The single issue dominating Brexit discussions

Business Green

Published: 14th July 2017

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Molly Scott Cato explains why green businesses should be concerned by the direction of the debate on the Single Market

The Single Market has become the most significant flashpoint in Brexit negotiations. Five of the UK’s leading business organisations have called on the government to maintain access to the Single Market – and Customs Union – until a Brexit deal is reached. Meanwhile, three Labour MPs who backed an amendment from backbencher Chuka Umunna to keep the UK inside the Single Market, were promptly sacked by Jeremy Corbyn.

It’s not hard to see why the Single Market, and Customs Union, are foremost in the minds of businesses, and politicians. A survey by Business West earlier this year revealed that 51 per cent of businesses surveyed view the prospect of leaving the single market as ‘negative’ or ‘very negative’, compared with 19 per cent who view it as ‘positive’ or ‘very positive’ while 36 per cent of respondents believed the implications of Brexit for customs paperwork and procedures will be ‘negative’ or ‘very negative’ – rising to 57 per cent for exporting businesses – compared with just eight per cent who think the impact will be ‘positive’ or ‘very positive’.

The same survey showed moderate or strong levels of uncertainty amongst businesses over Brexit particularly with regards to rules for future trading with EU countries; future impact on the supply chain; future status of EU regulations in the UK; future value of the pound; and the future health of the UK economy. An earlier survey by Business West revealed that “the ability to trade without additional paperwork” was the most popular negotiation priority for 65 per cent of businesses, rising to 79 per cent of exporters.  

So, do green businesses follow suit when it comes to attitudes towards the Single Market and Customs Union? Siemens employs 650 people in Hull manufacturing wind-turbine blades for export. The company’s chief executive, Juergen Maier, openly backed a Remain vote. He announced shortly after the Brexit result that the company was putting its investment plans in the UK on hold. Ahead of the referendum, he blogged that “British manufacturing is stronger in the EU’s single market” and complained that the debate had been insufficiently based on reality, and stirred up “ignorance, intolerance” and “negative and often inflammatory rhetoric against our neighbours”.

As for smaller businesses, I am aware through Business West and my own visits around the South West constituency of the difficulties they are already facing and their uncertainties about the future.

A film and television production company report that since the referendum they have lost a six-figure income; an activated carbon manufacturer in Bristol say that with around 80 per cent of their business generated through exports to the EU, they will either have to appoint additional staff inside the EU at additional cost, or start a new company in Europe; a Wiltshire-based manufacturer that imports from the US and sells into the UK and the EU who say that any form of tariff or bureaucratic barrier to trade will force them to locate manufacturing and sales into an EU member state; and veterinary researchers in Gloucestershire who say that handling customs into the EU would add considerable complications, delays, and hence extra costs to their business.

Another serious casualty of ending a close relationship with Europe will be research and innovation, something that is definitely important to the green sector. British universities stand to lose a share of up to £141bn in the next round of EU research grants unless the UK can negotiate associate status with Europe in Brexit talks; a situation Kurt Deketelaere, secretary-general of the League of European Research Universities, has described as “disastrous”.

Evidence is mounting that the Conservative’s extreme form of Brexit – removing us from the Single Market and Customs Union – will be an economic disaster. The vast majority of businesses know this to be true. It is time for them to turn the flashpoint of Brexit into a raging inferno that the government simply cannot ignore.