The government must maintain the existing customs union membership and single market benefits as part of its Brexit negotiations or risk causing grave damage to the UK car industry, Society of Motor Manufacturers and Traders (SMMT) chief executive Mike Hawes has warned.
Membership of the customs union and maintenance of the benefits the single market delivers is seen as crucial as the automotive industry relies on the seamless movement of goods around Europe, with more than 1100 trucks from the EU bringing components to UK car and engine plants every day.
Speaking at the SMMT’s annual conference, Hawes said: “There is growing frustration in global boardrooms at the slow pace of negotiations. The current position, with conflicting messages and red lines goes directly against the interests of the UK automotive sector which has thrived on single market and customs union membership.
“There is no credible ‘plan B’ for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU. Government must rethink its position on the customs union.
“There is no Brexit dividend for our industry, particularly in what is an increasingly hostile and protectionist global trading environment. Our message to government is that until it can demonstrate exactly how a new model for customs and trade with the EU can replicate the benefits we currently enjoy, don’t change it.”
Hawes comments followed the release of industry figures showing record turnover among automotive businesses in the UK, which he said were the result of long planned investments which were now slowing as a result of uncertainty caused by Brexit.