The ICAEW Manufacturing Special Interest Group event, “Would a British exit from the EU be good or bad for Manufacturing?” was held on Thursday 19 November at Thomas Dudley Ltd in Dudley, West Midlands, and led by ICAEW regional director Tom Madden.
David Smith, economics editor of The Sunday Times, addressed two basic questions in his presentation.
He first outlined a timeline for the forthcoming referendum, saying that we can expect a referendum bill to come before parliament in the next month. Next would be the renegotiation of Britain’s membership that David Cameron has initiated, which should be wrapped up by February 2016. The government will then set the date for the referendum in March, the date of which is likely to be next autumn. There are possible consequences of the British exit (Brexit) and the short-term economic consequences of a vote to leave:
It’s true, said Smith that anti-EU campaigners would see short-term losses as a sacrifice worth making but Brexit could also lead to Cameron being unseated as Conservative leader, followed by a schism in the party – and even a Labour win at the 2020 general election. Although the UK has become less reliant on the EU as a trading partner, around 45% of British exports still go to Europe. And as the balance of exports shifts away from manufactured goods to services (which tend to go to more advanced economies) a Brexit could prove problematic for the UK economy.Post-Brexit, trade deals with Europe will be possible, but not as easy as if we were still an EU member and it’s unrealistic to think that the UK will be able to continue trading as we do now.
The outcome of the negotiations will be a crucial factor, with four areas up for discussion.
In 2015, the Greek and migrant crises have exposed divisions in the EU and attitudes to EU membership are shifting. In the UK, two key drivers of attitudes to the EU are consumer confidence and the state of the European economy. In addition, UK citizens tend to be less enthusiastic about the EU than those of other member states and we have become more euro-sceptical in part because of concerns about immigration.
Smith summed up by saying that Britain should vote to stay in the EU – just. Only a small minority are committed to our exit and the British people are risk-averse (as the Scottish referendum showed), so the economic risks at the forefront of the campaign are likely to sway the vote but it could be close.
Craig Thomas is an experienced automotive journalist whose work has appeared in the Daily Telegraph, Daily Express, The Guardian, The National (Abu Dhabi), Auto Express, Auto Trader, MSN Cars, and the AA Magazine.
Manufacturing Group, December 2015