We published the results this week of a survey of SMMT members to gauge sentiment around Brexit and to hear how companies have already been affected. 80.3% of respondents said that ‘no deal’ would damage their business’s future, and previous research has demonstrated that more than £500m has already been spent by UK Automotive to mitigate against the risks of ‘no deal’.
This week’s progress towards a deal is welcome then – it moves us further away from a damaging ‘no deal’ Brexit and the huge and immediate tariff hit that would ensue. To give the UK automotive industry certainty, however, and to assure its continued global competitiveness, we need a truly ambitious future relationship – one based on tariff-free and frictionless trade.
Amid the flurry of last-ditch negotiations, it’s vital that politicians remember the damage that has already been caused by Brexit uncertainty and the fear of no deal – investment is haemorrhaging, competitiveness undermined, jobs cut in the UK and vast sums wasted on the impossibility of preparing for ‘no deal’.
Automotive is the UK’s single biggest exporter of goods, trading with some 160 countries worldwide, and accounting for more than 14% of total exports. Our survival matters not just to the UK economy but to society and the hundreds of thousands of people whose likelihoods depend on the sector.
So we need to ensure we remain competitive. The deal offers a transition period – albeit a very short one that is already diminishing – in which the international trading conditions remain as they are as the UK and the EU negotiate the future trading relationship in detail. Those negotiations must, for our sector at least, be ambitious. More ambitious, moreover, than the current political declaration aspires. The future relationship must replicate all of the benefits we currently enjoy, delivering the free and frictionless trade on which our industry depends for its global competitiveness.
UK Automotive has many strengths – creativity and innovation being at the forefront. Indeed, we saw this in evidence at the SMMT Future Mobility Challenge, held this week in East London which brought together automotive companies and tech SMEs and start ups. We need to build on this innovation and ensure we have a domestic industry able to take advantage of these opportunity. Without the right conditions, however, our advantages will be lost.