Is the EU OK?


On Thursday 23rd June we’ll be making a decision that will affect generations, not just an electoral five-year term. Many see it as a heart-v-head decision, but professional bodies are looking at the long-term impact it may have on business and investment.

Lesley Batchelor OBE is the director general of the Institute of Export (IOE), told us what she thinks a Brexit would mean for UK exporters. “At a time where a world recession is biting and just less than 50% of our trade is with Europe, we should question whether this is the right time,” she said. “It’s a huge distraction when we should be working on trading with more markets and selling more to existing markets.”

“With the increasing strength leaning away from the western hemisphere it makes sense to consolidate and work with those markets we are already strong in, rather than try and develop new markets when we know that we still have much to learn about exporting from our trade figures.”

The director general says the UK needs to learn how to export properly – following the lead of the Europeans, Germans, Dutch and Italians. Lesley added, “As Einstein said: first learn the rules of the game and then go out and play it better than everyone else!”

The MTA strongly favours the UK remaining within the European Union. Over 80% of the output of the UK manufacturing technology sector is exported, with the countries of the EU by far the largest single market (c.45%). The ability to access that market cheaply and efficiently is essential to our continued competitiveness. In addition, many MTA companies are multinationals, including companies from outside the EU, in particular the USA and Japan, who have established a European HQ in the UK. This provides a multiplier effect bringing with it economic activity, and consequent employment in a diverse range of business functions like Applications Engineering, Marketing, Management and Finance – not just a UK sales team. This is about more than market access, it is about the UK being a fully participatory member of the EU, able to influence the political and economic climate.

“Manufacturing technology is a global market,” said James Selka, the MTA’s CEO. “As the largest economic bloc in the world, the EU is better placed to negotiate International Trade Agreements than the UK would be alone. This argument also applies to adoption of international standards where the MTA represents a UK voice in concert with our European partners.”

MTA members were consulted in late 2015. When asked the question “Thinking about the consequences for your business, should the United Kingdom remain a member of the European Union?  YES/NO” 89% of respondents answered ‘yes’ and 10% answered ‘no.’ 1% indicated that they were ‘unsure.’

Just as with the public polls, there are differing points of view within the GAMBICA membership on the EU Referendum. “On the one hand there is the argument that leaving the EU would lower the fiscal and regulatory burden to the UK,” said Steve Brambley, Director of Public Affairs, GAMBICA. “However there is also the risk to trade and investment caused by economic and political uncertainty. PwC published a report that estimated that the UK would save about 0.5% of GDP in net contribution to the EU if it were to exit, however the uncertainty could cause a 3-5% reduction in GDP in the short term. Businesses can weigh up the benefits and risks for their own circumstances, but it will be their individual employees and the voting public that will decide on 23rd June.”

A survey of IChemE (Institution of Chemical Engineers) members reveals that supporters of Britain’s continuing membership of the European Union outweigh those inclined to vote for Brexit, by a ratio of more than three to one. Over 1,000 IChemE members in the UK responded to the survey, which reveals that 75% will vote to remain in the EU. Only 2% are undecided, or planning to abstain, suggesting that minds are made up on both sides of the debate. A clear majority of IChemE members believe that Brexit would have a negative impact on many aspects of their professional lives with concerns around inward investment, collaboration and research funding at the forefront. Consequently, strong support for continuing membership is evident across all sectors, including upstream oil and gas (70%), downstream chemicals (71%), power generation (76%) and higher education (88%).

Antipathy towards Europe amongst male respondents’ increases with age, reinforcing the commonly held view that support for the leave campaign is strongest amongst older men. Conversely, early career chemical engineers are far more likely to vote remain, with around 80% of the students’ surveyed expressing support for Britain’s continuing EU membership.
The gender profile of the survey respondents suggests that, whilst men are more inclined to express a view on the European question, female IChemE members are less likely to take a Eurosceptic position – with only 7% wanting to cut ties with Brussels. Opposition to EU membership is strongest amongst IChemE members in Yorkshire with 43% indicating an intention to vote to ‘leave.’

Strong views were expressed on both sides of the debate.

