Weekly News Review | 4 December 2017 | Automotive Purchasing and Supply Chain Automotive Purchasing and Supply Chain

Talking Point

Brexit - why the silence from government?

Last week I was invited to the Society of Motor Manufacturers and Traders’ 101st. Annual Dinner in London. As always, it was a most convivial evening attended by over 1,100 guests comprising industry leaders, government representatives and other industry stakeholders. Before and after dinner speakers ranged from the humourous in the form of Jennifer Saunders and Bill Bailey to the serious represented by SMMT President Tony Walker, Chief Executive Mike Hawes and Greg Clark MP, Secretary of State for Business, Energy and Industrial Strategy.

All the speakers bar one made reference to Brexit, the biggest challenge the UK automotive industry has, arguably, ever faced. The one exception? The Secretary of State. Given the nature of his audience and the seriousness of the issue one might have expected at least a passing reference to it. But no, it was not to be.

Tony Walker stressed the critical importance of the government not undermining the UK automotive industry’s hard won competitiveness due to slow progress on Brexit. He underlined the fact that there is no substitute for free and frictionless trade, and called for quicker progress on agreeing a transition period following the UK’s departure from the European Union. Few in the audience would have disagreed with him. Indeed, among the guests, from all sectors of the industry, to whom I spoke that evening, Brexit was the main subject of concern. So why no mention of it from Mr. Clark?

Apologists for the Secretary of State will no doubt point out that the outcome of the Brexit issue is still subject to negotiation and is, to say the least, unclear. They may well have a point. Trade has yet to feature in the Brussels negotiations, having been apparently relegated to a position behind the so-called divorce payment, human rights and the Irish border. All of which are important considerations but hardly top of mind for the evening’s audience.

SMMT has recently released new figures illustrating the high stakes of a no deal Brexit for the automotive sector. The risk comes not just from costly World Trade Organisation tariffs – which would add at least £4.5 billion to the industry’s annual overheads – but also from the imposition of customs checks, red tape and fees on goods that currently move friction free across borders.

The situation is potentially grave for the automotive industry in this country. It is high time the government addressed it.

On a personal note, congratulations from all at Three 6 Zero to Simon Duval Smith for winning the Business Writer of the Year Award at the Guild of Motoring Writers' Annual Awards, well done Simon.

Sam Ogle

Sam Ogle

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