Britain’s £365 billion manufacturing industry is reaching ‘tipping point’ as Brexit approaches

LONDON — Manufacturers are reaching a “tipping point” as Brexit approaches because the government is failing to outline its intended approach to negotiations, an industry body has warned.

Terry Scuoler, chief executive of the EEF manufacturers’ group, will say in a speech in Strasbourg today that the government must clarify its plan for leaving the European Union soon to avoid a situation “which would be as tragic as it would be harmful.”

The move comes as business groups increase their calls for the government to adopt a more pro-business stance towards negotiations. They have been buoyed by Chancellor Philip Hammond, who has been calling for a softer Brexit since the Conservatives lost their majority in June’s general election.

Last week Hammond said in a speech in Germany that the UK should seek to avoid “a disruptive and dangerous cliff edge” and secure an early transitional agreement.

In a speech attended by Antonio Tajani, president of the European parliament, Scuoler will say:

“The UK finance minister, Philip Hammond, speaking in Germany last week, set out a vision for growth in the UK and in Europe. He was right to highlight our joint interests amid the complexity of the Brexit negotiations. Many of our industries are interconnected.

“UK businesses need to know – soon – what arrangements will be in place after March 2019, to be able to plan, make investment decisions and have confidence that an orderly and carefully managed approach to Brexit is underway.

“If they don’t have that assurance soon there will come a tipping point, sometime in 2018, when boards in the UK and elsewhere will need to make decisions based on the state of the negotiations at that point. They cannot wait until the end of the process for confirmation of a deal on our departure or future trading relationship.

“They need to know much sooner what transitional arrangements will be in place, and for how long. A failure to do so will damage our collective economic interests, a situation which would be as tragic as it would harmful.”

Figures published this week show investment in the UK car industry has slumped since the EU referendum last year. Just £322 million was invested in Britain’s auto sector in the first six months of 2017. If those figures are replicated in the second half of the year, the amount invested in the sector annually will have fallen by around three-quarters since 2015.

NOW WATCH: HENRY BLODGET: Tech market is nowhere near the dotcom days