T: 01249 460 606

03 Mar 2016

EU Referendum: How will a Brexit affect UK Manufacturing?

EU Referendum: How will a Brexit affect UK Manufacturing?

On Thursday, 23rd June there will be a referendum on whether Britain should remain a part of the European Union.

EEF research has shown that 85 per cent of UK manufacturers would vote against a Brexit, whereas just 7 per cent would vote for. This figures rises to 90 per cent amongst manufacturers who employ over 250 employees. Many believe that a Brexit could threaten the success of Britain’s manufacturing industry, which currently employs over 2.6 million people.

If Britain does leave the European Union, it could lose access to the Single Market, meaning that manufacturers could face a 10 per cent tariff on exports to the EU, the same as non-EU countries. It has been speculated that a Brexit would cost UK car manufacturers alone around £1.2 billion a year in tariffs. Upon a Brexit, Britain would have to negotiate a new trading relationship with the EU to continue to sell goods and services, without being hit by these hefty tariffs and other restrictions, which could take some time.

Some potential models for these negotiations are:

The Norwegian model: 

Britain would leave the EU and join the European Economic Area. This would give Britain access to the single market, with the exception of some financial services. Britain would be free from EU rules on agriculture, fisheries, justice and home affairs

The Swiss model:

Switzerland, which is not a member of the EU, negotiates trade treaties on a sector-by-sector basis, which Britain could emulate.

The Turkish model: 

Britain would enter into a customs union with the EU, allowing access to the free market in manufactured goods but not financial service. 

 Brexit

Even with many companies complaining that burdens, such as complex regulations and the uncertain future of the euro comes with EU membership, the vast majority would vote against Britain leaving the EU.  Many small and medium-sized manufacturers who supply larger companies, such as Siemens, would still have to comply with EU regulations regardless of the outcome of the referendum, or risk losing their contracts.

Car manufacturing giant Toyota has stated they are committed to building cars in Britain regardless of the outcome of the referendum. However, in contrast BMW have warned against a Brexit, with research by the Bertelsmann Foundation showing that 29 per cent of the 700 German businesses surveyed would either reduce capacities in the UK or relocate altogether in the event of a Brexit.

Contact Us

Related Articles

The Engineering Skills Gap – What is the Solution?

The Engineering Skills Gap – What is the Solution?

21 Feb 2014

“Engineering is about turning ideas into reality, changing and shaping the material world for the benefit of humankind. To do this, an engineer must be able to apply technical and scientific knowledge to a problem while also working through the cost, sustainability and socio-economic implic...

Read more...

4 Ways to Eliminate Unscheduled Downtime on the Factory Floor

4 Ways to Eliminate Unscheduled Downtime on the Factory Floor

13 Mar 2015

It is imperative that manufacturers keep their factory running efficiently at all times, an issue that we at Fascia Graphics (who manufacture membrane keyboards, graphic overlays and screen printed labels) know about all too well.
When disruptions in production occur you need to react to them as ...

Read more...

How to get UL Approval

How to get UL Approval

02 May 2014

UL is a global independent safety science company, who innovate safety solutions. From public adoption of electricity to new breakthroughs in sustainability, renewable energy and nanotechnology – UL is one of several companies approved by the US Federal Agency Occupational Safety and Health...

Read more...

Fascia Graphics Celebrates 20 Years in the Industry

Fascia Graphics Celebrates 20 Years in the Industry

14 Feb 2014

2014 is promising to be an exciting year for Fascia Graphics® and its staff, with the company celebrating its 20th anniversary next month. Fascia Graphics® a manufacturer of Membrane Switches, Graphic Overlays and Screen Printed Labels was established in 1994.
 
Fascia Graphics® ...

Read more...