A no-deal Brexit risks “destroying” Britain’s car industry, the sector’s trade body has warned as Theresa May faces a crushing defeat on her deal in the House of Commons.
Disruption to vehicle manufacturing would be felt within hours due to just-in-time production, which relies on thousands of lorries and shipments moving across borders without delay, the Society of Motor Manufacturers and Traders (SMMT) said.
MPs will vote on Tuesday evening on whether to accept the government’s proposals with a decisive rejection looking increasingly likely.
That would potentially bring a no-deal scenario closer to realisation, an outcome that would be disastrous for the UK’s vehicle makers, according to SMMT boss Mike Hawes.
He dismissed talk among some Brexit-supporting MPs of a “managed no deal” as fantasy, and argued that the car industry would immediately face shortages, disruption, additional costs and uncertainty.
“As MPs prepare to vote on the government’s Brexit deal, we urge them to remember they hold the future of the British automotive industry – and the hundreds and thousands of jobs it supports – in their hands,” Mr Hawes said.
New UK car registrations slumped 6.8 per cent last year thanks to confusion around diesel emissions rules, an economic slowdown in China and political uncertainty surrounding Brexit which has resulted in consumers putting off purchases. Jaguar Land Rover announced 4,500 job cuts last week while Ford workers have been warned of potential redundancies this year.
A poorly managed Brexit risks further damaging an important part of the economy, the SMMT warned on Tuesday.
“Brexit is already causing us damage in output, costs and jobs, but this does not compare with the catastrophic consequences of being cut adrift from our biggest trading partner overnight,” Mr Hawes said.
“The just-in-time nature of automotive means the impact of no deal will be felt not in months or weeks but hours.
Mr Hawes added: “Both government and parliament have a responsibility to take no deal off the table or risk destroying this vital UK industry,” Mr Hawes said.
The SMMT’s research suggests that import tariffs alone could increase the price of cars imported to the UK from the Continent by an average of £1,500.
Non-tariff barriers such as proving compliance with environmental standards, quotas or rules of origin risk pushing up prices further.