UK motor industry faces ‘hammering’
British minister’s stark warning after Honda exit
A NO-DEAL Brexit would be a ‘hammer blow’ to the UK’s motor industry and the delay in making a decision on an agreement is ‘unconscionable’, Britain’s business secretary said yesterday.
Greg Clark voiced concerns over the UK leaving the EU without an agreement, telling the Commons he has been repeatedly told in boardrooms that business will ‘not simply be deferred, but moved elsewhere’ if the UK does not act.
Mr Clark added Honda has said its decision to close its Swindon factory in 2021 is ‘not about Brexit’ before noting that the car giant, Japanese investors and the motor industry have been ‘very clear for many months that Brexit is an additional worry at a difficult time’. Honda will close its only British car plant in 2021 with the loss of up to 3,500 jobs, a major departure of Japanese investment announced just over a month before Britain is due to exit the European Union.
The carmaker, which builds more than a tenth of the 1.5million cars made in Britain, said the move was not related to Brexit and it needed to focus on regions where it expects to sell most cars, after struggling in Europe.
But the timing of the announcement comes after a series of warnings from Japan that it would pull investments if they are no longer economically viable after Britain leaves the bloc.
It follows decisions by Japanese companies Sony and Panasonic to move their headquarters from Britain into the EU, while Hitachi put a £16billion (€18billion) nuclear power project in Britain on hold in January.
Some 1,000 Japanese firms are based in Britain, employing 140,000 people, and have invested about £60billion, according to the Japanese embassy in London.
Nissan, Toyota and Honda were encouraged to come to Britain in the 1980s as a pro-business gateway to the EU and have helped turn around an ailing domestic car industry.
The trio build half of Britain’s cars and hundreds of thousands of engines at production sites across the country, but a no-deal Brexit could destroy the free and unfettered trade that manufacturers rely on.
During a statement to the Commons on Honda in Swindon, Mr Clark said the closure was a ‘devastating decision’.
Labour’s Hilary Benn, chairman of the Exiting the EU Committee, wished Mr Clark and some of his colleagues well in persuading the government to ‘abandon’ the idea of a no-deal Brexit.
Mr Clark said it was a period of change, challenge and opportunity for the industry, adding: ‘It is apparent... that a degree of uncertainty was expected after the referendum, but it has now got to the point, as I’m told time and time again in boardrooms in this country and around the world, the time taken is unconscionable, and if we don’t act, we will see decisions not simply deferred but moved elsewhere.’
He later encouraged MPs to back the government’s deal and said: ‘To leave on WTO (World Trade Organisation) terms would be a hammer blow to a foundational industry in this country.’
Mr Clark reeled off comments including from Ford, Aston Martin and Toyota, adding: ‘The clear message from the automotive companies is that we should get on and ratify this deal.’ He spoke of the ‘virtually unanimous view of these investors that the deal that has been negotiated is one that meets their needs... but I do think this is now a moment in which the whole House needs to bring this to a resolution.’
‘We should get on and ratify deal’