UK Car Industry In Brexit Warning
Nobody knows how the UK election will turn out, but most pundits expect that Boris Johnson will be returned to power. The big question is then will it be at the head of a majority government or as the leader of a minority administration? If it is the former, then he will press ahead with the Brexit withdrawal that he negotiated in October and would have the numbers needed to pass the legislation.
Contrary to his election mantra of “get Brexit done”, the withdrawal agreement is just the opening act in the drama of forging new trading ties with the EU and the rest of the world – to coin a theatrical phrase, Brexit will run and run. Like Theresa May before him, Johnson is having to balance conflicting demands from within his own party. At the moment, the die-hards who want the cleanest break with the EU are in the ascendant. He has promised this group that he will never agree to any extension to the transitional period which the withdrawal agreement ushers in (come what may; do or die; rather be dead in a ditch, etc). This means that a new EU UK trade deal would need to be negotiated, signed and ratified by the end of next year – an all but impossible task. Should it not be, and absent of such an extension, the UK would leave the EU without a trade deal.
The latest group to warn about the risks of disrupted trade with the EU is the trade body for the UK car industry, the Society of Motor Manufacturers and Traders (SMMT). SMMT is warning that without an “ambitious” EU-UK trade deal, UK car production would be cut by more than a third. In 2018, the UK made 1.52 million vehicles. SMMT claims that reliance on simple WTO practices would add £3.2 billion a year to the costs of manufacturing cars in the UK.
The industry needs “frictionless free trade” and wants regulatory alignment of the sector with the EU. It also hopes for continued access to talented workers – all things that the UK currently enjoys as an EU member state.