theresa may industrial strategy

UK manufacturers opposed to Theresa May’s ‘no deal with the EU’

The UK manufacturers’ organisation, the EEF, has expressed its concern about the possible consequences of a ‘no deal’ post-Brexit scenario.

The industry body for manufacturing and engineering has warned about the likely consequences of Britain and the EU reaching ‘no deal’ after Brexit, as has been suggested by Prime Minister Theresa May.



In a briefing paper published today, the EEF expressed concern that a ‘no deal’ scenario after Brexit would result in loss of access to the single market and customs union, negatively affecting the British manufacturing sector.



Between April 2015 and April 2016, 52 per cent of all British manufactured exports went to the EU. Although the UK is currently the ninth-largest industrial nation in the world, British industry is very much linked to its trading relationship with the EU.

Terry Scuoler, CEO of the EEF, said: “The EU is our sector’s single biggest trading partner in a complex, tightly interwoven trading environment. Undermining the building blocks of this relationship – the single market and the customs union – without any other supportive structure in place would undoubtedly hurt our industry and condemn us to a painful and costly Brexit.”


Many see Theresa May’s ‘no deal is better than a bad deal’ position as a strategy for negotiation, to try and obtain a more favourable deal with the EU.


Scuoler said: “The idea of being able to walk away empty-handed might be a negotiating tactic, but it would in reality deliver a risky and expensive blow. The rhetoric from the UK Government needs to focus instead on achieving a deal that will work for the UK and the EU.”   

The consequences of not having a deal with EU could be extremely severe on the UK, with financial experts interviewed by Bloomberg predicting that the pound could drop even further towards $1.15 (compared to its $1.58 value at the time when David Cameron first announced the referendum).



No deal would most likely mean no time for the manufacturing and export industry to adjust to Brexit, with the UK immediately revoking tariff-free trade with the EU and having to pay World Trade Organisation (WTO) tariffs. 

In the briefing paper published this morning, the EEF also warns that ‘no deal’ could mean changes to inwards processing relief and customs warehousing arrangements.

A ‘no deal’ scenario could have detrimental consequences on the UK manufacturing industry, as the EU is currently the market for 45 per cent of Britain’s overseas sales.



Several companies have already started considering re-location to limit Brexit-related costs and last week EU Chiefs advised UK-based airlines such as EasyJet and Ryanair to relocate their headquarters if they wish to continue flying to Europe after Brexit.

The EEF thinks collaboration between the Government and industry is crucial to minimise costs and uncertainty.

 “Brexit will be the most complex unravelling that any UK Government is ever likely to have to undertake and Government will need the help of industry to identify, understand and mitigate the implications,” said Scuoler.

For the EEF, reaching a defined position on UK customs arrangements is key, as is achieving full WTO membership and allowing a transition period for the British industry.

Scuoler added: “It is going to be tough, but we must focus on developing a strategic approach that aims to preserve frictionless trade while building a launch-pad from which the UK can secure ever more ambitious deals from around the world.”

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