Leaving the EU with no deal would spell disaster for Britain’s manufacturers, industry leaders have warned.
The manufacturers association, EEF, said that Theresa May’s “no deal is better than a bad deal” policy is “simply unacceptable”.
The trade body spoke out as the Prime Minister prepares to trigger Article 50 on Wednesday. It said crashing out of the Brexit negotiations would be a “lose-lose” for both Britain and the EU.
In a report published today, the EEF said manufacturing would be badly hit if it did not have access to the single market and the customs union. Manufacturers would be affected from day one if no deal is reached, the report stated.
The EEF report said falling back on World Trade Organisation rules with no deal in place, which could see tariffs of more than 5 percent on UK exports to Europe, was “simply unacceptable to an industry that accounts for 45 percent of all UK exports.”
EEF chief executive, Terry Sculoer, said: “The EU is our sector’s single biggest trading partner in a complex, tightly interwoven trading environment. Undermining the building blocks of this relationship – the single market and the customs union – without any other supportive structure in place would undoubtedly hurt our industry and condemn us to a painful and costly Brexit.
“The idea of being able to walk away empty-handed might be a negotiating tactic, but it would in reality deliver a risky and expensive blow. The rhetoric from the UK Government needs to focus instead on achieving a deal that will work for the UK and the EU.”
The EEF is calling for the government to ensure full WTO membership as early as possible in the negotiations. The trade body said that any new trade deal must maintain frictionless and barrier and tariff free access to Europe and allow the UK to strike trade deals in other parts of the world.
The EEF also called for a transitional period to allow manufacturers to adapt to any significant changes in the way trade is conducted.
Len McCluskey, general secretary of Unite, which has over a quarter a million members working in manufacturing, said: “With both the EEF and the Society of Motor Manufacturers and Traders now urging the prime minister to change tack, we now have two of the three biggest employers bodies warn that the government is treading a dangerous path.
“We have been saying this consistently for months. Workers and industry need to know that the prime minister’s top priority is to defend jobs and the economy.
“This means putting right at the top of her agenda safeguarding tariff-free access to the single market and the retention of bureaucracy-free arrangements we have within the customs union.
“Surely now the prime minister will listen. Investment decisions needed now to sustain our manufacturing sector into the future are not being made because of the uncertainty swirling around the economy.
“When unions and employers are both saying the same thing – that the instability that is being allowed to flourish at the moment must cease – the government must pay heed.
“They are bargaining with the jobs and living standards of the entire country. These are not to be thrown over the boat in a bid to satisfy the whims of the ‘hard’ Brexit fanatics.”