Sign Brexit deal to ‘give us our future’, pleads car industry
The car industry has pleaded with the government to sign a post-Brexit free trade agreement by Christmas, saying that the failure to do so could cost the sector £55bn by 2025.
Speaking at a Society for Motor Manufacturers and Traders (SMMT) summit, chief executive Mike Hawes said that a new partnership with the EU “could give us our future”.
“In 37 days we leave the single market, leave the customs union. The way we trade changes”, he added.
“We need that deal. Zero tariff, zero quota; rules of origin that encompass not just existing products but also those future zero emission vehicles. And adequate time to implement the deal.”
He warned that failure to do so could be catastrophic for the sector. “Without that deal, we decline. 2m fewer vehicles produced by 2025; £55bn of lost potential”, Hawes said.
In response to his remarks, business secretary Alok Sharma said that the car industry was one of the “gems of the UK’s manufacturing base”.
He also reaffirmed the government’s commitment to securing a zero tariff, quota free deal for the industry before the transition period ends on 1 January.
If the industry is forced to trade on World Trade Organization terms, the SMMT warned, it will cost it on average £11bn a year for the next five years.
Even a bare bones arrangement would cost in some £14.1bn, it added.
The last minute plea comes after a year in which the car industry has been hammered by the coronavirus pandemic, with showrooms and factories forced to shut for months amid lockdown restrictions.
As a result, production has hit levels not seen since 1995, with the number of cars built so far this year down 36 per cent on 2019.
Due to new lockdown restrictions, some showrooms have been shut again, prompting Hawes to urge ministers to come up with a plan to reopen them.
“We must re-open as quickly as possible. Other countries’ retailers have remained open despite rising cases”, he said.
“We too operate safely, Covid securely. And we too make a huge contribution to society, to the economy, to a recovery.”
According to SSMT estimates, the pandemic has already cost the whole European market €100bn – and the failure to agree a Brexit deal could see another hit worth €110bn across the continent.