Leaders' Blog

The Brexit effect

The Brexit deal, once touted as a step toward independence and economic freedom, has turned out to be a double-edged sword for UK manufacturing. The trade and cooperation agreement brokered by Lord Frost has been described as the “worst possible deal” for an industrial nation.

Industry leaders, represented by Make UK, have voiced their concerns, highlighting the “terrible” damage caused by the agreement. The absence of critical clauses like “diagonal cumulation,” which would allow components processed in third countries to be considered of EU origin, has crippled cross-border production. This oversight is not just a minor inconvenience – it’s a significant barrier to competitiveness in a global market.

Innovation is the key to competing on the global stage

Despite these challenges, the UK has a unique opportunity to carve out a competitive edge. While it’s true that the country can’t match the financial incentives offered by the US Inflation Reduction Act or the EU’s Green Deal, the UK can lead through innovation. But to do so, there needs to be a cohesive strategy that prioritises technology, automation, renewable energies and the necessary training to support these initiatives.

The UK’s previous success stories, like the rise of Airbus in Broughton and the leadership in advanced materials, are a testament to what can be achieved with the right industrial strategy. However, since the dismantling of the Catapult Networks – a nationwide series of research and development centres – by the previous government, the momentum has stalled. The lack of a long-term vision has left the UK lagging, with one of the lowest uses of industrial robots in Europe and only a single battery plant to support the transition to sustainable energy.

A call for leadership and vision

The message from manufacturing leaders is clear: without a comprehensive and long-term industrial strategy, the UK will miss out on crucial investment opportunities. As Stephen Phipson, Head of Make UK, put it in a recent interview with The Guardian; “I have lots of chief executives from international companies coming into my office and telling me they have billions to invest and that the UK is a candidate, but they are not investing anything unless they know what the plan is.”

The call for a joined-up industrial vision is not just about reacting to the challenges posed by Brexit or global competition. It’s about positioning the UK as a leader in the industries of the future. This means not only investing in innovation but also addressing the fundamental gaps in the UK’s infrastructure and skills base. For example, the transition to sustainable energy requires not just the technology but the skilled workforce to implement it. The national grid upgrade, a £54bn investment, is a prime example where the absence of domestic manufacturers like cable makers and transformer producers – industries that disappeared 25 years ago – is keenly felt.

The urgency of now

The UK’s industrial sector is at a crossroads. The transition to a low-carbon economy, the challenges of post-Brexit trade, and the global competition for investment all demand a robust and coordinated response. An industrial strategy is not a luxury; it is a necessity. Without it, the UK risks being left behind in the race for innovation and economic leadership.

For leaders in manufacturing, the message is clear: the government must act quickly. The time for piecemeal policies and short-term fixes is over. What’s needed is a bold, ambitious industrial strategy that not only addresses the immediate challenges but also lays the foundation for long-term success. Only then can the UK truly compete on the global stage and secure its place as a leader in the industries of tomorrow.

Join this debate with the UK’s industrial elite at Manufacturing Leaders’ Summit on 26-27 November at the Titanic Hotel, Liverpool. It’s where 250 of the most senior leaders from all industries within the sector gather to discuss the common challenges and opportunities they will face over the coming year. More Summit information available below.