Thursday, 3 March 2016

The EU is deterring UK investment

This morning, 77 per cent of car-makers have agreed that remaining in the EU is "best for our business", and 59 per cent said that Brexit would have a "negative impact". What this actually tell us is that 77 per cent of car-makers need to sack their trade analysis and get better ones.

As The Leave Alliance points out, there is slim chance of the business environment changing in the slightest any time in the next ten years, which is enough certainty for anybody. If you want certainty beyond that, invent a time machine. More than likely we are staying in the EEA whether the leave campaigns like it or not. That means there will be no tariffs for car makers thus, at worst, no impact at all.

However, the "EU TTIP team" make the case far better than I ever could. One in four beverages on the shelves in the US is made by a small EU company. For them to get favourable trade they will have to wait until TTIP has been ratified which is anybody's guess, and since TTIP is hugely unpopular with a large number of MEPs and national parliaments, it may not pass at all. Certainly not this side of my 40th birthday - and it will be rejected on the basis of an entirely separate issue.

So in this, we have industries waiting years to get their produce on the shelves across the pond which hurts start-up micro breweries - and that is with no guarantee an agreement will ever be reached. Meanwhile, outside of the EU, there would be nothing stopping us talking to any number of countries to secure partial scope agreements on beverages where there would be no real technical, more or legal objection. We could already be enjoying the benefits of enhanced trade and if not with America then any number of South American states.

So really the lesson is clear for UK auto-makers. Not only is their European trade unaffected by Brexit, we could massively enhance the supply chains for components meaning cheaper imports for their assembly lines.

The only thing the EU can offer is is the near certainty that we won't have an agile trading environment - and so they will get the business continuity and stability they crave - but what that actually means is stagnation. Arguably, it is that which deters more investment in the UK. Were we to have a more agile approach to trade instead, we could see more manufacturing setting up in Britain due to the availability of skilled workers and the massive competitive advantage of having the single market but also an independent trade policy.

More to the point, it would allow the NHS to source cheaper medical equipment so long as it complied with international standards.  The Remain camp needs to spell out why the certainty of stagnation is better for British industry than being an independent trading nation with a strong voice at all the global top tables. I don't think they can.

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