How Brexit Makes British Products More Affordable
Every time there seems to be any uncertainty in Britain, we always here the same rallying call to ‘buy British’! You might be thinking it’s a broken record at this point, but this recognisable cry is not just a generic example of political rhetoric. Manufacturing was once the heartbeat of Britain, creating jobs, livelihoods and communities in its wake. Now, it’s largely outsourced around the world due to cheaper wages and higher profits. However, manufacturing still exists and the quality has not declined since Britain’s industrial heydey. Usually, you would expect to pay a premium for British goods, owing to a higher cost of living which hikes the price. Events over the past six months have begun to change that perception.
With the Brexit vote favouring a move to leave the European Union, this has caused the Sterling to slump. You may recall a similar speech being bandied around during the recession nearly 10 years ago. Essentially, when the pound slumps, this makes it more expensive for us to import. This is caused by the pound being worth considerably less when compared to a foreign currency. On the reverse, however, this makes exporting cheaper – ideal for foreign companies looking for quality goods. Even for British people, the weak pound is likely to drive up the price of everyday goods, making British alternatives more attractive.
What Have the Past 6 Months Suggested?
Voting to leave the European Union placed Britain in a unique situation, one never trodden before. The experts and the analysts filled our news feeds with the supposed doom and gloom which comes attached to leaving what had become a comfort zone. In the months since Britain has yet to implode, the economy is stable… for now and exports have increased. Rejuvenating the manufacturing industry has been on the government’s agenda for at least the last decade. Now, in the aftermath of the Brexit vote, there are shoots emerging which suggest this could become a reality.
Demand for British goods has held and even increased since Brexit. As the value of the pound came tumbling in the weeks and months later, this led to ‘Made in Britain’ being cheaper abroad. For instance, the average spending by foreign credit cards increased by 11%. Meanwhile, importing goods became more expensive, driving the price of foreign products up (the Marmite debacle is a great example of this).
However, this is not to suggest that Britain is going to transform itself into a powerhouse, such as China or India. Instead, it is utilising an educated and highly skilled workforce to create quality goods. The ‘Made in Britain’ marque which you may see adorning some products is as much an evaluation of quality as it is telling you where it is from. Goods ‘Made in China’ come attached with this stigma of cheap materials, cheap product. The opposite can be said of Britain, despite a lack of evidence to suggest the contrary.
Why is ‘Buy British’ Regarded So Highly?
The perception is that when you are buying British, you are buying quality. This all stems from brand Britain; the Industrial Revolution, the Royal Family and the British Empire. Its history is far from being covered in glory, but it creates resonance worldwide. In the east, China may struggle to shake off the image of packed factories, cheap labour and a lot of smog. Likewise, Britain is tightly associated with this identity of what it means to be ‘British’. This is not to say that goods produced in Britain are complete tat, quite the opposite. It’s a proven track record forged by Boeing, Jaguar, Rolls Royce, HP, Cadbury’s and so on. Each who forged this stock reputation, which every British manufacturer now follows.
Having an identity such as this gives the manufacturer’s something to strive towards. Products are designed and developed with the quality set as the main goal. For customers abroad, especially in developing countries, this is ideal due to high demand for quality goods. With the sterling at its weakest state in recent memory, there has never been a better time for foreign consumers to buy British.
Where Do British Consumers Stand?
Only a few weeks ago, across ‘the pond’, President Trump’s inauguration speech was centred around buying American and creating American jobs. The same theory was reverberated in the UK by Labour deputy, Tom Watson. The idea is that by supporting local manufacturers, this results in more jobs being created and more wealth being kept in Britain. Undoubtedly, as we move closer to Brexit, the government will look to shine the light on British goods to begin making up ground on its trade deficit.
In the coming years, we can expect the price of imported goods to increase. Meanwhile, after Brexit is complete, there is a good chance the cost of British goods will fall. This will primarily be caused by an independent Britain looking to reinvigorate its ‘self-sufficiency’. As inflation rises, this is likely to happen in tandem with the price of imported goods also on the rise. As a result, while British goods may not necessarily be cheaper, they will be more comparable. Significantly, this is one of the reasons why there is such a drive to ‘buy British’ as doing so will see more money being pumped into the British economy, rather than being sent abroad.
Buying British, for Britons is primarily an ideological decision. The rising cost of inflation will start to pose the question to consumers as to whether they prefer British cheese or Swiss, rather than which is cheaper. For those outside of Britain, there has never been a better time to buy British, certainly not in recent memory. While investors may have been turned away by relative instability, one-off orders are sometimes up to 10% cheaper when using the US dollar, a significant saving.
About Rap Industries
Rap Industries are a British manufacturer, based in Peterborough, Cambridgeshire. Established for over 40 years, we have designed and produced office partitions and exhibition stands for clients across the UK and the world. If you wish to find out more about the services we provide, please call 01733 394941 or send an e-mail to sales@rapind.com.