What Would Be The Impact Of Brexit On British Manufacturers?

Great Britain is one of the world’s largest manufacturers but most of its industries are connected to the European Union. The manufacturing sector employs about 2.6 million people with an estimated 185,000 coming from the European Union member countries. Manufacturing also accounts for 44p for every one pound worth of UK export.

According to EEF, a manufacturing employer’s organization, 50% of Britain’s exports go to the member countries of the EU but 15% of the £11 billion investment made by EU each year on innovations eventually ends up in the UK. However, Business for Britain is campaigning for Brexit or Britain’s exit from the European Union based on the argument that manufacturers in the UK will be better off if the UK leaves the EU. According to Business for Britain, the EU failed to conclude free trade agreements with other countries like China and India which would benefit the UK manufacturers.

The European Union has clean energy policies that impose higher energy prices on British manufacturers compared to its American, Chinese and Indian counterparts. Emma Pullen who is the managing director of British Hovercraft Company is in favor of Brexit because she feels restricted by the EU policies that make it quite difficult to sell to European nations. Since there are no trade agreements in place with other countries, she has lost a lot of opportunities to do business with them.

Meanwhile, Paul Khan who is the president of Airbus UK believes that the manufacturing sector would be better off with the EU because of the tariff-free trade within the 500 million market would be very beneficial for both big businesses and SME’s. According to EEF, at least 85% of its members prefer to remain in the EU with 15% more intent on leaving. Poll findings suggest that there will be a big drop in manufacturing investment if UK will leave the EU.

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