Nissan spooked Europe’s car producers recently by suggesting it might close its European plants and ramp up production in the UK. This has also wrong-footed Brussels, not least because European car manufacturers describe the UK as ‘Treasure Island,’ such are the profits they make on our shores. If Brussels imposes tariffs on our car exports, the UK will likely play tit for tat, making our domestically produced vehicles more competitive and securing more UK jobs.
My guess is that European car manufacturers could end up being our greatest allies, petitioning Brussels for a ‘no-tariff’ trade deal. I can see the same nervousness running through the minds of industry chiefs in other EU sectors which export to us. Europe’s levels of unemployment are higher than in the UK. So, which presidents and PM’s of EU nations will want to see their own unemployment rates rising as their own employers get priced out of our lucrative economy? After all, free trade is the rising tide that floats all boats.
The coronavirus is already worrying about UK businesses dependent on Chinese imports. Remember how the UK’s banking industry off-shored its customer-call services and back-office functions in the 1990s? There was a consumer backlash and many such policies were reversed. Could we see UK manufacturers enjoying a renaissance, supplanting overseas suppliers as UK businesses and consumers demand a more local supply chain? I think so.
It’s not only more manufactured goods that will end up being produced in the UK in the future. Talking to some Yorkshire farmers recently, there is currently a major food security debate going on. It surrounds both the coronavirus and the ethical production of food generally. We run a huge deficit on agriculture in Britain and there’s change ahead. Our farmers are rubbing their hands together as consumers are increasingly demanding more local produce.
‘Leaving the EU will cause overseas investment to decline and unemployment to rise in the UK,’ was the much-quoted Brexit forecast. The polar opposite is occurring. Since Q1 2019, foreign direct investment (‘FDI’) into the UK has been growing. And there has been a palpable increase in confidence since the election. An estimated 50,196 new FDI jobs were created here last year, compared to 31,000 in Germany, and 24,000 in France. There’s more to come.
It’s easy to have a glass-half-empty mentality amid this continuing uncertainty. But the view from the other end of my telescope is very different. I hope yours is too.
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