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UK car industry “thousands of jobs” at risk if UK fails to reach a Brexit deal

Thursday, March 1st 2018 - 09:53 UTC
Full article 8 comments
A BEIS Committee report said the UK car industry was largely export-led with Europe as the primary market. Success was built on “complex supply chains” A BEIS Committee report said the UK car industry was largely export-led with Europe as the primary market. Success was built on “complex supply chains”

Failing to strike a Brexit deal would put “hundreds of thousands” of jobs in the car industry at risk, MPs have said. The Business, Energy and Industrial Strategy Committee said continued close alignment with the EU would ensure the industry's survival. And it warned the introduction of trade barriers would leave the sector unable to compete with its European rivals.

The government said it wanted a deal that maintains the industry's strength.

In a report published on Thursday, the Business, Energy and Industrial Strategy (BEIS) Committee said the UK car industry was largely export-led with Europe as the primary market. The sector's success was built on “complex supply chains” that stretch throughout Europe, it said.

If trade barriers were erected after Brexit, it could cost the sector upwards of £4.5bn in lost exports, the committee said. Jobs and inward investment worth “hundreds of millions of pounds” would also be lost.

The committee said it was “unrealistic” to think new trade deals could offset the damage of a “hard Brexit”, whereby Britain left the single market and the customs union and began trading with EU as if it were any other country, based on World Trade Organization rules.

And it said any form of divergence with the EU would come with costs for carmakers, urging the government to focus on “damage limitation” in its talks with the bloc.

“There is no credible argument to suggest there are advantages to be gained from Brexit for the UK car industry,” Rachel Reeves MP, chair of the BEIS Committee, said.

“Regulatory consistency and friction-free trade benefits car companies, consumers and car-workers.

”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.“

Despite the car industry's concerns about Brexit, a string of big manufacturers have committed to building more vehicles in Britain since the EU referendum.

In November 2016, Nissan announced plans to build the next generation of Qashqai and X-Trail sports utility vehicles at its Sunderland factory, while BMW has said it will assemble its electric Mini in Oxford.

On Monday Toyota said it would make its next generation Auris hatchback at its Burnaston plant in Derbyshire, protecting 3,000 jobs.

The government has also pledged to support the competitiveness of the UK sector after Britain leaves the EU, and has invested £20m in Burnaston alongside Toyota.

In a statement, BEIS said the industry was an ”incredible success story... supporting almost half a million people in high-skilled, well-paid jobs”.

Top Comments

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  • The Voice

    And… thousands of jobs in Germany France Belgium Spain Romania Turkey Sweden Holland Czech Republic. All those places that assemble cars or produce components exported to the UK.

    Why does anyone think THEY, the EU wont have restrictions put on their goods by US. Two can play at their game. They are bullys, they are piqued at the notion that anyone can reject the Franco German superstate. Cant wait to get out of the corrupt overbearing organisation.

    Mar 01st, 2018 - 11:41 am +1
  • Conqueror

    I wonder which MPs? There are numbers of things that a complete certainty in the automobile industry if the UK isn't offered an acceptable trade agreement. Hundreds of thousands of relevant jobs will go in France, Germany, Italy, Spain and Sweden. If car manufacturers that originate in those countries have factories and/or plants in any of the other 22 member states, jobs in those countries may be lost as well. And that's before we consider jobs in component suppliers. According to reports, the German car industry is already in a panic.

    And we shouldn't forget how cussed the British can be. I wouldn't rule out the possibility that it could swiftly become socially unacceptable to have a vehicle produced by manufacturers of those countries. The norm may become American, Japanese or South Korean cars.

    Mar 01st, 2018 - 11:53 am +1
  • Capt Rockhopper

    Funny is it not that the Remainers think a no deal will only affect UK business? Merkel has already said that Germany will seek a trade deal with the UK despite the EU.

    Mar 01st, 2018 - 03:13 pm +1
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