Lack of transitional deal will damage thousands of European manufacturers - but billionaire Jim Ratcliffe thinks Brexit issues will get sorted out

Shruti Tripathi Chopra
Follow Shruti
Norwegian-UK Gas Pipeline Laid In the North Sea
A “logjam in negotiations” could damage the UK’s manufacturing industry (Source: Getty)

Manufacturers across Europe today warned that a failure to secure “meaningful" transitional Brexit arrangements by the end of the year would throw a spanner in the works for the sector's supply chains.

The council of European employers of the metal, engineering and technology-based industries (Ceemet), which represents 200,000 companies providing 35m jobs, said that Brexit negotiations must deliver a “reasonable deal in a reasonable time” to protect the growth provided by Europe's factories.

"Companies across the continent want to see swift progress on transitional arrangements to avoid unintended consequences and economic collateral damage arising from a failure to agree an orderly exit," said Ceemet director general Uwe Combuchen.

The warning echoes those made by the financial services industry over the past few weeks, particularly in the Square Mile. Lobby group TheCityUK urged Prime Minister Theresa May last month to provide “urgent clarity on transitional arrangements”.

“For our industry, this really is crunch time,” said chief executive Miles Celic.

Banks and other large financial institutions say they will be forced to trigger contingency plans early next year if no solid transitional agreement has been met, potentially costing London thousands of jobs. Such fears were repeated last week by a senior official at the Treasury.

Read more: Jim Ratcliffe's Defender-inspired SUV could be built outside of Britain

Meanwhile, Jim Ratcliffe – the billionaire founder of chemicals giant Ineos – told City A.M. that both sides of the Brexit talks must resist damaging the continent's growth.

He said:

The UK is an important economy for the European producers. They can’t afford to strand such a huge economy on the doorstep.

Ratcliffe, who backed last year's Leave vote, added: "Ultimately, common sense has to prevail. The producers in Europe will not want to be cut off from the UK market and the UK economy from the European markets. It will settle down and get sorted out."

Read more: Pound falls as Barnier confirms "disturbing" Brexit "deadlock"

Today's report from European industry body Ceemet, which counts the UK’s manufacturers’ organisation EEF as a member, said the transitional agreement must enable workers from the EU and the UK to move freely across borders to “support supply chains and address the sector’s skills gap”.

Terry Scuoler, CEO of the EEF, warned that the “logjam in negotiations” could damage the UK’s manufacturing industry, adding that a transition period of at least two years is necessary for the sector.

“Clarity over transition is essential to business both in the UK and the EU so we can continue to deliver prosperity and investment in jobs alongside economic growth,” he said.

Liberal Democrat leader Vince Cable also added to calls for clarity over Brexit transition for manufacturers.

“Manufacturers and industry across the EU need guarantees, but the government is increasingly heading for a no deal Brexit that will badly damage us for decades," he said.

"A transition is at least better than no deal, but it must be a transition to a deal that effectively keeps the UK within the Single Market and customs union."

Read more: Business warnings grow as clock ticks on Brexit talks

Related articles