Britain’s car industry cautions: No-deal Brexit is our nightmare
LONDON: A no-deal Brexit would seriously damage the car industry in Britain and the European Union by raising costs and sowing chaos for carmakers and consumers alike, the head of Britain’s car industry warned on Tuesday.
With less than eight months until Britain is due to exit the EU, Prime Minister Theresa May has yet to find a proposal to maintain economic ties with the bloc that pleases both sides of her divided party and is acceptable to negotiators in Brussels.
May has stepped up precautionary planning for a so-called “no-deal” Brexit that would see the world’s fifth largest economy crash out of the EU on March 29, 2019, a step that could spook financial markets and dislocate trade flows across Europe and beyond.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said carmakers were increasingly concerned about the lack of clarity around the manner of Britain’s departure from the EU.
That has raised the prospect of Britain leaving with no deal and falling back on World Trade Organisation rules that could leave British car exporters facing EU import tariffs of around 10 per cent.
“No deal... is just not an option. It would be seriously damaging to the industry not just in the UK but in Europe as well,” Hawes told reporters as he presented SMMT’S mid-year update on British car production.
At stake is the future of one of Britain’s few manufacturing success stories since the 1980s — a car industry employing over 850,000 people and generating annual turnover of $110 billion. Much of the industry is owned by foreign companies.
The world’s biggest carmakers including Toyota, BMW and Ford have urged Britain to ensure that they can import and export without hindrance after Brexit.
Supporters of Brexit admit there may be some short-term pain for Britain’s $2.9 trillion economy, but that long-term it will prosper when cut free from the EU, which they cast as a failing German-dominated experiment in European integration.
Under the current timetable, both London and Brussels hope to get a final Brexit deal in October to give enough time to ratify it by exit day.
However, the potential for major political upheaval remains, with May’s minority government facing a series of make-or-break moments in the Brexit process over coming months. She must find a way to strike a deal with the EU, which has already rejected her preferred plan on trade, then sell that deal to her deeply fractured Conservative Party, before putting it to a vote in parliament.
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