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What Might Leaving the Single Market do for UK Manufacturing?

Earlier this week, Theresa May broke the months long silence on what kind of future we can expect with the European Union. With Article 50 due to be triggered later this year, successive journalists, politicians and industry heads had pressed the government to reveal their plan for Brexit.

In a speech delivered on Monday, Mrs May said that the UK “cannot possibly” remain within the European single market, which ensures free trade between all European nations, because that would mean “not leaving the EU at all”.

It’s a blow that many have expected, but not one that was touted as a serious possibility by the Leave campaign during the referendum campaign. During the same speech, the PM insisted that she would push for the “freest possible trade” with European nations, but that the EU trying to “punish” the UK for leaving would be “an act of calamitous self-hard”. She also added that “I am equally clear that no deal for Britain is better than a bad deal for Britain”, words which may strike fear into the heart of the UK’s manufacturing business.

In response, Labour have warned of the “enormous dangers” that the PMs plans posed for the UK, and the European Parliament’s chief negotiator said that there could be “no cherry-picking” by the UK in talks.

But what does this mean for UK manufacturing? Well, it’s perhaps the single most important event to happen to the industry in a generation.

Put plainly, around 44% of all exports from the UK go into the European market. At present, all of those exports to Europe are free from duty, which makes them more affordable for overseas markets and therefore, more popular.

Mrs May appears to be strapping herself in for what commentators have begun to call a “hard Brexit”, wherein the UK receives little to no concessions from the EU on the way out. For British manufacturers like us who produce BSP hose fittings and PTFE hose fittings, the prospect of a levy being placed on our goods as we attempt to sell to the EU could be devastating to the industry.

Specifically, Mrs May said on the prospect of an agreement with the EU that any such agreement must "allow for the freest possible trade in goods and services", Mrs May said.

"But I want to be clear: what I am proposing cannot mean membership of the single market.

"It would, to all intents and purposes, mean not leaving the EU at all.

"That is why both sides in the referendum campaign made it clear that a vote to leave the EU would be a vote to leave the single market."

Nevertheless, the PM has said that the UK won’t budge on controls for immigration from European nations, something which is a requirement if free trade is to be possible. Much of the PR spin after the speech has been around the way that the UK will be free to set up trade deals with the rest of the world – something the UK manufacturing industry will eagerly await.

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