UK industry calls on new PM to reset EU trading relationship

The UK regions and nations that voted for Brexit have increased their dependence on the EU for manufacturing exports, while the European market remains the overwhelming favoured destination for the sector.

The findings come from the Annual Regional Manufacturing Outlook published by Make UK and business advisory firm BDO.

The report examines the contribution of manufacturing to the economies of every English region as well as the devolved nations. It analyses both the most recent official data, as well as Make UK’s own quarterly data across a wide range of indicators including output, orders, employment, investment intentions.

The analysis of official data from 2021 shows that the EU remains overwhelmingly the dominant market for UK goods with an overall average level of 49% of exports going to the bloc. Wales (60%), the North East (58%), East Midlands (51%) and East of England (48%) all saw their share of manufacturing exports to the EU increase while Yorkshire & Humber (57%) stayed the same. The South West, Scotland and Northern Ireland also saw their shares increase.

Given the fact the EU remains by some distance the most important export destination for UK goods Make UK believes it is essential the new prime minister takes immediate and positive steps to renew the trading relationship with the bloc and renews additional support to boost exports, especially for SMEs.

The trade body says this must include:

1. Taking immediate steps to come to a mutual understanding with the EU on the Northern Ireland Protocol which avoids significant shocks to trade with the EU and provides a clear and stable business environment
2. Easing the friction around the CA/CE marking regime by allowing CE marketed goods to be continually recognised on the GB market for as long as the rules in the UK have not diverged and remain the same
3. Re-establish the SME Brexit Support Fund and other targeted schemes that will enable firms to respond to new market regulations in GB and other changes to trade with EU that will come into effect in 2023. In a recent Make UK survey almost a quarter (22%) of manufacturers cited support for exports as one of the top three ways Government could help them grow their business.

Commenting, Verity Davidge, director of policy at Make UK, said:“Despite the talk of ‘Global Britain,’ history shows that geography is always the main determinant of trade. The EU was always going to remain the main destination for manufacturers who appear to becoming more, not less, dependent on it as a market. As a result, it is vital the Government now takes steps to reset the trading relationship with the bloc and, wherever possible, eases and simplifies trading to boost exports for SMEs in particular.”

Make UK
www.makeuk.org