UK Manufacturing Job Losses At 6-Year High
The high priest of Brexit economics, Professor Patrick Minford of Cardiff University, openly suggests that Brexit could kill off large sections of what remains of the UK’s manufacturing section and livestock farming (if not agriculture as a whole). This is because, in his mind, the UK would go to a zero-tariff future which means that goods produced in other countries were environmental, workers rights, production standards and health protections are not as strict as in the EU. The goods would be much cheaper and would flood the UK market, putting native production of competing goods out of business. Without mentioning phytosanitary standards and animal husbandry practices, UK agriculture would be threatened by foreign competition on the basis of sheer scale. Minford thinks that we’d adapt and go over to high end manufacture and a more fully service-based economy. He sees it as the modern equivalent of the Thatcherite destruction of UK-based mining and heavy industry of the 80s. He forgets the pain of job losses and the destruction of communities that came with that chapter, of course.
Minford is in a minority, even amongst Brexiteers, who favour unilateral slashing of tariffs – for the very simple reason that if we have already offered unfettered access to our market why would any other nation seek to grant us preferential access to its?
As Brexit uncertainty continues down to the line, the PMI for manufacturing slowed from 52.8 in January to 52 in February (a value above 50 indicates expansion). Comment on the IHS Markit/CIPS survey explains why an apparent expansion may still be bad news:
"Stocks of purchases also rose at the fastest rate since the survey started in 1992 as the fear of customs delays, tariffs and a 'no-deal' scenario felt real for many. The sector's sickness was also visible in employment levels with the steepest job losses in six years and with business optimism at its lowest levels since 2012, firms are unlikely to start hiring any time soon."
In the current survey, 70% of respondents blamed the need to build up stock and raw materials on Brexit uncertainty.