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Abu Dhabi, UAESunday 22 July 2018

Britain’s auto industry warns against leaving the EU customs union

Jobs and environmental protections are threatened by Brexit, says industry lobby

British carmakers have told Prime Minister Theresa May that her promise of a "frictionless" Brexit is "just not good enough". AFP / OLI SCARFF
British carmakers have told Prime Minister Theresa May that her promise of a "frictionless" Brexit is "just not good enough". AFP / OLI SCARFF

Brexit puts 850,000 jobs in Britain’s automotive industry at risk, the country’s car manufacturers warned the government on Tuesday.

In a speech to the industry’s annual summit in London, Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, disclosed that investment in new cars and manufacturing plants had dropped to under £350 million (Dh1.7 billion) this year from £647 in 2017.

He credited the sector’s growth last year, when turnover grew to £82 billion and 186,000 were employed directly in manufacturing, to “investment decisions made years ago, in more stable times”.

It’s not just jobs that are at risk, Mr Hawes said. Growth enabled carmakers to innovate, cut emissions and roll out environmentally friendly products; all of this is compromised by a lack of “certainty and stability that all of British industry needs”.

He disclosed that faced with Brexit, the EU “has issued guidance telling European automakers that UK approvals will no longer apply” and “is advising business that UK componentry will no longer count towards rules of origin”.

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Mr Hawes called on prime minister Theresa May to “retain membership of the Customs Union and the benefits of the Single Market”. Otherwise, he warned, British car manufacturers would be forced to comply with multiple product regulations.

Her pledge to make the process of exiting the EU “as frictionless as possible”, Mr Hawes said, was “just not good enough” he tersely dismissed the suggestion of a “Brexit divided” floated by the government in recent weeks: “The truth is, there is no Brexit dividend for our industry.”

The SMMT’s warning comes on the heels of similar warnings by Airbus – which has a major manufacturing plant in Wales – and BMW, which said the company would be forced to cease production in the UK if the supply chain stopped at the border as a result of Brexit.

Mrs May, faced with a rebellion within her party, has threatened a “no-deal” Brexit.

A spokesman for the government, however, told The National: “We’re confident of securing a good deal with the EU that’s mutually beneficial, and allows for the most free and frictionless trade with our European neighbours.”

The government is working with car manufacturers, the spokesman said, “to put the UK at the forefront of new automotive technologies to ensure we remain the destination of choice for future investment”.