A ‘No deal’ on Brexit would be ‘catastrophic’ for Britain leading to factory closures that would cost thousands of jobs, motor industry chiefs warned last night.
Car bosses said ‘crashing out of the EU’ would have ‘immediate and devastating impacts’ with border ‘chaos’ severely disrupting UK car production.
The withdrawal agreement negotiated between Theresa May’s government and the EU had brought Britain back from the brink of a ‘cliff edge’ and should be supported because it gave a ‘breathing space’ to thrash out more detailed plans for tariff-free ‘frictionless’ trade deal, they said.
But while insisting that ‘No Deal is not an option’ car bosses conceded that the best Britain could hope for now from a Brexit deal was ‘damage limitation’.
Car bosses have warned that failing to agree Theresa May’s Brexit deal would be ‘catastrophic’
They said political allies were needed in Government and beyond ‘to avoid catastrophe; to give us breathing space; and to deliver a competitive future.’
The warnings ahead of next month’s crucial Brexit vote in Parliament were given by the Society of Motor Manufacturers and Traders (SMMT) at their annual dinner in London attended by Business Secretary Greg Clark and more than 1,000 business leaders.
These included the bosses of major car-makers with factories in the UK including MINI, BMW, Nissan, Honda, Toyota, Peugeot-owned Vauxhall, Bentley, and Rolls-Royce.
SMMT chief executive Mike Hawes rejected accusations by critics that car-makers were ‘scaremongering’ and stressed instead: ‘No deal would be catastrophic. Plants will close. Jobs will be lost.’
Three quarters of SMMT members believe a no deal Brexit will threaten their viability;
20% say they’ve already lost business; one in 10 is cutting jobs, a fifth implementing contingency plans and some executing relocation plans. ‘And we haven’t left yet’, said Mr Hawes adding:‘ These are the actions of people who make things: cars, trucks, parts, buses, as distinct from those that make up the phrases that are painted on the side of some buses. ‘
SMMT chief executive Mike Hawes (pictured) rejected accusations by critics that car-makers were ‘scaremongering’
Mr Hawes said: ‘Brexit remains the biggest challenge for all of us. It is sapping time, energy, cash. It’s putting the brakes on investment –in technology, in people, in our future.’
‘The past weeks have crystallised the challenge facing Government; ‘Deal or No Deal’; transition or not; stability or strife.
He rejected suggestions that the UK could operate happily under World trade organisation (WTO) insisting:’
‘We need a deal’.
‘Leaving is not what we wanted. For us, Brexit is about damage limitation. There is no ‘Brexit dividend’. So we need a deal –now. And that deal must be ambitious for the future.
‘We need frictionless trade with our most important market. Nothing less will do. ‘
The SMMT’s Mr Hawes said: ‘The Withdrawal Agreement – which has been hard-fought – delivers a transition period, which steps us back from the cliff edge.
‘It is legally binding. The future framework is not. The work starts here and must start quickly. We need an ambitious future relationship. One that replicates the benefits of the customs union and the single market. No tariffs. No quotas. No Rules of Origin. No regulatory divergence. No border checks. Frictionless trade.’
He cited a ‘direct correlation’ between friction and competitiveness: ‘The more the friction, the weaker our competitiveness.’
But he also praised Business Energy and Industrial Secretary Greg Clark, who attended and spoke at the evening, as a politician who ‘gets it’.
SMMT president and managing director of Toyota Motor Europe’s London Office Tony Walker told the audience: ‘No deal is not an option. In the short term, crashing out of the EU would have immediate and devastating impacts, with border chaos disrupting the ‘Just in Time’ basis on which our business depends. Disruption could last for weeks – even months.’
The withdrawal agreement negotiated between Theresa May’s government and the EU had brought Britain back from the brink of a ‘cliff edge’, motoring executives said
He said it was ‘unimaginable’ implement full WTO import and export procedures ‘overnight’ adding: ‘For the longer term, a ‘no-deal’ Brexit would harm our competitiveness, undermine sales and cost jobs. Future investment would be jeopardised.’
Mr Walker said: ’The Prime Minister has now negotiated a deal and this is what we have in front of us today. We need the certainty of a deal, not more uncertainty.
‘It is vital we have free and frictionless trade, with zero tariffs and common technical standards. Without these we risk losing all we have achieved in building a world-class, competitive automotive sector.’
The UK automotive industry with an £82billion annual turnover employs 186,000 people directly in manufacturing and supports 856,000 jobs among 2,500 component suppliers, with 30 manufacturers making 70 vehicle models
Last year the UK built 1.67million cars of which 80 percent are exported.