7 April 2019

Make UK's CEO, Stephen Phipson has written to the Prime Minister and Leader of the Opposition calling for article 50 to be revoked if the government can not agree a deal to pass in Parliament. Full text of the letter can be found below:

Dear Prime Minister and Leader of the Opposition

It is clear that we are facing a moment of great challenge as a nation. We welcome the efforts that you, and others across Parliament, are making to find a consensus. We recognise the heavy burden that many are carrying at the moment as you try and achieve agreement on an issue which divides opinions so deeply and powerfully.

It is equally important to acknowledge the burden faced today by manufacturing businesses and the people who work for and with them, in every constituency across the country.

In recent years manufacturing has enjoyed a renaissance. Our sector directly employs almost 3 million people and indirectly supports many more. Manufactured goods account for almost half of all UK exports, and the EU is our largest market. Our sector is a high quality employer: wages are well above the national average, many employees work in hi-tech environments and our commitment to comprehensive apprenticeships, training and up-skilling is second to none. Make UK is proud to have played a leading role in  manufacturing and engineering for over 100 years, and today we represent the interests of over 20,000 companies employing over a million people.

There are many reasons for this resurgence. Foresight, investment, innovation, entrepreneurship and simple hard work are key. But in addition, for many of our members, access to the single market, facilitated by a customs union has been critical to their success. We lead the world in maximising the benefits of techniques such as just-in-time delivery and set the global standards that others seek to match. As a result UK business is at the heart of supply chain relationships that span Europe. Parts and equipment cross the English Channel and our border with Ireland many times as they evolve into a finished engine, wing, or satellite. Our automotive sector is world class - more cars are produced in Sunderland alone each year than by the entire Italian car industry. The loss of the operational and trading benefits that have delivered this success would be a blow; to lose access overnight in the event of a no deal exit from the EU would be disastrous for the majority of  UK manufacturers and the livelihoods of the millions of people they employ and their families. Domestic agrifood producers, particularly in Northern Ireland could be decimated by this and consumers across the UK would lose out as a result.

Nonetheless, over recent months, manufacturing businesses have had to start preparing for this eventuality. To retain vital contracts or win essential new business, firms have had to build up months of stock, tying up all their working capital and exhausting their lines of credit. The risk of no-deal and the resultant severe capacity constraints across essential shipping routes such as Dover - Calais would prevent them from operating in their normal way and would lead to contracts being forfeited and jobs being lost. Many of the families supported by our sector would undoubtedly suffer. There is already a tangible impact in the confidence of some Boards to invest in UK operations and other companies tell us that they cannot agree new contracts with European customers until the terms of trade with the EU have become clearer. As a consequence, many fear for their long term viability and the futures of their staff should we leave without a deal.

As a result, we call on you to ensure that the consensual agreement you seek takes the risk of no deal completely off the table and delivers the 4 key tests we have long campaigned for:

• frictionless trade
• regulatory alignment
• access to labour; and
• a lengthy transition period that allows business time to adapt to change

The manufacturing sector would strongly support an agreement which took the foundations of the existing Withdrawal Agreement and Political Declaration but built on them with a strong and definitive position on our future relationship with the EU that guaranteed these outcomes. However, the majority of our members have told us, in no uncertain terms, that the current situation of short term extensions and prolonged ambiguity cannot continue. Should a Parliamentary majority not be achieved this week, or agreement not reached with the EU at the emergency Council meeting, we cannot continue to take damaging short term decisions or risk a no deal departure. In this scenario, Make UK is calling for the Government to revoke Article 50.

We make this call not to thwart Brexit, but instead feel that it is critical for the future of UK manufacturing businesses and their workforces that we bring the current uncertainty to an end. This will allow the Government and Parliament to reflect on the future calmly and carefully and without the artificial pressure of a short deadline driving us towards a no deal exit. We support the democratic outcome of the referendum, but believe that if an agreement cannot be reached next week, it is now time to acknowledge that the current process has not worked and must be halted. This will allow business to plan for the immediate future with some confidence and remove the financial pressures of no deal preparation whilst Parliament and the country take stock.

We do not take this step lightly and understand its significance. Our duty is to represent the needs of UK manufacturers and the workforces they sustain and express their views. Our manufacturing industries and we believe the British public did not support leaving the EU on the basis of the significant financial harm a no deal scenario would deliver.

We wish you the very best of luck for the week ahead,

Yours sincerely

Stephen Phipson CBE
Chief Executive

This letter is supported by:
UK Steel – Gareth Stace, Chief Executive
NDI – Oliver Welch, Interim Director General
EEF NI - Peter Bloch, Chief Executive
Manufacturing NI – Stephen Kelly, CEO
Scottish Engineering - Paul Sheerin, Chief Executive