Manufacturers shifting production to EU ahead of Brexit

Survey by Manufacturers organisation EEF survey shows firms moving production abroad including to EU 27 countries from UK whilst association warns of a catastrophic prospect of no-deal.

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Relocate Magazine January 2019 Cover Read Now
A "significant" number of UK manufacturing companies have 'offshored' production and supply chains since the vote to leave the European Union in 2016, according to a new survey.

61 per cent of companies who have moved production abroad moved it to EU27

The survey of 428 firms by the manufacturers' organisation EEF - which announced on Tuesday it was changing its name to Make UK - showed that 61 per cent who had relocated production from the UK had moved operations to EU27 nations.Among those who had adjusted supply chains, 35 per cent had offshored with the EU27 again being the most common destination.Dame Judith Hackitt, who chairs Make UK, told the organisation's annual dinner in London on Tuesday that about half the firms in the survey believed leaving the EU with no deal would make the UK a less attractive location for manufacturing.

Manufacturers believe no-deal will damage the industry

She told the dinner guests, which included Chancellor of the Exchequer Philip Hammond, "I am saddened by the way that some of our politicians have put selfish political ideology ahead of the national interest and people's livelihoods and left us facing the catastrophic prospect of leaving the EU next month with no deal."This is not a prospect that our sector can counter. As our survey shows, companies have already taken action to move production overseas and the prospect of leaving with no deal means the UK will be a far less attractive location for manufacturing in the future."The clock has almost run down and it is now essential that the pantomime in Parliament ends and politicians of all persuasion come together to agree a deal that protects the future of manufacturing and people's jobs right across the UK."Let me be clear for the press and for those hard Brexiteers who accuse us of scaremongering. This is very real and very serious. The ninth largest manufacturing economy in the world needs to be assured that our contribution to UK prosperity is recognised and valued."

Low taxes and low energy costs seen a key to supporting manufacturing

The survey found that 49 per cent of companies felt a no-deal Brexit would make the UK unattractive as a manufacturing location, compared to 28 per cent who considered it would be more attractive.Looking ahead to a post-Brexit economic environment, 53 per cent of companies believed a lower tax burden would help encourage manufacturing activity in the UK, while 52 per cent considered a government commitment to keep energy costs at or below the EU average would also do so.A government spokesman said, "Leaving the EU with a deal remains the government's top priority. This has not changed. The government is continuing with our no-deal preparations to ensure the country is prepared for every eventuality. It is the responsible thing to do."Through our modern industrial strategy we are working to ensure the UK remains one of the most competitive high-tech manufacturing locations in the world. We have cut business taxes, slashed red tape and invested in new scientific infrastructure on a record scale."Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online DirectorySubscribe to Relocate Extra, our monthly newsletter, to get all of the international assignments and global mobility news.

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