Busi­ness boss’s ‘scare story’on car in­dus­try

Daily Mail - - News - By James Salmon Trans­port Ed­i­tor

ONE of the coun­try’s top busi­ness lead­ers was ac­cused of ‘clas­sic scare­mon­ger­ing’ yes­ter­day af­ter warn­ing parts of the car in­dus­try will be wiped out un­less Bri­tain re­mains in the EU cus­toms union.

MPs poured scorn on Con­fed­er­a­tion of Bri­tish In­dus­try boss Paul Drech­sler’s claim that sec­tors of the man­u­fac­tur­ing in­dus­try could be­come ‘ex­tinct’, say­ing it was ‘ab­so­lute nonsense’.

Mr Drech­sler, who is due to step down from his role next week, said the £77.5bil­lion-a-year car in­dus­try is par­tic­u­larly vul­ner­a­ble if ‘fric­tion­less trade’ with the EU comes to an end and tar­iffs and border checks are in­tro­duced.

He told BBC Ra­dio 4’s To­day pro­gramme: ‘If we do not have a cus­toms union, there are sec­tors of man­u­fac­tur­ing so­ci­ety in the UK which risk be­com­ing ex­tinct. Be in no doubt, that is a re­al­ity.’

He also sug­gested Bri­tain would be bet­ter off us­ing the scale of the EU to ne­go­ti­ate trade deals than try­ing to do it on its own.

‘There’s zero ev­i­dence that in­de­pen­dent trade deals will pro­vide any eco­nomic ben­e­fit to the UK that’s ma­te­rial – it’s a myth,’ he said. But Mr Drech­sler’s com­ments were im­me­di­ately dis­missed by pro-Brexit cam­paign­ers, who pointed out that the CBI still re­ceives sig­nif­i­cant fund­ing from Brussels.

Tory MP Jacob Rees-Mogg said: ‘The big­gest risk of ex­tinc­tion is to the CBI, as once we’ve left and pros­pered, peo­ple will re­alise it is a point­less or­gan­i­sa­tion that gets ev­ery­thing wrong.

‘This is clas­sic scare­mon­ger­ing that the CBI is so prac­tised at. Our car com­pa­nies ex­port glob­ally as well as to the EU. A num­ber of com­pa­nies have made very sig­nif­i­cant com­mit­ments to build new prod­ucts in the UK.’

Fel­low Tory MP An­drew Brid­gen said: ‘This is ab­so­lute nonsense, com­plete guff, but it is not a sur­prise. The CBI has a very close re­la­tion­ship with the EU and re­ceives a lu­cra­tive in­come from them.’

He added: ‘Bri­tain has some of the most ef­fi­cient car fac­to­ries in the world. The fact is that the CBI rep­re­sents the big­gest com­pa­nies in Bri­tain which love be­ing in the EU as they are big enough to cope with the ex­tra reg­u­la­tion that pro­tects their mar­ket­place from smaller com­peti­tors.’

The CBI said it re­ceived £138,000 from the Euro­pean Com­mis­sion last year – ac­count­ing for 0.6 per cent of its in­come – to carry out eco­nomic sur­veys and col­lect data for the UK.

But crit­ics point out that it has long It was had an en­thu­si­as­tic close ties with cam­paigner Brussels. for the euro, ar­gu­ing that Bri­tain should join the sin­gle cur­rency when it launched in 1999. And it was a key mem­ber of the Project Fear cam­paign in the run up to the ref­er­en­dum in June 2016 to per­suade the pub­lic to vote to stay in the EU. Be­fore the ref­er­en­dum, Vote Leave cam­paign­ers said the CBI ‘is more in­ter­ested in be­ing the voice of Brussels rather than of Bri­tish busi­ness’.

Ir­ish-born Mr Drech­sler, 62, a self-con­fessed EU zealot who has al­ways sung the praises of Brussels, came un­der fire in March af­ter urg­ing bosses to turn the pub­lic against Brexit.

His lat­est warn­ings about the risks of leav­ing the cus­toms union echo those from ma­jor car man­u­fac­tur­ers in­clud­ing BMW and Nis­san. They are wor­ried that the smallest hold-ups at ports could throw their finely tuned pro­duc­tion lines out of sync and lead to fac­to­ries shut­ting down.

But at the same time, a suc­ces­sion of for­eign car man­u­fac­tur­ers – in­clud­ing Nis­san, BMW, Toy­ota and Vaux­hall owner PSA Group – have in­vested heav­ily in their plants in the UK and com­mit­ted to build­ing cars here long af­ter the coun­try has quit the EU.

David Buik, a vet­eran City com­men­ta­tor and Brexit cam­paigner who now works for the in­vest­ment firm Core Spreads, said: ‘It suits the CBI to be melo­dra­matic, but big com­pa­nies tend to be more prag­matic than trade bod­ies.

‘It is im­pos­si­ble to think that these large car man­u­fac­tur­ers would have pro­ceeded on this ba­sis if they were so pet­ri­fied of Brexit. They would have run for the hills by now.’

‘CBI is a point­less or­gan­i­sa­tion’

SOME peo­ple learn noth­ing from past mis­takes. First, CBI pres­i­dent Paul Drech­sler threw his weight be­hind the dis­cred­ited Project Fear, which pre­dicted mass un­em­ploy­ment and an im­me­di­ate re­ces­sion af­ter a Brexit vote.

Now he steps up the scare­mon­ger­ing, with an hys­ter­i­cal warn­ing that parts of man­u­fac­tur­ing face ‘ex­tinc­tion’ un­less Bri­tain re­mains in an EU cus­toms union.

But then what can we ex­pect of the head of an or­gan­i­sa­tion with a long his­tory of get­ting ev­ery­thing wrong – from sup­port­ing Ted Heath’s dis­as­trous eco­nomic poli­cies to cham­pi­oning Bri­tish mem­ber­ship of the cat­a­strophic one-size-fits-all euro?

Mean­while, it emerges that Mr Drech­sler took a se­cre­tive £7.4mil­lion pay­off from his last job be­fore mov­ing to the CBI, where he has lec­tured other bosses about trans­parency and ex­cess pay. One ques­tion: why should any­one lis­ten to such a hyp­ocrite?

WHATa re­mark­able co­in­ci­dence that two of the top awards on last week’s honours list went to peo­ple who sit on the very bod­ies that hand out gongs – while three more went to writ­ers whose lit­er­ary agent sits on one of the scru­tiny com­mit­tees? Doesn’t this smack of ar­rant crony­ism? Who’s go­ing to scru­ti­nise the scru­ti­neers?

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