First thoughts
MACH 2020 exhibition organiser the Manufacturing Technologies Association (MTA) considers the
Conservative Party’s re-election from a manufacturing industry standpoint
WIktor Szymanowicz/NurPhoto/PA Images
The decisive victory for the
Conservative Party in England and
Wales, and in the overall result,
should lead to clear and decisive policy
making on issues vital to the machinery and
component supply chain.
The UK is now almost certain to leave
the EU on 31 January, along the lines of the
Withdrawal Agreement agreed in October.
Talks on a new trade deal will then
commence. Ensuring that the interests of
manufacturing are heard in that process will
be the key representational task of the MTA
over coming months.
The most important area of contention is
likely to be around the UK’s continuing
place in the European standards
architecture where the tone, if not quite yet
the substance, of Johnson’s government
has been more hostile than Theresa May’s.
The new government’s intentions with
regard to the EU should start to become
clearer. President Trump says the
Conservatives’ win leaves the UK and US
“free to strike a massive new trade deal”.
The manufacturing sector will be
pressing for close alignment with the EU.
Even the most all-encompassing Free Trade
Agreement (Canada ++) will involve more
friction and cost in moving goods and
providing services cross channel.
Acclimatising to that will be made easier
than in a ‘No Deal’ scenario by the 11-
month transition period: but pretty much
every expert on trade policy believes that a
deal cannot be done in that time. (Ed: Prior
to the Prime Minister’s pledge to outlaw any
extension, the MTA said that business would
lobby for an extension.)
With UK growth having slowed, and then
stalled completely in October, there are
hopes that investment will start to pick up
next year. The relative performance of the
UK and the rest of the EU will be watched
with great interest.
The continuation of the Union is also
MANUFACTURING SECTOR BREXIT CONTINUED
less rm. For the rst time, Irish nationalists
make up the majority of Northern Ireland
MPs. This will intensify scrutiny of the
arrangements for goods owing between NI
and the rest of the UK and may have wider
implications. Scottish nationalists once
again make up the majority of MPs from
Scotland, intensifying calls for a second
referendum on Scottish independence.
On the domestic economic policy
agenda, there was relatively little in the
Conservative manifesto to signal a dramatic
departure from the recent past, slightly
ominously the only explicit mention of
‘manufacturing’ was a pledge to help the
Welsh automotive sector. The sections on
innovation were more positive, with
commitments to move to spending 2.4% of
GDP on R&D and to look at extending the
scope of the R&D Tax Credit. More funding
was pledged for skills and upgrading Further
PM Boris Johnson likely has
fi ve years ahead, backed by a
majority of 80 in Parliament.
The shape of Brexit is yet to
be determined, but the hard
Brexit-favouring European
Research Group has less
infl uence than it did.
Big spending plans have
already been signalled,
backed by a £100bn
infrastructure fund.
The Northern Powerhouse,
the Midlands Engine and
HS2 are all likely recipients.
And there will be a £33.9bn
a year increase in the NHS
budget by 2023-24,
enshrined in legislation
Education facilities and there was a promise
to make the visa system more responsive to
employers’ needs.
The need to adopt new, digital
technologies, exempli ed by ‘Made
Smarter’, could potentially chime with the
new government’s objectives, but that may
be tempered by a concern that a
government in possession of such a large
majority will not feel as bound to adopt as
collaborative an approach as we have seen
over the last three years.
Westminster is likely to see at least a
partial return to an environment in which
government is freer to do as it sees t, an
environment where trade associations and
other bodies will have to think carefully
about how they approach the task of
representing their members’ interests
without being reduced to shouting from the
side lines.
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