 160,000 standards down to about 19,000 today.  In many cases 28 national and often protective regulations have been replaced with a single one.  Just imagine how this has enabled factories to become more efficient and hence bringing consumer prices down.

Creating this level playing field of standards has also had a real impact on everyday lives, but we tend to forget these.

EU Regulation and standards have massively improved the environmental impact of business and consumers here in the UK.

On a more personal level,  I remember how British beer was shut out of German markets because of the restrictive beer purity laws there.  That’s no longer the case because of Single Market rules.  I recall coming to the UK from Germany in 1974, when showers were not the norm in many British homes. I wanted to install a German made power shower but that wasn’t possible due to restrictive UK plumbing regulation.  Maybe you can remember the gravity fed hot water systems that were the British Standard back then, that meant our showers were a strong dribble at best. EU harmonisation of regulations brought power showers to the UK!

These may sound a little trivial, and sometimes amusing, but there were many, many other examples of such barriers to trade that have been systematically broken down by the Single Market.  Sure, this has created a bureaucracy, as these negotiations are complex and take a long time, and sometimes the EU has got a little too carried away with high profile examples of bananas and kettles, but we don’t hear of the 80% that have created a better and fairer EU.

To be clear I’m not advertising for lots more regulation. I have become very British and quite dislike it too, but the fact is, like it or not, it is just part of grown up responsible business.

So, my position from this event is clear: being part of the EU is good for the UK economy. We see no economic upside from leaving.  The EU is not perfect, but the benefits far outweigh the costs, and the notion that we can leave the single market but retain all of its benefits is delusional.

And in conclusion, our message yesterday was a simple one:  British manufacturing is stronger in the EU’s single market.

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