Commenting on the survey findings, IChemE’s director of communications, Andy Furlong said, “Although national opinion polling suggests that the referendum result may be too close to call right now, this survey suggests that, within professional chemical engineering circles, there is very strong support for Britain’s continuing membership of the European Union. A clear majority of IChemE members will vote to stay in.” He went on to add “IChemE takes a neutral position on the referendum question. Nonetheless, we actively encourage our members to rise above the scaremongering and mudslinging, engage in informed debate and to vote on 23rd June. Chemical engineering matters in Europe and in the UK, but whatever the referendum result, we will continue to support our 44,000 members who collaborate and network across more than 120 countries.”

Independent new research, conducted by GfK on behalf of EEF, the manufacturers’ organisation, shows that over six in ten EEF members (61%) are in favour of the UK remaining in the EU, while almost a quarter (24%) say that their company is undecided or won’t be taking a stance. Just 5% support a ‘Brexit.’ The poll, the first conducted by the manufacturers’ organisation since the referendum was announced last year, shows that the pro-EU stance is fairly evenly spread across all company sizes. It also suggests that the outcome of Government negotiations is unlikely to make a great deal of difference, particularly for EEF members that are pro-EU.

The findings show that over half (51%) of pro-EU EEF members want to remain in the EU regardless of the outcome of renegotiations, while a further 28% say their company is unlikely to change its view. Amongst the smaller ‘out’ camp, 54% say the outcome could turn (33%) or sway (21%) their view. According to the survey, 70% of EEF members say that remaining in the EU is important (50%) or business critical (20%) for their company. The findings point to members weighing up the pros and cons of EU membership and taking a pragmatic view. Just 3% claim not to see any advantages to business of being in the EU, while 9% perceive no disadvantages.

Members identify the top business advantage of EU membership as the fact that it makes it easier for UK companies to start exporting (81%). At the same time, they perceive red tape (72%) as the key disadvantage for UK business.

Other advantages identified are ease of travel between member states (77%), access to a large export market (76%) and one set of trading rules and regulations for 28 member states (73%). Outside of red tape, the main disadvantages are the potential for slower economic growth in the EU to hold the UK back (49%) and greater potential for economic contagion or disruption across markets (44%).

Interest in exporting and the role that the EU plays in this is very high – just one in ten of those surveyed (10%) do not export or are not interested in exporting to neighbouring countries in the EU. Perhaps unsurprisingly then, over eight in ten (82%) say that it doesn’t make sense for the UK to cut itself off from its major market. At the same time, 82% agree that the UK has a key role to play in helping the EU become more efficient and work harder for its members.

Just two in ten (20%) believe that UK business is held back by the EU and there is similarly little support (22%) for the idea that the UK faces a choice between exporting to the EU and exporting globally. There is also broad recognition that trade deals today are negotiated between blocs rather than individual trading nations (59% agree/15% disagree). The findings have been released just ahead of this year’s National Manufacturing Conference in London (Wednesday 24th February), where EEF has invited both the ‘in’ and ‘out’ camps to present their cases to industry bosses. Matthew Elliott, Chief Executive of Britain for Business (for the Vote Leave camp) and MP Damian Green of the Conservative Europe Group (for the ‘remain’ camp) will be going head to head on the issue. “These findings show that the majority of our members – of all sizes – are pragmatically pro-EU,” said Terry Scuoler, CEO of EEF. “There are no rose-tinted spectacles here – our members are fully aware of the pros and cons of EU membership and, on balance, have decided that the UK’s interests are best served by remaining. “Our findings reinforce the fact that companies, particularly those interested in exporting, do not see the point of the UK cutting itself off from its major market. More importantly, they reject the idea that the UK faces a straight choice between exporting to the EU or expanding its global reach. They understand that a dynamic and growing economy should and could be doing both and that being part of the EU helps to underpin rather than undermine our global presence and trade ambitions.

“This is not to suggest the EU is perfect – our members are fully aware and frank about the EU’s shortcomings. But they also value its benefits and strongly believe that the right way forward is to reform and improve the EU for the benefit of all member states rather than simply walk away.”



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