Prime Minister Andy Burnham is preparing to press the European Union to ensure British companies are not shut out by its emerging Made in Europe industrial policy.
Mr Burnham is expected to make the case for the United Kingdom to be treated as a trusted European partner when he meets European Commission President Ursula von der Leyen during a visit to New York.
The intervention follows warnings that preferential rules for products made inside the EU could disrupt supply chains which remain closely integrated across the Channel, particularly in the steel and automotive sectors.
What is the ‘Made in Europe’ plan?
The European Commission proposed its Industrial Accelerator Act in March. The measure would introduce targeted European-content and low-carbon requirements in selected public procurement and public support schemes.
The Commission says the rules are intended to strengthen industrial capacity, create demand for European-made clean products and reduce strategic dependencies. Steel, cement, aluminium, automotive and net-zero technologies are among the sectors initially covered.
However, the legislation is still a proposal and its final terms remain subject to the EU’s legislative process. There is currently no agreement giving British businesses the same treatment as companies based in EU member states.
Burnham warns against ‘collateral damage’
According to Reuters, Mr Burnham will argue that Europe’s drive for greater industrial resilience should not cause collateral damage to reliable partners such as the UK. His position is that Britain and the EU face many of the same pressures from global overcapacity and subsidised competition.
The Prime Minister raised the issue with French President Emmanuel Macron at Downing Street on 3 September. An official account of the meeting said Mr Burnham warned that the Made in Europe agenda could pose significant challenges for UK industry. The two leaders agreed it was vital to work together to find a way forward which protected shared interests.
British ministers are particularly concerned about components and materials crossing the UK-EU border several times during production. A rule which judges eligibility solely by where a final product or component is made could therefore affect manufacturers on both sides.
Automotive and steel industries in focus
The Society of Motor Manufacturers and Traders has said annual automotive trade between the UK and EU is worth around €80 billion. It has warned that excluding Britain from the new arrangements would undermine competitiveness on both sides of the Channel.
Steel is another central concern. British producers supply European customers and form part of wider continental manufacturing chains, while UK factories also depend on materials and components sourced from EU countries.
Mr Burnham’s argument is expected to be that closer co-operation would strengthen Europe’s collective industrial base rather than weaken the EU’s objective of reducing reliance on less trusted overseas suppliers.
No deal has yet been secured
The language from European capitals suggests negotiations may be difficult. France’s junior industry minister, Sébastien Martin, has said enhanced co-operation with partners could be possible, while also stressing that countries outside the bloc cannot expect precisely the same rights as EU members.
That leaves the scope of any British participation unresolved. The Government is lobbying for protection for UK firms, but the EU has not agreed to include Britain or to grant a general exemption from the proposed rules.
The issue is likely to form part of wider discussions ahead of the next UK-EU summit expected later this year. Any eventual arrangement would need to define which British products or sectors qualify and what conditions the UK would have to accept in return.