Burnham is right: Britain needs an EU reset before our manufacturers are shut out

A lot is going on in global economics, and with the budget looming this week, the clamour for political attention will only increase. For me, there is a massive elephant in the manufacturing room. Put bluntly, the UK is standing on very delicate ground when it comes to European supply chains, and we need urgently to intensify our efforts to secure a closer relationship with the European Union. If we fail to act with purpose now, we risk leaving domestic manufacturers at a growing disadvantage in this rapidly changing industrial landscape.

I made this rallying call in front of a room full of delegates at the Euroforge Automotive Sector autumn meeting in Munich recently. At the heart of my message was a ‘EU reset’, not only to protect the future of UK car making, but also to safeguard the interests of European partners whose manufacturing success depends on highly integrated cross-border supply chains. In short, it is an industrial necessity. We need to protect British industry, but we also need to recognise that the UK and European automotive sectors are deeply connected.

What damages one part of the supply chain will inevitably affect the other. We cannot stand on the sidelines while Europe develops a new industrial strategy that could determine where investment goes, where components are sourced and which manufacturers benefit from public support. Through our Italian friends at the Istituto Affari Internazionali (IAI), we put forward the thoughts of our 200-strong membership base to the British Ambassador in Rome.

We will be developing this into a longer-term project with IAI to support a more constructive and commercially focused relationship between the UK and the EU. Industrial Accelerator Act makes the issue more urgent The need for progress has become more pressing following the latest developments surrounding the EU’s proposed Industrial Accelerator Act and the ‘Made in EU’ approach to industrial policy. Last week, reports indicated that France and Germany had moved towards a compromise that could allow the UK to participate in relevant aspects of the EU’s arrangements for the automotive sector.

This is believed to be subject to conditions, including alignment with EU trade-defence measures, as well as further negotiations and approval. These latest developments underline just how quickly the industrial landscape is changing. There is movement towards a European approach that seeks to strengthen domestic manufacturing, protect investment and ensure public support delivers actual benefits for European industry. Britain must engage now.

We cannot assume the UK’s existing trading arrangements will automatically protect our manufacturers from every new requirement or condition that will inevitably attach to European industrial support. If the EU is reshaping the rules governing industrial investment, procurement and automotive support, the UK needs to be at the table to make the case for our companies and shared supply chains. Boosting capacity The Industrial Accelerator Act, proposed by the European Commission in March 2026, is intended to strengthen European industrial capacity and accelerate decarbonisation.

Its proposed measures include ‘Made in EU’ and low-carbon requirements in selected public procurement and public-support schemes, covering strategic sectors such as steel, aluminium, automotive and net-zero technologies. For UK businesses, the implications extend beyond tariffs. British manufacturers may continue to benefit from tariff-free trade under the UK-EU Trade and Cooperation Agreement where they meet the relevant rules, but that does not automatically guarantee equivalent treatment under every new EU industrial policy or public-support measure.

The Confederation for British Metalforming is particularly concerned about the consequences for downstream manufacturers, including metalformers, component makers and small and medium-sized enterprises supplying European automotive and industrial customers. The interaction between the Industrial Accelerator Act, Rules of Origin, carbon-border measures, steel trade arrangements and automotive supply-chain requirements needs urgent clarification.

Manufacturers also need practical guidance on how they will demonstrate compliance and whether UK-origin components and materials will qualify for relevant preferences. Manufacturing Base Our concern is not that Europe wants a stronger manufacturing base - we want precisely the same for Britain. The more pressing concern is that the rules designed to strengthen European industry could unintentionally weaken established supply chains by treating trusted UK manufacturers as external suppliers.

Domestic companies supply European customers, support European jobs and form part of the manufacturing capacity on which both economies depend. Excluding them from opportunities because of an unresolved political relationship would make little industrial sense. Downstream manufacturers must not be overlooked either. Steel, automotive and decarbonisation policy cannot succeed if they ignore the companies that turn materials into the components and products used across modern industry.

The choice is straightforward. We can engage constructively and help shape a relationship that benefits British and European manufacturing, or we can stand back and allow decisions to be made that leave our businesses at a significant disadvantage. The UK must not become the forgotten link in Europe’s new industrial strategy. An EU reset is necessary, and the time to intensify discussions is now. ____________________ Steve Morley is President of the Confederation of British Metalforming.

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