Car industry boss urges government to stay in single market

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The president of motor industry trade body the SMMT has warned that the sector faces a £4.5bn tariff threat if the UK leaves the European single market.

Talking at the group’s annual dinner, Gareth Jones underlined the industry’s recent impressive growth and outlined the risks to investment and success if the benefits of the single market were lost.

136541_production_of_the_nissan_juke_and_nissan_sunderland_plant
The UK government recently pledged to ensure that Nissan's Sunderland plant remains competitive.

New SMMT analysis suggests that EU tariffs on cars alone could add at least an annual £2.7bn to imports and £1.8bn to exports. Import tariffs alone could push up the list price of cars imported to the UK from the continent by an average of £1,500 if brands and their retail networks were unable to absorb these additional costs.

Jones’ comments came days after SMMT published production figures showing UK carmakers are on track to set a new record for exports and beat the production volumes achieved last year. Jones stressed that this success was largely the result of multi-billion pound investment decisions made years before the EU referendum was even a prospect.

The industry’s fundamental strengths, including one of the world’s most highly skilled and productive workforces, will stand it in good stead to face challenges, but success cannot be taken for granted, Jones said. “The renaissance is down to years of hard work, hard won investment and long-term collaborative partnership between industry and government... We operate in an intensely competitive environment. We need to create the right conditions for future competitiveness, for developing skills and securing the strength of our economy by investing in R&D, and enabling new technologies to be developed here in the UK.”

Commenting on the strength of the relationship between government and industry, not least through the Automotive Council, Gareth Jones said: “The government has – commendably – put industrial strategy at the heart of business and the department for business. It does so as it faces its toughest challenge – leaving the EU. We must make the right decisions: on trade, on regulations and on business competitiveness."

He went on to say: "The challenge now is to make a success of the new future. We want a strong UK economy and we want to see the UK's influence in the world enhanced. But this cannot be at the expense of jobs, growth or being an open, welcoming trading nation. You, our members, have told us what you want; membership of the single market, consistency in regulations, access to global talent and the ability to trade abroad free from barriers and red tape."