Brexit: parts of UK manufacturing 'at risk of extinction', CBI says

Parts of British manufacturing risk becoming extinct unless the government stops talking politics to itself and starts taking action to ensure “real frictionless trade” post-Brexit, the Confederation of British Industry has said.

The outgoing president of the CBI claimed the car industry, which employs 800,000 people, is particularly vulnerable because of its “just in time” production method.

“If we do not have a customs union, there are sectors of manufacturing society in the UK which risk becoming extinct,” Paul Drechsler said. “Be in no doubt, that is the reality,” he told BBC Radio 4’s Today programme.

He said continued uncertainty over the Brexit deal, which is due to be delivered in the autumn, was putting off potential investors who were going elsewhere.

“We already know tens of millions, in fact hundreds of millions, have been invested by UK pharmaceutical and finance companies to create continuity post a worse-case Brexit scenario. Tens of millions. What could we have done with that money?” he said.

The government has not given business the necessary clarity to make investment decisions, he said.

“We have a negotiation within the UK government that’s gone on for nearly three years. We still haven’t got clarity about the future direction, about where we’re heading, what the future relationship with Europe will be, at a level of detail that matters for investment,” he told the BBC.

The Department for Exiting the EU said the government was “focused on delivering a Brexit that works for the whole of the UK” and it had already published 14 detailed papers on sectoral plans. It would set out its white paper on Brexit shortly, which would outline policy in more detail.

Drechsler’s remarks comes hours after the CBI’s director general, Carolyn Fairburn, warned that business leaders must speak out and tell their local MPs about the job losses that would result from Britain leaving the EU without a customs deal.

The head of John Lewis Partnership separately told an FT business conference that leaving the customs union would cause chaos.

“While it’s tempting to hunker down and hope this will resolve itself, the need to secure a good Brexit – one that provides as much economic certainty as possible – is too important to simply bury our heads and hope,” he said.

Drechsler said the economic growth that Brexiters expect to flow from exiting the EU through trade deals with other countries is not supported by evidence.

“There’s zero evidence that independent trade deals will provide any economic benefit to the UK that’s material. It’s a myth,” he said.

Drechsler, who is due to leave the CBI next week, is taking up a new role representing business in the capital at London First, which represents 200 leading employers including Starbucks, Lloyds Bank and the Canary Wharf Group.