CEO Update

‘No deal’ threat still looms large

15 March 2019 #CEO Update

Despite the overwhelming majority in the House of Commons this week against a ‘no deal’ departure from the European Union, the threat of a cliff-edge Brexit still looms large on 29 March. Without a change to the law passed to enact Article 50 nearly two years ago – and agreement from the EU to an extension – that date remains the day on which we are due to leave.

‘No deal’ must be finally and demonstratively taken off the table – the consequences to the automotive industry of an abrupt, disorderly exit have been made clear again and again. It would be a disastrous development for the whole of the UK and the consistent warnings from across the business spectrum must be taken seriously. We urge MPs to find consensus – there is too much at stake in terms of business and livelihoods.

The automotive industry has often been referenced during the debates and discussions of the last three years. Sometimes accurately, other times misleadingly. This week SMMT released a rebuttal of 13 common ‘Brexit myths’ that have often been used about the sector such as a ‘no deal’ Brexit reducing car prices and increasing choice, or the idea that the industry has simply been scaremongering. The evidence speaks for itself – Brexit has already cost the country dear in jobs and competitiveness, and we haven’t even left the EU yet. The reality of life on the ground for the UK automotive industry is that companies have lost business and felt the impact of the decision to leave.

The government also announced this week the list of trade tariffs it would apply in the event of a ‘no deal’ Brexit – but no policy on tariffs can come close to compensating for the disruption, cost and job losses that would result from ‘no deal’. Neither does a short extension to our Article 50 deadline in itself offer any immediate solution – it will simply move the ‘no deal’ cliff edge a little further away. We cannot operate, or even plan for, a series of short-term postponements. Any extension of Article 50 must be purposeful and long enough to give business stability and Parliament time to reach consensus to end the deadlock.