Company relocations grow over Brexit fears

Industry and business groups in the UK are increasing pressure on the government to reach a Brexit deal with the European Union (EU) as companies begin stepping up relocation plans.

David Sapsted

16 September 2019

A new analysis published on Monday, UK Manufacturing: 2019/20 The Facts compiled by the manufacturers' organisation Make UK and Santander bank, showed that the value of trade with the EU was worth more than twice that with the US.Simultaneously, the Institute of Directors (IoD) issued its own survey showing that businesses were facing an "impossible situation" because of the political impasse over Brexit and the threat that the UK could leave the EU without a trade deal.

Firms are moving operations out of the UK

The IoD survey of more than 900 firms found that almost a third were "engaging with relocation" as part of their Brexit contingency planning, with 14 per cent saying they had already moved operations abroad or were in the process of doing so. This compared to nine per cent of directors who said their organisations were exploring onshoring operations to the UK because of Brexit."With no-deal still a possibility in a few weeks’ time, the IoD has renewed its call for targeted financial assistance to help small firms’ Brexit preparations, with new analysis underlining that directors of smaller organisations were notably less likely to feel fully prepared than their larger company counterparts,” the organisation said.

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Allie Renison, IoD head of Europe and trade policy, added, “Firms are facing an impossible situation as they try to prepare in advance for the possibility of simultaneous sweeping changes on an unprecedented level.“If government wants the country to be ready, businesses urgently need more targeted help in the form of financial assistance to enable them to access the specialist advice they need.“Crucially, both UK and EU politicians need to strain every sinew to find a deal, extension or not. Compromise is not a dirty word, and neither side wants to be managing the fall-out of no deal for the foreseeable future. This is as much about the jobs and livelihoods of those who would be most affected as it is about politics and procedure.”

EU exports are crucial to the UK

The Make UK/Santander analysis showed that while the US remained the largest single export market for UK manufactured goods and services with a worth in the last financial year of £118.2 billion – exports to the top seven EU markets alone amounted to £236.5 billion, rising to £256.1 billion when Switzerland was included.Seamus Nevin, chief economist at Make UK, said, “These figures lay bare the overwhelming importance for manufacturers of trade with our closest market and the need to avoid imposing any barriers which will make this more difficult.“Whilst the US remains the biggest market and, presents significant opportunities for export growth, it is a fallacy to believe that geography is not the biggest factor driving trade. For UK manufacturers access to their biggest market must be a premium.“The figures also provide an important reminder that we’re still one of the top ten biggest manufacturing nations and we want to see policymakers working with industry to help move UK manufacturing up the rankings.”Paul Brooks, UK head of manufacturing at Santander, added, “The UK has always punched well above its weight when it comes to exports and it’s vital this trend continues – jobs across the UK count on it.“While we are helping businesses build strong trade links with partners around the world, the message from manufacturers is clear: Europe must remain a strong trade ally. We’ll continue to support the UK to hold its position as a major global economy and exporter.”

For more news and views on the status of Brexit, visit our dedicated Brexit section.

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