News viewpoint: how the General Election result will affect the process sectors
4 Jul 2017
The hung parliament that has emerged diminishes the likelihood of a hard Brexit, but brings other problems in its wake.
The composition of the new House of Commons has increased uncertainty over the direction of the impending EU withdrawal negotiations and their impact on the process industries.
However, the result means that there is likely to be stronger support overall among MPs for the ‘softer Brexit’ sector leaders have been demanding since the EU referendum last year.
As the last of 650 constituencies declared, the Tories were left as the largest single party in the Commons, but with a reduced number of seats and short of a majority. A new Conservative government’s policy decisions will be reliant on some degree of cross-party support.
Two outcomes affecting the process industries – one positive, one negative – emerge from this
A deal with Northern Ireland’s Democratic Unionist Party gives the Tories a wafer-thin majority. Yet the narrowness of that lead tips the overall parliamentary balance in favour of those either opposed to EU pullout or advocating a gentler approach.
Labour, Liberal Democrats and the SNP, with 308 seats, all oppose hard Brexit, together with one Green and four Plaid Cymru (Sinn Fein has another seven seats but does not participate in Westminster).
However, the addition of Tory pro- Europeans brings those opposed to hard Brexit close to a majority. Added to which, the DUP, though pro-Brexit, is seeking guarantees regarding trade with the Republic of Ireland that will probably please soft Brexiters in the food and drink industry.
Two outcomes affecting the process industries – one positive, one negative – emerge from this.
On the plus side, the vote puts controversial issues such as the single market and a customs union back on the agenda and with it the prospect of gentler transition in the UK’s relationship with its European market.
Less welcome is the fact that it may take still longer before the government can outline in more detail its European policy: before negotiations with the EU, it will need to embark on some deal-making with opponents in Parliament.
Industry responses
Terry Scuoler, chief executive, EEF: “Government needs to move away from its previous rhetoric and start repairing relations with EU partners.
“This means putting access to the single market and a form of customs union at the heart of a revised strategy, and removing the shibboleths created around a hard Brexit, which businesses know would be highly damaging for Britain.”
Dr Hakim Yadi, CEO, Northern Health Science Alliance (NHSA): “Swift, decisive action in moving forward life sciences policy is needed to make sure life sciences grows as a fundamental asset.”
Tom Greatrex, chief executive, Nuclear Industry Association: “Industry desperately needs clarity and the new government, whatever form it takes, must resolve the critical and complicated Euratom issue.”
Ian Wright, director general, Food and Drink Federation: “We need certainty that the current legislative framework that underpins our sector’s success – and food safety – will be embedded in UK law by April 2019.
“At the same time, we need to start designing interim or transitional arrangements that will apply from April 2019 until any new framework applies.”
