EU membership essential for UK manufacturing

The UK attracts more foreign investment than any other country in Europe, but if it were to leave the bloc that would all change, warns MEP.

By Fiona Hall

08 Jan 2014

Imagine for a moment that you are a foreign investor looking to set up a new factory in Europe. You would no doubt consider a wide range of factors: labour costs, a skilled workforce and high-quality local infrastructure. But one item would be likely to be top of your list: unfettered access to the EU, the world's largest market with a population of over 500 million relatively wealthy consumers.

The UK continues to attract more foreign investment than any other country in Europe. In 2012-2013 alone, 170,000 jobs were created or safeguarded by inward investment, a third of them in manufacturing. Britain's car industry has thrived as firms such as Jaguar Land Rover, Nissan and BMW pour money into expanding their plants. This year, for the first time since 1976, Britain sold more cars abroad than it imported, with over 50 per cent of exports going to Europe. [pullquote]The UK manufacturing sector is now estimated to be creating around 5000 jobs a month, and is set to grow 2.7 per cent in 2014[/pullquote]. From Solihull to Sunderland, Britain's great industrial engine is stuttering back into life.

However, this remarkable recovery depends on the UK retaining its status as a top destination for foreign investment. And the truth is, if Britain were to leave the EU, its attractiveness would be dramatically reduced. You don't have to take my word for it; countless business leaders have spoken out in recent months to emphasise that EU membership is crucial for firms choosing to locate in the UK.

Just last week, the managing director of Siemens industry UK, which employs 13,500 people across the country, warned that leaving the EU would be disastrous for manufacturers and could risk making inward investment much harder to achieve. In my own region of the north east, Nissan has made it unambiguously clear that it would reconsider its investment if Britain was no longer an EU member. And the EEF, Britain's leading manufacturing organisation, has found that 85 per cent of its members want to stay in the EU. Ultimately, if we are serious about rebalancing the economy and turning the UK back into a successful exporting nation, we must retain access and influence over what is by far our biggest export market.

That doesn't mean simply sitting back and accepting the status quo. Indeed, Liberal Democrat MEPs are determined that the UK should lead the EU reform agenda, including through the forging of ambitious trade deals with the Japan and the US that will give a further boost to exports and jobs. We understand that the best way to stand up for Britain in Brussels is to build alliances and reform the EU from within, not snipe from the sidelines. UKIP and many Eurosceptic conservatives may claim to represent the national interest, but they would be willing to throw away our economic recovery in a misguided attempt to shut Britain off from the rest of the world. The truth is that it is the Liberal Democrats who are fighting for British jobs and for our future as an open, prosperous trading nation.