Ministers accused of letting Brexit cause 'serious and lasting harm' as manufacturing plummets

Posted On: 
10th June 2019

The Government has been accused of allowing Brexit to cause "serious and lasting harm" to the UK economy as manufacturing suffered its biggest monthly slump since 2002.

Car manufacturing suffered a 24% month-on-month fall, the Office for National Statistics found.
Credit: 
PA

Campaigners for a second EU referendum pounced on the latest figures from the Office for National Statistics, which showed that manufacturing output tumbled by 3.9% during April - the sector's biggest monthly fall in 17 years when plants downed tools for the Queen's golden jubilee.

That included a "dramatic" 24% drop in car production as manufacturers eased off on orders after ramping them up ahead of the UK's original planned EU departure date of 29 March.

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Meanwhile the UK economy as a whole shrank by 0.4% compared to the previous month, with the services sector flatlining between April and March.

ONS statistician Rob Kent-Smith said: "Growth showed some weakening across the latest three months, with the economy shrinking in the month of April mainly due to a dramatic fall in car production, with uncertainty ahead of the UK's original EU departure date leading to planned shutdowns.

"There was also widespread weakness across manufacturing in April, as the boost from the early completion of orders ahead of the UK's original EU departure date has faded."

Labour MP Wes Streeting - speaking on behalf of the People's Vote campaign for a fresh Brexit referendum - said: "Brexit is already causing serious and lasting harm to our economy. News that the economy contracted in April shows the seriousness of the crisis and the extremely high stakes for jobs, investment and public services.

"British industry is feeling the strain, with British steel and car manufacturing on the brink. And the threat of a destructive No Deal now hangs over every decision facing businesses small and large across the country. They know that WTO terms are the worst trading terms in the world and that No Deal threatens a new economic crisis."

And he added: "Now we know the real costs of Brexit, the public must be allowed back into this process. Forcing No Deal – for which there is no mandate – on the country is not a solution. And nor is it a solution to run down the clock with fruitless attempts at renegotiation of Theresa May’s Brexit deal."

Shadow Chancellor John McDonnell also leapt on the ONS stats as he tore into Conservative leadership candidates including frontrunner Boris Johnson for promising to cut taxes.

"The whole country is hurting while the Tory leadership candidates compete on tax cuts for high earners," the Labour frontbencher said.

He added: "With GDP going backwards over two consecutive months, this government is resembling a business entering administration.

"Wages, investment and productivity are all stagnant – and only Labour's plan for a £10 per hour Real Living Wage, National Transformation Fund and regional industrial strategy will deliver the sustainable growth we need to turn this ailing economy around."

Meanwhile Ed Davey, the former Cabient minister who is running to be the next leader of the Liberal Democrats, said: "This is a really worrying indicator of the fragile state of our economy and should shame any Tory leadership candidate continuing to push for a no-deal Brexit.

"If just uncertainty can cause this shrink in manufacturing and our GDP, then it doesn’t bear thinking about what crashing out of Europe with no-deal could do."

But a Downing Street spokesperson said: "While monthly figures are always changeable, the fundamentals of our economy are strong. Our employment levels are at a record high and wages are growing in real terms."