Car industry urges Theresa May to rethink 'unrealistic' Brexit plans or risk jobs

Posted On: 
26th June 2018

There is "no Brexit dividend" for the UK's car manufacturers, Theresa May has been warned, as a top motor industry group urged her to rethink her Brexit policy or put thousands of jobs at risk.

The Society of Motor Manufacturers and Traders is the latest business group to warn the Prime Minister about Brexit
Credit: 
PA

The Society of Motor Manufacturers and Traders (SMMT) has urged the Prime Minister to speed up talks with the European Union and shift her "red lines" on Brexit by keeping Britain inside the EU's customs union "as a minimum".

More than 856,000 people are employed in the wider motor industry in Britain, and the SMMT - whose members include big hitters like Ford and Vauxhall - estimates that the sector is worth some £20bn to the UK economy.

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But a new report by the lobby group - which will host Brexiteer Transport Secretary Chris Grayling at its annual conference today - says "the first six months of 2018 have been less encouraging", with investment stalling and jobs being cut.

The SMMT warns that just £347.3m has been set aside by the industry for investment in the UK this year - "almost half the sum announced in the same period last year".

The group is pinning the blame for the fall on the Government's Brexit strategy.

"There is growing frustration in global boardrooms at the slow pace of negotiations," said SMMT chief Mike Hawes.

"The current position, with conflicting messages and red lines goes directly against the interests of the UK automotive sector which has thrived on single market and customs union membership.

"There is no credible ‘plan B’ for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU. Government must rethink its position on the customs union."

Ministers remain deadlocked over the UK's future customs ties with Brussels, with a White Paper fleshing out the Government's plans to maintain smooth trade after Brexit delayed until after a crunch summit of EU leaders later this week.

The SMMT chief added: "There is no Brexit dividend for our industry, particularly in what is an increasingly hostile and protectionist global trading environment.

"Our message to government is that until it can demonstrate exactly how a new model for customs and trade with the EU can replicate the benefits we currently enjoy, don’t change it."

Labour seized on the latest warning from the car industry, accusing ministers of having "refused to listen to the cries from businesses and unions for clarity".

Shadow Business Secretary Rebecca Long-Bailey added: "Today’s SMMT figures clearly show that the Conservatives’ refusal to listen is already damaging the UK automotive sector.

"The Government must listen to businesses and unions, negotiate with the EU rather than amongst themselves, and secure a jobs first deal which keeps skilled jobs and successful industries in the UK.’’

'F*** BUSINESS'

The stark message from the motor industry comes amid a week of high-profile interventions from businesses over Brexit, with ministers at war over how to respond.

In the past few days alone aviation giant Airbus has threatened to quit the UK unless greater clarity is provided on the Government's Brexit plans, while car firm BMW has also sounded the alarm.

Insurance boss Sir Gerry Grimstone this week warned that top City firm Standard Life had already drawn up plans to shift its 600,000 insurance and pensions clients to an Irish subsidiary.

Some cabinet ministers, including Health Secretary Jeremy Hunt and Foreign Secretary Boris Johnson have gone on the offensive, with Mr Hunt branding the business calls "completely inappropriate" and Mr Johnson reportedly declaring "f*** business" when asked about firms' fears.

But Business Secretary Greg Clark hit back at those attacks, saying big employers were "entitled to be listened to with respect", while Defence Minister Guto Bebb said criticising firms with concerns over Brexit was "both unworthy and inflammatory".