I think it's going to be very difficult to get our economy going when the nett zero targets mean manufacturing energy costs are so high.
We need to make stuff to sell.
We need to be manufacturing the means to produce nett zero energy. This is what the US are doing - they are making their own wind turbines, batteries and solar panels.
We had a nascent industry producing wind turbines, solar etc. we never invested in it. Instead all our renewables are using Danish and German (Vestas and Siemens) Wind Turbines being set up in farms by the likes of EDF (electricity de france) and solar is mostly imported from China.
Now that costs of renewables have come right down energy costs are getting lower.
Another area is medical products. We have the science to develop world class products. Indeed we have many early stage biotech companies clustered around our leading universities. What we lack are two things
1) A regulatory body, that regulates clinical trials etc, that is recognised by other countries
2) a domestic health service that is prepared to adopt new break throughs and use them at an early stage. Instead we have pretty much just one agency - the NHS which has just one central clinical approval NICE.
Not so long ago the UK was a leader in early stage medicine. The European Medicines Authority was based in London. The biotech and clinical research industry was in the UK, you did the clinical trials in UK and European hospitals, all coordinated out of London, and once you had your approvals drugs were approved right across both the UK and Europe. In most of Europe the buying decisions rest with the clinicians rather than a centralised NHS as is the case in the UK, so early adoption and revenues are that much easier. And EMA approval is recognised globally and thus EMA approval immediately spring boards you into most of the rest of the world - in particular North America.
We gave this all away. Now for UK medical companies there is little point in doing clinical studies in the UK. You spend £30m and you only have access to UK market. MHRA ( the UK regulatory body) trials are not recognised by the EU, nor for that matter anywhere else in the world.
Instead the centre of clinical trials is now in Amsterdam to where the EMA is now headquartered. Spend €30m on trials and you have a global market. And once you have the global market you spend a bit of money to do the UK trial.
Business and capital is free to move, and will move to where the best return on investment happens to be. Venture Capital funding into UK biotech is now 1/3 of what it was (in both numbers of deals and amount invested). Most of the promising science is being funded, but the companies are being taken straight to Europe for doing all the trials work.
Part of the clinical trials is building the manufacturing protocols, and again UK is no longer recognised anywhere else. So companies will be setting up manufacturing in their main markets.
I totally agree we need to make things to sell. But by cutting off our ability to sell into the EU, and by consequence all the other territories with which the EU has reciprocal relations, we have left ourselves competing on world trade terms.
This now means that we are competing directly with the likes of India, China, Brazil and South Africa. These all have a very much lower cost base and labour rates to the UK, and are rapidly catching up if not overtaking us in terms of technology and skills.
So take an icon of British Manufacturing - Jaguar Land Rover. Yes they still are UK headquartered, have a design bureau in the West Midlands along with a manufacturing base. But the new Defender is being made in Europe, and they are building facilities in India and China to make their products for Indian and Asian markets. And of course JLR is wholly owned by TATA which is an Indian conglomerate.
Ineos Grenadier - another example.
I have another client that is on the automotive, precision engineering, aerospace supply chain. A few years ago they had 200 staff in the UK producing £20m of revenue selling around the world.
As their client switched overseas there was a need to be within the EU. They now have 250 staff in Europe, 5 in UK and are doing over €30m. Quite a bit of their product is being used in the UK - by European companies building all our windfarms.
The reasons for all this, is the UK standards are not recognised overseas. And if you want to sell to other markets you need to make to customer requirements.
However our powers that be have taken the view that UK standards (even though they were equivalent to EU and this much of the rest of the world) are the best in the world, and johnny foreigner should just recognise them. And we can’t agree that they are equivalent as that would hinder UK sovereignty.
So we are at a standoff where British companies are no longer competitive and no longer able to make products that meet customer standards.
And if and when we do our export bureaucracy just throws yet more layers of blue tape in the way.
So one gentleman I know well had a really good little business employing 40 odd people making high quality sausage type products that were selling right across Europe. His customers being the delicatessen’s and direct to public. His factory and processes meet all the EU standards, but as its in the UK and not Northern Ireland, it’s not recognised as such. Now every consignment has to be accompanied by veterinary certification for 75% of his customers. This is totally uneconomic and effectively doubles the cost of each consignment. He has cut his workforce down to less than 10.
However as we are frequently told this is the democratic will of the people. Frankly unless the new government gets its head out of its backside and stops worrying about what Farage etc will shout about on GB news we on a very slippery slope downwards and we will not just be the poor man of Europe.
And immigration won’t be a problem. Our young people are already seeking opportunities elsewhere.