Opinion: Euroscepticism is bad for UK manufacturing

In February 2012, Vince Cable flew to the US to meet with the Chief Executive of General Motors to make the case for why they should continue to invest in the UK for the long term. The BBC reported that the meeting may have played an important role in the company’s decision 3 months later to commit to invest in Ellesmere Port rather than at another of their EU plants.

It is lucky, perhaps, that this investment decision did not come up one year later. Vince would have had a few less cards in his hand. Michael Heseltine put it pithily over the weekend:

Why put your factory [in Britain] when you don’t know – and [the British government] can’t tell you – the terms upon which you will trade with [other EU countries] in future?

Another core UK industry, aerospace, is predicted to grow by 5% year on year for the next 20 years. It’s good government to try to get some or all of that 5% per year growth into the UK, hence the Industrial Strategy, the Regional Growth Fund and the Advanced Manufacturing Supply Chain initiative. However, this growth target is not easy to achieve. Britain needs the skills and it needs the ongoing investment to maintain its reputation. The last thing UK aerospace firms need is uncertainty over trade and markets, and for new investment to go abroad.

As Vince Cable said:

I have to spend my time talking to business people, British and international, trying to have the confidence to invest here and create employment, and the recent uncertainty is just deeply uncomfortable for the country. I think the warning shot across the bows from the United States was actually quite helpful as well as very timely.

At a business event recently, one very successful manufacturer and exporter talked of the flat-earthers – by which he meant some of his colleagues who always needed to be reminded that their foreign customers were just as important as UK customers; that successful exporting was about understanding other countries, their business customs and their people. He caricatured the companies where the export sales manager has a small desk in a corner of the office, and is mostly ignored.

Manufacturing accounts for 50% of UK exports. Euroscepticism of the Conservative or UKIP variety doesn’t sit easily with manufacturing. With a positive, constructive political role within the EU, the Lib Dems can demonstrate a politically distinctive commitment to UK manufacturing, growth and jobs.

* William Hobhouse is on the board of Liberal Reform and is co-founder of the Lib Dem Campaign for Manufacturing.

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5 Comments

  • “….. the Lib Dems, can demonstrate a politically distinctive commitment to UK manufacturing, growth and jobs.”
    Replace [Lib Dems] with [UKIP], and the above statement still works fine. The only difference is that one is happy to give their sovereignty to a European Super State, and the other, isn’t.

  • Richard Dean 16th Jan '13 - 12:34pm

    Yes, and it would perhaps have been even easier for the UK if we had been part of the Eurozone. But also, through this and other interactions with investors, VC must learn a lot about what investors’ criteria are. It would be nice if he could provide us all with the benefit of this experience, without political distortion.

  • “Yes, and it would perhaps have been even easier for the UK if we had been part of the Eurozone. ”

    Yes. But some people would prefer if we collectively cut off our nose to spite our face.

  • Richard Dean 17th Jan '13 - 12:10am

    That’s right. By participating more in Europe, LibDems will enhance the UK’s ability to control its future, and so its sovereignty. By isolating us, UKIP would throw that valuable part of our sovereignty away.

  • To the article – well why not just scrap elections and let big business take all decisions for the country.

    To the comments – You think Norway is democracy by fax – you should take a look at Greece (A very integrated member of the EU/Eurozone) – not really working out for them is it?

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