'No deal Brexit could cost hundreds of hi-tech Lancashire jobs'

Lancashire's hi-tech industries could face hundreds of job losses if there is a 'no deal' withdrawal from the European Union, a new report has warned.

By The Newsroom
Monday, 30th April 2018, 7:25 am
BAE Warton
BAE Warton

Economic thinktank the UK Trade Policy Observatory says two areas – the Ribble Valley and Fylde – are among those most at risk of “substantial” job cuts where “for every 100,000 economically active residents more than 1,500 high-tech jobs may be lost.”

Predicting that the air and spacecraft industry could shrink by 8.1per cent the Observatory notes both districts “are specialised (as well as highly reliant) on the manufacture of air and spacecraft” for jobs.

County councillors were warned of the likely job cuts and Observatory view in a report to the council’s Cabinet Committee on Performance Improvement. The committee had requested an update on the county-wide implications of the UK’s withdrawal from the European Union.

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The Observatory, a partnership between the University of Sussex and Chatham House, offers analysis, comment and training on Brexit issues.

Preston Labour county councillor Carl Crompton, who attended the meeting, spoke out about his concerns for the economy and jobs.

Speaking afterwards he said: “I’m concerned about the effects on our manufacturing base in Lancashire particularly regarding BAE and Springfields (the Westinghouse Springfields nuclear fuel manufacturing plant at Salwick).

“It is not only the companies themselves, it is the supply chains as well. The aerospace industry covers the whole of Lancashire really – it is not just limited to Preston.

“I asked officers to come back with more information about how much financial impact it will have on Lancashire.”

Coun Crompton warned the knock-on effect would impact on other local businesses right down to corner shops and people could struggle to pay their mortgages.

He said: “It’s a bit frightening really. It’s such a big issue. If people are not working they haven’t got the money.”

He added that a lot of those who could be hit in the supply chain were not in high paid tech jobs.

But local MPs Nigel Evans and Mark Menzies, whose constituencies cover BAE’s Samlesbury and Warton sites, dismissed the warnings.

Ribble Valley MP Mr Evans, who is vice chairman of the international trade select committee, claimed: “These reports are not worth the paper they are written on. Employment has gone up every month since we voted to leave.

He added that New Zealand, Australia and Canada were all committed to making new trade deals with the UK.

Fylde MP Mark Menzies also attacked the Observatory view saying: “These figures are pure skewed speculation. Britain voted to Leave and that is what we will do. The doom-mongers told us time and time again that we would suffer economic meltdown from the moment the referendum took place. It simply hasn’t happened. Our economy is growing.”

But the Unite union has called on the Government to act to save jobs.

A spokeman said: “There’s a lot the Government can do to support skilled jobs in Lancashire. People didn’t vote for Brexit to leave their jobs.

“We’ve always been very clear that a lot of our members’ jobs, not just in aerospace, but also in the automative industry in the North West depend on our trading relationship with Europe.

“We’ve been very clear of the need to retain tariff free access to Europe and frictionless trade.

“With Europe particularly you see components and parts cross back and between the UK and Europe several times, with many companies operating a ‘just in time’ policy.

“For us it’s important that the Government choose access to the customs union and single market.

“Also we’ve got a lot of our members working in defence for BAE and it’s important that the Government supports our defence industry by spending the defence budget here in the UK. By 2020 nearly 25p in every pound of defence spending will be spent in US factories.”

The wide ranging report to councillors detailed how currently more than half of the North West region’s exports of manufactured goods go to the EU. It also noted he county is also home to some of the largest concentrations of advanced manufacturing and chemicals production in the UK.

Positive news came with a reminder that recent figures showed business activity in the region is now growing faster than in London.

But councillors were also told a Government assessment of the effect of withdrawal deals on economic growth over 15 years compared to current forecasts showed growth dropping 2.5 per cent in the North West in an EU single market, going down eight per cent with a free trade arrangement and dropping 12 per cent with no deal.

In each option there is lower growth than if UK remained in the European Union. The figures came from the Government’s Department for Exiting the European Union.

All 14 districts in Lancashire voted for Brexit in the 2016 referendum, with the county polling almost 60 per cent in favour of leaving the EU and 40 per cent wanting to stay.

In Fylde, where BAE Systems has its huge Warton plant, the voting was 57 per cent Leave and 43 per cent Remain.

Across the county in the Ribble Valley, the location of BAE’s other major centre at Samlesbury, residents voted 56.4 per cent Leave and 43.6 per cent Remain.

BAE Systems said that the company had made its views known on the impact of Brexit on the company in its annual report for 2017.

The report stated that: “Transition arrangements after March 2019 will be important to enable companies to prepare for potential changes in the regulatory environment.

“As there is relatively limited UK-EU trading and movement of EU nationals into and out of BAE Systems’ UK businesses, the resulting Brexit impact on the business is likely to be limited, depending on the terms of any transition and final agreements for the UK’s future relationship with the European Union.

“We will support the government in achieving its aim to ensure that the UK maintains its key role in European security and defence post-Brexit, and to strengthen bilateral relationships with key partners in Europe.

“This will be important for ongoing collaboration in the development of defence capabilities.”

Conservative MP Mark Menzies, Fylde:

“Fylde is a heavyweight exporting economy but to markets outside the EU already, such as the Kingdom of Saudi Arabia.

“And to see reports stating that free trade agreements will bring about a fall in business is bizarre.

“I met with leaders at BAE Systems and Westinghouse recently and they are confident about future orders and business.”

Local businessman, Brexit campaigner David Haythornthwaite, chairman of family company Lytham based Tangerine Group:

“It’s nonsense to suggest that any jobs are going to be lost as a result of leaving. We export to 38 countries around the world and 51 per cent of our sales are exported.

“If anybody has anything to lose more than me then I would be very surprised...I see it as an opportunity.

“We need to be able to trade in the rest of the world and Europe is a very small part of that world.”

Conservative MP Nigel Evans, Ribble Valley:

“During Project Fear we were told between half a million to 800,000 jobs would be lost immediately if we chose to leave the EU. Every month unemployment has gone down and employment has gone up. I don’t take these reports at all seriously. The fact is we are going to open up markets which are currently closed to us under Free Trade agreements where the vast majority of growth is taking place. There will be a big boost to jobs not (just) in Ribble Valley and Fylde but across the whole of the North West. My contention is we are more likely to lose jobs if we stay in the EU.”