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15 January 2018

Financial Times: Two-year Brexit transition too short, says EEF chief


A two-year separation is not nearly long enough for the UK to adapt to leaving the EU, according to the new head of the country’s biggest manufacturing body.

Stephen Phipson, chief executive of the EEF, which represents 20,000 UK manufacturers, said the transition period mooted by the government was “not even slightly” long enough to reach a settlement on Brexit.

The government has proposed an “implementation phase” that would delay full departure from the bloc until 2021, during which the UK would still have unfettered access to the single market while a trade agreement is thrashed out between the two sides.

“Two years is really challenging, so we do need a standstill for longer,” said Mr Phipson in his first interview since joining the EEF in December. He declined to say how long the transition should last, however.

British manufacturing is enjoying its longest stretch of monthly expansion for two decades, as companies benefit from rising global expenditure on equipment and machinery and the weaker pound boosting exports. This has spurred hopes in some quarters of a long-awaited “rebalancing” of the economy away from services and consumer spending.

However, the new EEF boss warned that sustaining that recovery would depend on several factors, including access to EU labour — a political flashpoint given the government’s commitment to cut immigration.

Mr Phipson said manufacturers were seeing a steep decline in the number of job applicants from the bloc. With some 330,000 people — or 11.5 per cent — of the sector’s workforce made up of EU nationals, the drop put the recovery in UK manufacturing at risk, he said.

Small and medium-sized enterprises (SMEs) in particular — some of whom rely on EU workers to fill up to half their skilled roles — were having “immense difficulties” recruiting from the bloc, he added.

Mr Phipson also raised the alarm over the impact of Brexit-fuelled uncertainty on corporate investment. Big businesses in the sector were shying away from committing capital because of the uncertainty about the outcome of exit negotiations, he said, with potential knock-on consequences for their network of suppliers. [...]

Full article on Financial Times (subscription required)



© Financial Times


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