Posted on 5/10/2017 by
Pharma and medical supply firms may face 10% revenue drop
Key manufacturing sectors in the UK, including healthcare, are set for a £17bn annual cut in their combined revenues and could face serious staff shortages under a ‘hard Brexit’ scenario, according to a new report.
Global law firm Baker McKenzie and economic consultancy Oxford Economics say the country’s automotive, technology, healthcare and consumer goods sectors all face significant risks.
For manufacturers of pharmaceuticals and medical equipment and supplies this would mean a 10% drop in export revenues, if European tariff and non-tariff barriers are put in place when the UK leaves the EU in 2019.
The report, The realities of trade after Brexit, says an end to free European market trade for UK businesses, and the consequent charges raised imports from the UK would see a surge of EU consumers switching to domestically produced goods instead.
Its authors point out that 49% of the UK’s exports go to European, where-as the country takes in just 9% of the EU’s exports.
Ross Denton, trade partner, Baker McKenzie, said: “The UK government has always been against barriers to trade, including non-tariff barriers.
“Some would say that the whole raison d’etre for Brexit is to remove obsessive standard-setting, categorisation and licensing of products from the UK, but that thinking doesn’t take into account requirements of other markets.”
Denton concludes that “the EU exports a lot more broadly, to a whole host of other markets, and consequently, it is far less dependent on the UK as a market than the UK is on it”.
For the UK’s healthcare sector this could mean a £2bn drop in exports to the EU each year, and potential staffing problems given that 9% of healthcare staff are originally from Europe.
The report adds another voice to those warning of the dangers of a hard Brexit that leaves the UK without easy access to the single market, and comes as the Conservative party’s annual conference this week further exposed government divisions on how to tackle the divisive issue.