UK car makers tell next PM no-deal Brexit is not an option
Britain’s car industry has called for the country’s next prime minister to secure a Brexit deal which keeps frictionless trade with the EU, warning a no-deal exit risked billions of pounds in tariffs and border disruption which could cripple the sector.
Boris Johnson, the frontrunner to succeed Theresa May, and his leadership rival Jeremy Hunt have both said they are prepared to take Britain out of the EU without a deal, although both say it is not their preferred option.
Chief executive of the UK’s Society of Motor Manufacturers and Traders (SMMT) Mike Hawes said the impact of Brexit was already being felt. “We are already seeing the consequences of uncertainty, the fear of no deal,” he said.
The next PM’s first job in office must be to secure a deal that maintains frictionless trade because, for our industry, ‘no deal’ is not an option; we don’t have the luxury of time.
The British automotive industry fears that a disorderly exit from the EU, its biggest export market, could see the imposition of tariffs of up to 10% on finished models and border delays which could snarl up ports and motorways, ruining just-in-time production.
A hard Brexit border could cost £50,000 (€56,000) a minute in border delays, according to data released by the SMMT. Britain’s car sector, rebuilt by foreign manufacturers since the 1980s, had been a runaway success story but since 2017 sales, investment and production have all slumped, blamed on a collapse in demand for diesel vehicles and Brexit uncertainty.
So far this year, Britain’s biggest carmaker Jaguar-Land Rover has announced some 4,500 jobs cuts, Honda said it will close its car factory and Ford will shut one of its two engine plants.
Boris Johnson, the favourite to become British prime minister, said he will seek a new Brexit deal with the EU but if the bloc refuses his demands then he will lead the world’s fifth largest economy out without agreement on October 31. No-deal means there would be no transition period so the exit would be abrupt, the nightmare scenario for many business leaders and the dream of hard Brexiteers who want a decisive split.
The UK’s three-year Brexit crisis could be about to deepen as Mr Johnson’s pledge to leave the EU with or without a deal on Halloween could provoke a standoff with the British parliament which has indicated its opposition to a no-deal exit. Mr Johnson also repeated a warning that there would be “creative ambiguity” about when and how a previously agreed £39bn exit bill gets paid.
