Long-term view on EU needed to support exports and investment

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By Iain Wright MP, Member of Parliament for Hartlepool and Shadow Minister of State for Industry

There is a cost of living crisis in this country. Prices have risen faster than wages in 39 of the last 40 months. People don't feel that any economic growth, welcome though that will be, means rises in their standard of living. This cost of living crisis has been acutely felt by people in the last few years, but is actually part of a long term economic change over the past 30 years or so, in which skilled jobs in industry were lost to this country.This needs to be turned around. That's why I want to see British manufacturing succeed, grow and thrive. I think manufacturing can and must play a bigger role in a rebalanced British economy of the future which addresses the cost of living crisis – an economic future which is made by the many and in which success is shaped by well paid and secure jobs in industrial sectors that emphasise the importance of long-term growth, with productive and efficient enterprises selling their goods to the rest of the world.We need a financial system that works for the real economy, in all parts of the country, rather than just the Square Mile of the City of London. We need a skills system that meets the needs of employers and young people. We need to tackle the culture of short-termism that has led to chronically low levels of business investment in growth, innovation and productivity in some parts of the country. And we need to be open to international markets, being ambitious in our desire to see a sustainable recovery being based upon an outward looking country exporting its goods and services to the rest of the world.I know this is an aspiration shared by the EEF, who also want to see Britain's manufacturers propser and grow. That is why I think the EEF's recent report, Manufacturing: Our Future in Europe, is a significant development in the decades-old argument as to Britain's place in Europe and whether it is Britain's economic interests to play a leading role within Europe. In fact, it was so important, that I asked a question in the House of Commons at BIS questions last week to Vince Cable to emphasise the need for British manufacturing policy to be shaped and influenced by British manufacturers.The clear message from Britain's manufacturers is that Britain most definitely should be in Europe. It is in the best interests of Britain's economy and British manufacturing. 85 per cent of manufacturers who expressed a view – and I haven't yet met a manufacturer who is too shy to express an opinion – said that they would vote to stay in Europe.The advantages to British manufacturers are clear. Half of our exports go to the European Union. It gives British firms access to the largest single market on earth, with half a billion potential customers. Free trade agreements between the EU and other blocs in the world, such as Canada, the US or Japan, gives British firms access to potentially billions more consumers without uncompetitive tariff barriers. It is simply naive and unrealistic to expect to see us as a nation benefiting from a EU-US free trade without being a member of the EU.

Europe often acts as a springboard to export to other parts of the globe. Conversely, membership of the European Union also attracts multi-billion pound investment into the regions, with firms wanting to base their European operations as a springboard to capture the rest of the European market.In my area of the North East, Nissan has seen this strategy work extremely successfully. The car plant is one of the most efficient and productive anywhere on earth, employing 6,000 people directly and an extra 24,000 jobs in the supply chain, and exporting 80 per cent of all the cars it produces, mostly to Europe.The company's chief operating officer has warned that a departure from the EU would create “obstacles” to foreign investment in car manufacturing. Millions of pounds of further investment and tens of thousands of jobs here in the UK could be put at risk by the uncertainty caused by the Tory-led Government's approach to Europe.I was particularly struck in the EEF report that manufacturers want the Government to take a long-term view. They don't want decisions on our future membership of the EU to be based upon short-term political concerns. They want to see, as the report says, “a clear vision from government on what kind of economy we are trying to build in the UK and the policy priorities from government to achieve this”. A lack of a compelling vision and a short-term approach, with an emphasis upon the political rather than the economic, is hindering our competitiveness and failing our manufacturers.Instead of pandering to Conservative backbenchers who want to stop the modern world and get off, the Government should be listening to British manufacturers who want us to play a strong role within Europe, attract investment, create jobs and produce long-term sustainable growth.


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