Rishi Sunak must ‘reset’ trading relationship with EU, say manufacturing chiefs

European firms have gone cold on doing business in UK, survey finds

The Prime Minister faces a challenge in his own party as Britain and the European Union inch closer to an agreement (PA) (PA Wire)

Britain’s fractured relationship with the EU is costing the economy because suppliers have gone cold on doing business with the UK after Brexit, manufacturers have warned.

Make UK is calling on Rishi Sunak to build on his Northern Ireland Protocol deal and “reset” the trading relationship with Brussels.

The trade body said almost 50 per cent of British firms in the sector said their suppliers in Europe had become wary about doing business in Britain.

The survey of more than 100 top manufacturers also found that 35 per cent of firms said suppliers from the rest of the world were also cautious about doing busines in Britain.

In an annual conference speech on Tuesday, Make UK chief executive Stephen Phipson will say the Windsor Framework agreement could be the start of “new chapter” that could lead to better trading relations with the EU.

“We need to reset our political and trading relationship with the EU which has been marked by such rancour,” Mr Phipson will say.

He will add: “I want to applaud the positive approach taken by the prime minister which shows what can be achieved when you work pragmatically and collaboratively, rather than thumping the table or issuing threats.”

Some business chiefs have called on the government to forge a new veterinary deal on agri-foods to ease trade friction with the EU.

Sir Martin Broughton – the business tycoon was among the final bidders to buy Chelsea FC last year – said Brexit had made Britain a less attractive place to invest and had been a “dumb thing to do”.

He told LBC: “In my view it has become a lot less attractive post-Brexit. Denying your biggest market [the EU] and making it difficult to trade with your business market is a dumb thing to do.”

Lord Sainsbury said UK needed a major boost manufacturing to have any hope of addressing the low growth problem. “We’re no longer providing the high valued products that the rest of the world,” the Labour donor told LBC.

Meanwhile, shadow chancellor Rachel Reeves, in a speech to manufacturing sector leaders on Tuesday, is due to commit to a review of corporate taxes in a bid to create a stable investment environment.

Setting out Labour’s approach if it wins power at the next election, Ms Reeves will say that a Sir Keir Starmer premiership will “put an end to uncertainty” for firms when it comes to the taxes they face.