Brexit car industry negotiations an ‘exercise in damage limitation’, MPs warn

Posted On: 
1st March 2018

An influential group of MPs have warned that the Government's negotiations on the future of the car industry are "an exercise in damage limitation".

56% of UK car exports go to the EU market.
Credit: 
PA Images

Retaining existing regulatory frameworks is the only way to give the UK’s car industry a “realistic chance of survival”, according to the latest report from the Business, Energy and Industrial Strategy select committee.

The committee concluded that any divergence from the current regulatory regime would bring costs to the sector which were unlikely to be recouped through trade deals made with countries outside the EU.

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“We looked hard at potential opportunities arising from Brexit. We found that it is unrealistic to expect an expansion of trade overseas to outweigh the loss of trade to Europe arising from a hard Brexit," the report reads.

“Any new bilateral trade deals secured by the Government are unlikely to lead directly to a significant increase in investment and jobs in the UK automotive sector."

Europe is currently the largest export market for the UK automotive industry, which is one of the most closely integrated sectors with the EU.

Committee chair Rachel Reeves urged the Prime Minister to use “common-sense pragmatism” when it came to dealing with sector.

“Innovative and efficient car plants across the country provide thousands of jobs and the automotive sector is a major contributor to our economic growth," the former Labour frontbencher said.

"There is no credible argument to suggest there are advantages to be gained from Brexit for the UK car industry.

"The Prime Minister now needs to ensure common-sense pragmatism prevails and spell out the Government’s intention to seek continued regulatory and trading alignment with the EU in the automotive sector.”

Trade union Unite echoed the conclusions of the report, saying: "It is absolutely essential for the well-being of the car industry that the UK retains tariff-free access after it leaves the European Union."

But they warned that a hard Brexit would be a "mortal blow" for the UK's car industry.

TOYOTA

The news comes as Toyota has said it will build the next generation of its Auris model at its Burnaston plant in Derbyshire however.

The Japanese carmaker also confirmed its Deeside factory in North Wales would build most of its engines.

The company said the move would secure more than 3,000 jobs across both plants.