23.04.2018

Almost two years on from the Brexit vote, manufacturers still know very little about how the future business landscape will look for those employing overseas staff, importing products and exporting their goods to the continent.

EEF is lobbying government on a number of key areas including: access to key markets for goods and services, ensuring regulatory certainty, addressing the UK skills gap and having domestic policy focused on shoring up investment.

These key lobbying areas reflect members’ needs and concerns, with EEF research showing access to EU workers is of particular importance to UK businesses. 76 per cent of manufacturers currently have at least one EU national working in their business, and EU nationals currently make up 11 per cent of the UK’s manufacturing workforce.

As part of the recently proposed 21-month Brexit transition period with the EU*, workers arriving in the UK during this period will enjoy similar settlement rights to those already in Britain, but figures show net migration to the UK is on the wane, so what can manufacturers do to plan for the unknown and the effects that the uncertainty is already creating?

Tackling the shortfalls

At EEF’s National Conference in London last month, Jason Muller, Global Manufacturing Director at Dorset-based handmade cosmetics manufacturer Lush, outlined how the company had been planning ahead to address potential skills shortfalls once the UK leaves the single market.

“Part of what came through from Brexit was staff wishing to move countries,” he said. “Germany was a choice where we had just set up a manufacturing base. People didn’t know whether they could stay within the UK and build their life so we relocated them and paid for their costs.”

He said the firm has also worked with experts to discuss what the vote may mean for those workers who have already built their lives in the UK.

“Part of what we have also done across the business is go out to schools and job fairs and invited schools and colleges in to show what we do in different areas so we have staff in place if there is a shortfall.”

Supply chain mapping

But manufacturers are not just planning for potential labour shortfalls created by the Brexit vote and many are looking at the flow of goods to and from the EU which could affect their business.

One member company within the North West is increasing its inventory levels to mitigate its concerns over potential disruption in supply of raw materials from an EU country. Another has recruited new members to its finance and admin team to look specifically at Brexit implications.

Richard Halstead, EEF Membership Engagement Director - North, advises manufacturing companies to plan for the most likely Brexit outcomes: “The issue is that we do not know the outcomes are going to be, therefore Brexit is hard to plan for.

“We can be pretty certain it’s going to be a unique deal with some sort of customs bureaucracy or tariff management so it is important to look at supply chains and the internal capacity to manage those if there are trade borders put in place. We would advise manufacturers to act now.”

*NB. The agreement on the 21 months transition period is still subject to the final ratification of the Withdrawal Agreement with the EU which is still under negotiations with agreements on issues such as the Northern Ireland border still to be concluded.