February 20, 2018 / 12:17 AM / 7 months ago

As clock ticks, UK manufacturers demand clarity on Brexit

LONDON (Reuters) - With little more than a year to go before Britain leaves the European Union, many British manufacturers are stepping up their calls for Prime Minister Theresa May and her government to explain what Brexit will mean for them.

Robotic arms load biscuits onto pallets on the production line of Pladis' McVities factory in London Britain, September 19, 2017. Picture taken September 19, 2017. REUTERS/Peter Nicholls.

Representatives of companies ranging from international chemicals producers to small engineering firms at an annual manufacturers’ conference on Tuesday complained of the uncertainty about their future trade relationship with the EU.

“It’s an absolute shambles. We need to know how it’s going to work,” said Stephen Wright, managing director of Thorite, which distributes compressed air products, typically made in Germany and France, to manufacturers in Britain.

At the moment, his firm orders components and receives them the next day. That might take longer if, as the government plans, Britain leaves the EU’s customs union as well as its single market, raising the prospect of increased border checks.

Wright said he wanted to know if he should plan to hold more stock or start searching for British suppliers.

Richard Melton, managing director of BSP International Foundations, which makes equipment to dig foundations for bridges, port jetties and other infrastructure, said he no idea if the components he imports from the EU and the finished goods he exports to the bloc will eventually be hit by new tariffs.

There were signs that his foreign clients were worried about the outcome of the Brexit negotiations too.

“For us at the moment, it’s all about the uncertainty,” Melton said. “Everything’s on ice as people wait to see what’s going to happen.”

URGENCY

May’s own ministers are split on what Brexit should look like. She is hoping to persuade her fellow EU leaders next month to agree to a deal that would keep Britain’s relationship with the EU unchanged for around two years while a new long-term trade agreement is hammered out.

Judith Hackett, chair of the EEF group which organised Tuesday’s conference, urged the government to ensure there was no slip-up on securing the transition deal.

“Secretary of state, I cannot stress enough the urgency with which we need clarity on any transition deal,” she was due to say in excerpts of a speech she will make later to attendees including business minister Greg Clark.

Britain’s trade minister, Liam Fox, declined to comment on the state of the negotiations with Brussels but he reiterated to the EEF that the government was determined to strike trade deals with fast-growing economies around the world.

Brexit supporters have long said British trade deals with countries including India, China and the United States would be one of the big benefits of leaving the EU, which has struggled to reach agreements with them.

But for many manufacturers, the EU is likely to remain their biggest export market and they are worried about the prospect of new barriers to trade, either from tariffs or the costs of any moves by Britain to set its own industry standards and rules.

“As much as some people would like to look at opportunities around the world, for us it’s a no-brainer to stay as close as possible to the market that matters the most,” said Steve Elliott, chief executive of the Chemical Industries Association.

Writing by William Schomberg; editing by Andy Bruce and Andrew Roche

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