Leaving the European Union would be likely to have a negative effect on the UK engineering sector, exacerbating the country’s well documented skills shortage and leaving question marks over other areas including research funding, according to the IET.
If the UK withdraws from the European Union and decides to limit free movement of European workers, as requested by many Brexit proponents, engineering and technology companies will probably struggle to cover their vacancies, as domestic engineers are in short supply. Moreover, the sector will face uncertainties as the EU may in return exclude the UK from the tariff-less single market and restrict its access to collaborative research and innovation projects and funding.
“UK engineering is deeply integrated with global markets and companies, and the period of uncertainty about the terms on which access to these would be granted to UK companies after a decision to leave the EU is a threat to the sector,” said IET President Naomi Climer in a statement.
“Given the considerable challenges already facing UK engineering and technology, it is difficult to justify the unknown and unquantifiable transition risks if we were to leave the EU. While it is possible that these effects could be mitigated by other trading and collaboration arrangements after an exit from the EU, there are no guarantees.”
The restriction of free movement could, for example, be offset by a simpler visa process for recruiting engineers. However, manufacturers and the industry in general are not in favour of such a solution as it puts pressure on employers.
“You have to conduct the Resident Labour Market Test to prove that you can’t recruit those people in the UK, which is quite frankly just a burden and a delay,” said Tim Thomas, director of employment and skills at the manufacturers’ organisation EEF, which is a vocal supporter of continued EU membership. “You then have to apply for a certificate of sponsorship from the Home Office and the minimum salary you have to pay is £35,000.”
Brexit supporters also believe that the UK will be able to strike a free trade deal with the EU, similar to the one signed with Canada, which would not involve free movement.
Either way, the UK would completely lose its influence over EU decision-making and setting of standards, which affect engineering products and services. Essentially, if the UK wanted to continue trading with the bloc, it would have to comply with standards set by others while not having any influence over them. About 45 per cent of the UK's exports currently go to EU countries.
“Designing equipment to meet global standards is how companies access world markets,” says the IET statement. “Taking mobile communications standards as an example (in which the EU, with strong UK input, has led the world), the UK could not create its own standards and expect to have them honoured in any significant market, nor would it be able to influence the European standards.”
As a result, the UK might lose its leading role and ability to be among the first to enter new markets.
“For this reason, the interests of engineering and technology may be best served by the UK remaining within the EU,” Climer said. “We are calling for urgent discussion on the impact of an exit decision on a sector that is so vital to our country’s economy.”
Engineering companies including Airbus, Siemens and Caterpillar have supported the IET’s statement.