Calls for Brexit clarity as car manufacturing declines

Industry is demanding more clarity from government on its Brexit plans after new figures revealed a sharp year-on-year decline in the automotive sector.

A report published today by the Society of Motor Manufacturers and Traders (SMMT) showed a 13.7 per cent drop-off in the number of cars produced in June 2017, compared to 12 months previous. Figures for the year-to-date are only down 2.9 per cent on 2016, and the total is still the second highest in 12 years. However, the June numbers mark the third successive month of decline and concerns abound over the health of the industry in a post-Brexit UK.

(Credit: SMMT)

“World-class engineering, productivity, strong government collaboration and massive investment in the past few years have helped UK automotive become a global success story,” said Mike Hawes, SMMT chief executive.

“At the heart of this has been the free and frictionless trade we’ve enjoyed with the EU – by far our biggest customer and supplier. But Brexit uncertainty is not helping investment and growth is stalling. The government has been in “listening” mode but now it must put on the table the concrete plans that will assure the future competitiveness of the sector.”

Commenting on the figures, Unite assistant general secretary for manufacturing Tony Burke echoed the calls of the SMMT, and urged the government to provide more clarity.

“The Brexit effect is now real and is biting into an important UK manufacturing sector, our world-class car industry,” he said. “Government must hear the alarm bells ringing and take action.”

(Credit: SMMT)

“Not only are consumers shying away from buying cars because of the massive economic uncertainty we are in, the industry is also putting a brake on investment until they hear from government that our existing friction-free trading arrangements will be secure once we are out of the European Union.

“The auto sector, in common with our other superb high-tech industries, is built on a complex supply chain.  Any interruption to that and jobs and skills are at threat.”

Home Office announcement

Meanwhile, the Home Office has declared that EU-UK freedom of movement will end in March 2019, with a new immigration system set to replace it. Speaking on BBC Radio 4’s Today programme, immigration minister Brandon Lewis declined to give details on the new system, saying plans would be revealed in a white paper later in the year.

Lewis was speaking in the wake of a Home Office announcement that a ‘detailed assessment’ on the impact of EU migration is to be carried out by the Migration Advisory Committee (MAC). Coming almost exactly 13 months after the Brexit referendum, the assessment will look at the costs and benefits of EU citizens living and working in the UK, how migration is distributed regionally, how it affects competitiveness and how it impacts different sectors. The MAC is due to report on its findings in September 2018, just six months before a new immigration system will need to be implemented.


(Credit: jeffdjevdet via flickr)

Commenting on the announcement, Tim Thomas, director of Employment & Skills Policy at manufacturers’ organisation EEF, said: “Manufacturers rely heavily on EU workers as well as non-EU nationals to fill crucial roles within their businesses and any immediate restriction in this supply would only exacerbate the current skills crisis in the sector.”

“Many manufacturers will see today’s announcement as a first step, with the government for the first time acknowledging that future migration changes will be implemented in a measured way over a period of years. Whilst this announcement was much needed, the fate of EU nationals already in the UK before Brexit now needs settled quickly, positively and conclusively.”