Manufacturing NI: business in the North is concerned about a lack of detail, insight or planning around Brexit.
You can certainly forgive Manufacturing NI for worrying about lack of planning around Brexit. For example, if you search the Department of Economy website for the word Brexit – it appears only once and that was in June last year. You would nearly think they had banned the term.
This article, which first appeared in the Irish Independent, highlights an increasing concern among Northern business and contrasts that with efforts being made by Government in the South. But of course it goes on there isn’t a Government here and when there was there “wasn’t even agreement on whether Brexit is an opportunity or threat.”
The article is penned by Manufacturing NI’s CEO Stephen Kelly:
“The UK’s decision to leave the EU and President Trump’s election herald seismic shifts in global economic policy so as we entered 2017, we were grateful for a bit more stability locally with our new Executive and a turn towards traditional politics with the arrival of an Official Opposition. 2017 hasn’t started well!
Government does not create manufacturing success but it does create the conditions which allow manufacturers to grow, generating wealth and work. What happens in the White House, Westminster, Leinster House and Stormont does matter.
It’s our analysis that our sector is best described as “brittle” as we continued to crawl out of the 2008 crash. To that we must now add “uncertain” given political and world events. Washington’s trade policy and attitude towards foreign investment and what deal Westminster can secure after Article 50 is triggered will define 2017 and the years beyond.
More locally the Executive’s refreshed Economic Strategy will direct investment, skills development and enterprise and trade support out to 2021. It will also, hopefully, ensure exporting companies can finally enjoy competitive energy prices. Fundamentally it is an opportunity to instil confidence and stability.
The outgoing Economy Minister visited Germany and explored the success of their ‘Mittelstand’ firms. Family owned, investing profits in skills, innovation and quality with their output enjoyed in global markets. In many ways there are similarities with our own home-grown manufacturing sector. The challenge for any new NI Executive is to ensure they can compete at home and abroad.
Northern Ireland is a manufacturing economy. Between direct and supported jobs, 1 in 4 families in the North depend on a manufacturing wage so a Manufacturing Plan is now, more than ever, needed. Focusing on building a competitive, skilled, innovative and growing sector with a target of 20% of local GDP will bring some certainty in an uncertain world.
A plan which also ensures we retain the best possible access to the EU market and skilled and semi-skilled labour. And, it’s not simply about “no return to the borders of the past”, it should be about no return of any border, in any form, across or between these islands. Borders bring costs and complexity both of which destroy businesses.
Frankly, we needn’t worry about the imposition of Tariff’s when the cost and complexity of Country of Origin Certification, regulatory barriers, customs controls and other non-tariff restrictions are placed on such an integrated and engrained supply chain across and between these islands. If the UK leaves without a customs agreement to replace the Customs Union, then we will have a very significant threat to the manufacturing economy.
As an observer, it appears that the Irish Government receives a lot of criticism at home. It’s not for us to say whether that’s justified or not, however, from our engagements on the UK’s exit from the EU with the Department of Foreign Affairs, through the All-Island Civic Dialogue on Brexit Sectoral Groups and Plenary, it’s clear that business is being listened to, a plan is developing and actions taken to insulate Ireland from the worst of Brexit and position the country to capitalise on what opportunities may materialise.
The latest Plenary on 17th February was a good example. Yes, there was significant concern and grumbling, but as the day unfolded, there was an increasing sense of a single team approach of the Government, its Agencies, the wider body politic and Civic Society collectively bidding to tackle this Brexit problem. Indeed at one point we had the Minister and the CEO’s of all the state agencies responsible for economic development on the stage and pitching how they are working to seize any Brexit opportunities. The optics of having the CEO’s of IDA Ireland, Enterprise Ireland, InterTradeIreland, Science Foundation Ireland, Bord Bia and Tourism Ireland with the Minister on stage with the Taoiseach and a raft of other Ministers in the audience did not go unnoticed from those from the North. Not only don’t we have a local Government working for us, but when we did, there wasn’t even agreement on whether Brexit is an opportunity or threat.
Increasingly, business in the North is concerned about a lack of detail, insight or planning around Brexit. They don’t know who to speak to or where to find information that will help them make the decisions necessary to plan their way towards Brexit opportunities or to avoid disaster.
Business works at a completely different pace to Government. They can’t wait because they can’t afford to delay. That was made clear by Craigavon Pharma manufacturer Almac in their powerful evidence presented to the NI Affairs Committee in the House of Commons last week. Immediately after the UK Referendum result, their customers were asking for their Brexit plan. Within two weeks, they took action and it has since been confirmed they are opening a new operation in Dundalk and purchased a firm in the South to guarantee a presence in the EU and avoid non-tariff costs and give regulatory certainty.
Almac’s problems mirror that many others. What actions can they take to be certain to avoid adding cost and complexity to an already complex businesses?
But, Almac’s solution is a positive for both parts of the island and perhaps a model of what manufacturing needs to do both North and South to protect jobs. Their new Dundalk operation will, certainly whilst the UK negotiates its EU exit, secure jobs in Craigavon. Equally, if firms in Ireland want to guarantee access to their critical UK market post-Brexit, then it is time to work up plans to invest in the North. After all, jobs in Derry are good for Donegal and vice-versa.
If the right deal were achieved, we could see the reindustrialisation of Northern Ireland and with it more and better jobs in every constituency. But that will require bravery and creativity. Can the North and the Border Counties be uniquely positioned as a bridge rather than a border to the Single Market? Or what about a Freeport or Free Trade Zone status?
What we do know is that when manufacturing grows, the whole economy grows with it and that’s worth positively fighting for.
Just as politics creates the conditions for business to create work, so too can business create the conditions to make Brexit work. So hopefully we will see some rational and not just a political outcomes. We can’t afford not to.