With Brexit negotiations underway, the future for the UK’s economy, and in particular the motor industry, is facing a lot of uncertainty. In fact, experts have warned that the motor industry could become non existent if the UK fails to secure a good trade deal with the EU. And even if they did secure a deal, CBI president, Paul Dreschler, has warned that there is “zero evidence” that it would be beneficial to the industry.
He added that, without “real frictionless trade”, there would be serious issues for British manufacturers. “If we do not have a customs union, there are sectors of manufacturing society in the UK which risk becoming extinct,” he said. “Be in no doubt, that is the reality. There’s zero evidence that independent trade deals will provide any economic benefit to the UK that’s material. It’s a myth.”
Michel Barnier, the EU’s chief negotiator, said that if the UK remains in the customs union and EEA then it could still maintain the same frictionless trade it currently enjoys. However, Theresa May has already said she wants to avoid staying in the EEA, and instead is hoping to “seek to negotiate a customs arrangement”.
Mr Dreschler has expressed his concerns about the delays this could cause for the UK economy, and in particular future business investment. “We already know tens of millions, in fact hundreds of millions have been invested by UK pharmaceutical and finance companies to create continuity post a worse-case Brexit scenario. Tens of millions. What could we have done with that money?”, he said.
The falling levels of confidence this is creating can already be seen across the UK. For example, the manufacturing industry saw its worst month in over five years this April, with output falling by 1.4%. This is the lowest it’s been since October 2012 and well below the predictions. Jaguar Land Rover has announced it will be cutting 1000 jobs in the UK and relocating some of its production from the UK to Slovakia. Nissan has also confirmed that several hundred UK jobs will be lost in its factories.