The Birmingham Mail (HERE) carries a report of what Ralf Speth, chief executive of Jaguar Land Rover apparently told Theresa May yesterday when she visited the West Midlands and announced £100 million of government money to "ensure the UK remains a world leader in the design and manufacture of "zero-emission" vehicles". I am not sure we're the leader at the moment so "remaining" the leader might be a bit hard.
Anyway, Mr Speth laid it on the line to the PM about the consequences for the UK car industry of leaving the EU and said, "Just one part missing could mean stopping production at a cost of £60m a day. That is a huge risk. We depend on free, frictionless, seamless logistics."
And he warned: "We, and our partners in the supply chain, face an unpredictable future if the Brexit negotiations do not maintain free and frictionless trade with the EU and unrestricted access to the single market".
The bizarre thing about Brexit and "taking back control" is that thousands of jobs are now relying on the EU letting us continue with free, frictionless and seamless logistics, something which looks unlikely unless we remain in the CU and the SM. We have handed control to Brussels. Where we used to sit around the table and make the rules, we are now waiting outside the room to see if we can pick up a few scraps.
Speth went on:
"We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees. A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year."
He also said it was already cheaper to make cars in Slovakia than in Britain, adding: “What decisions will we be forced to make, if Brexit means not merely that costs go up, but that we cannot physically build cars on time and on budget in the UK?"
This comes on the same day the Jacob Rees-Mogg is helping to launch Economists for Free Trade's plan to leave without a deal and trade under WTO rules, claiming it would boost the economy for £1 trillion over 15 years. The was branded "quite mad" (HERE) by Jonathan Portes, a leading economist, tweeting:
This is quite, quite mad. But also fundamentally dishonest. Even taking modelling at face value, it's not a "World Trade Deal", it's unilateral abolition of all UK tariffs *and non-tariff barriers* - ie removing UK health, safety, environmental, emission standards on all imports. https://t.co/FfEwnykO2a— Jonathan Portes (@jdportes) 11 September 2018
This is precisely what Ralf Speth was warning about. Trading on WTO terms would destroy free, frictionless and seamless trade with the EU. I wonder what the car workers in the West Midlands will make of it. Patrick Minford wants to cut all tariffs, something he freely admitted some years ago would "eliminate manufacturing" in the UK. I'm sure all those engaged in manufacturing around Birmingham will be pleased to hear that.
Some other tweets by the way which might euphemistically be described as scathing about the EFT report:
Some other tweets by the way which might euphemistically be described as scathing about the EFT report:
CORRECTION: "Economists for Free Trade" - Trading on ‘WTO Rules’ is NOT the best option: https://t.co/ICOYvv5zlg— UK TPO (@uk_tpo) 11 September 2018
As I understand the case it is: China, India and USA are not EU members, don’t have FTAs with the EU, and have higher growth rates than the EU, THEREFORE the UK will have higher growth when it’s not in the EU. It would be generous to describe this argument as “thin”.— Alasdair Smith (@AlasdairMSmith) 11 September 2018
