Investment to stop until EU referendum – EEF
Businesses would take a “wait and see” approach to investment until the referendum was over, EEF ceo Terry Scuoler told BBC Breakfast this morning.
The sector was set to invest 7% of turnover this year, which was the best the UK had seen since pre-recession, but that would stop if businesses were uncertain about their future, Scuoler claimed.
“It would be an enormous pity if we saw that recovery being dented by the uncertainty – and there is uncertainty over this massive issue of an EU referendum,” he added.
Prime Minister David Cameron promised to hold an in/out referendum on the EU in the run up to the general election, which the Conservative government won earlier this month.
Europe's food and drink turnover
The UK is the EU’s fourth largest food and drink manufacturing country, behind Germany and France, according to a recent report by FoodDrinkEurope.
UK food and drink manufacturers had a turnover of £93.2bn in 2012, which was made up of 7,766 companies.
Germany had the largest turnover (£138.3bn) and France the second largest (£131.4bn).
Combined, the turnover of food and drink manufacturers in the EU was £856.9bn.
The referendum was set to be held in 2017; however, EEF has called for it to be brought forward to May or autumn next year at the latest.
Cameron must also campaign to maintain the UK’s EU-leading status and to emphasise the many benefits of continued membership, Scuoler added.
The prime minister hosted the European Commission president Jean-Claude Junker at his Chequers summer retreat in Buckinghamshire this week and told him “British people are not happy with the status quo” in Europe.
As a result, Junker reportedly told Cameron he wanted to “find the UK a fair deal”.
Scuoler added: “It’s good to see the prime minister forging ahead with an early meeting of his counterparts across the EU to make Britain’s case and Brussels is clearly signalling its willingness to engage.
‘Cannot afford to prevaricate’
“But, having to put the recovery on a sound footing, we simply cannot afford to prevaricate on an issue of such importance to the future of our nation.”
UK manufacturers strongly believed that their economic wellbeing was linked to EU membership, he added.
“It makes no sense to disengage from our major market where we would still face all the costs of compliance and enjoy none of the influence.”
Meanwhile, the Food and Drink Federation director general Ian Wright told FoodManufacture.co.uk the sector wanted “to be part of a strong EU”.
“UK food and drink manufacturers want to be part of a strong, outward-facing, competitive EU that leads through innovation, supported by science and evidence-based policy making,” he said.
“The EU must break down the barriers to trade and deliver food security for its citizens, as well as shared, significant and sustainable growth.”