CEO Update

No deal is not an option

21 September 2018 #CEO Update

This week SMMT headed to Brussels, meeting with industry organisations and decision makers to illustrate the impact of a ‘no-deal’ Brexit. It was part of efforts to make sure that negotiators in the EU, as well as in the UK, are aware of the pan-European consequences for the automotive industry should the worst happen.

The October summit and, potentially, November’s proposed emergency meeting of European leaders represent the last chance to secure a withdrawal agreement for the UK. Much of the headlines over the past 24 hours have focused on the ‘Chequers’ White Paper and whether it will be acceptable to either side. Chequers isn’t perfect. But it is a step in the right direction, seeking to replicate many of the benefits of the single market and customs union as we leave the EU – evidence that government recognises the importance of the automotive sector and the need to safeguard our competitiveness.

The discussion over the coming weeks, however, will be about the withdrawal itself. We need a status quo transition so that the fine print of tariffs, trade, customs and regulation can then be worked out. Whatever the future arrangements, for our Sector no other arrangement will be better than that which we currently enjoy.

Whether or not the Chequers proposal is accepted by the European Union or Westminster MPs, it’s important that the principle of free and fair trade between the UK and EU is taken forward regardless. Our future trade with our closest and largest partner must be completely without friction, tariffs or disruption to supply chains and just-in-time manufacturing.

Make no mistake, ‘no-deal’ would be a disaster for the automotive industry. This isn’t a political point, it’s about the business case – teasing apart a single industry built across borders, that leads the world on technology and innovation is not an overnight job. Without a withdrawal agreement, at the very minimum there will be severe disruption across the whole of Europe. Tariffs alone should be enough to focus minds but hundreds of thousands of jobs and tens of billions of pounds in crucial business must be safeguarded.