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Brexit raises new challenges

A huge week for the UK has raised new Brexit issues and we would welcome feedback from members.  Jack Semple, secretary of the Engineering and Machinery Alliance, who is covering for Paul O’Donnell over the next month, looks at the issues for business.

The Withdrawal Agreement Bill passed its 2nd reading in a rare Saturday sitting of the Commons – meaning that it could pass to the next stage.  MPs rejected an attempt to curtail the timetable for debate and the Bill can be subjected to intense scrutiny and to amendment. 

Aspects of the new Withdrawal Agreement (WA) with the EU that stand out include arrangements for Northern Ireland.  Creation of a customs and regulatory border between Northern Ireland and Great Britain would call into question the UK’s own Single Market. Some firms believe that additional costs will make it too expensive for them to do business between these two parts of the country.

Also changed from Theresa May’s deal is the binding commitment to a level playing field with the EU, which appears instead in the non-binding political declaration; and the UK definitely leaves the Customs Union after December 31st 2020.  The future relationship does not look close to offering frictionless trade.

Uncertainty has much increased, as to what the UK’s future relationship will be with the EU. The government’s vision is that we can stay close to Europe where that suits our economy and, at the same time, conclude transformative trade deals with other countries – most obviously the US – and gain global influence as a champion of free trade.

Whether or not this is feasible, and over what timescale, has been little-debated.  In our vital sector of the economy, as in other sectors, we need to hear much more about the benefits that this independent policy would bring.   

Forced to choose between the EU and elsewhere, what choice would the UK make?  Manufacturers, overwhelmingly, have said that they want to stay close to EU regulations and standards, and to ensure frictionless trade; and that to move away from these will damage the industry.  This is the MTA’s position.

But it is far from clear that this is the direction the Johnson government would to follow and there are fears that it may have a very different agenda in mind.  Given that governments change, it is worth noting the importance of a post-Brexit UK arriving at a settled trade policy, as other independent and successful countries have. 

The MTA is actively considering, with other business groups, how best to respond to the evolving challenge of Brexit and to ensure that the manufacturing sector remains a strong influence on government, in the national interest. We are doing so both in terms of the immediate challenges and post-Brexit, when we will be asked what we want from trade deals, and why, as never before – for at least 40 years.

We would welcome members views, for example by email to public.affairs@mta.org.uk