There is a lot of loose talk about the imminent demise of the UK car industry, although that itself is a misnomer. There are no UK-owned car makers, all are foreign-owned but they employ a lot of people and use a lot of British suppliers. Altogether about 800,000 jobs are dependent on the car business. The problem is the switch over to electric vehicles and the need for batteries. Most batteries come from Asia at the moment. Nissan has their own small supplier in Sunderland and the EU is catching up with quite a few giga factories either already in production, being built, or planned.
By next year, cars imported into the EU should have sufficient local content (45%) to avoid tariffs under the Rules of Origin. It’s pretty clear we can’t meet that as Stellantis (the owners of Vauxhall) and Jaguar/Land Rover have made clear this week. JLR is demanding the government stump up the money to persuade someone to come here and build a battery plant.
This is because the attempt by British Volt to do it collapsed last year. BV's co-founder Orral Nadjari has told Sky News that we have missed the boat and blamed government bureaucracy for delaying the funds that would have got the project off the ground.
Jeremy Hunt has apparently offered £500 million to JLR, but this isn't really actual money, it's a 'guarantee' against a £625 million loan from 12 commercial banks. We don't know if that's enough yet.
Meanwhile, the government is said to be trying to persuade the EU to delay the 2024 date for the 45% local content requirement to apply. The inews reported the EU was not going to change but they were speaking to an official. This is a political issue.
The German car companies are also lobbying the EU for the same reason. They’re concerned about tariffs on their UK exports because they can’t meet the date either.
"Ford, which makes electric cars in Germany and parts in the UK, said it was 'calling for current trade requirements to be extended to 2027, to allow time for the battery supply chain to develop in Europe and meet EV demand'. If implemented as planned, the requirement would add 'pointless cost to customers warning to go green', Ford said."
It’s clear to me that the date will be pushed back, but it doesn’t mean British auto workers can breathe easier. The EU may agree to a reprieve but not perhaps to 2027 and we are so far behind now that a short delay won’t help that much. The vast EU car industry will be ready far sooner than we are.
What incentive is there for the EU to help us? They’re now a competitor and would love to get JLR to build vehicles in the EU. BMW electric minis are all ready to be built in Germany and China.
Britain is going to suffer because its car industry is simply too small, too foreign-owned, and too isolated after Brexit. It may survive in the short term but its future doesn't look secure at all.
The business secretary Kemi Badenoch, claimed in parliament that none of this is due to Brexit:
“The issue that the automotive industries are talking about is around rules of origin. This is something that the EU is also worried about because the costs of the components have risen,” she said in the Commons.
Ms Badenoch added: “This isn’t to do with Brexit – this is to do with supply chain issues following the pandemic and the war in Russia and Ukraine.”
She is taking us for fools - and everybody knows it.
The woes of the car industry and its 800,000 workers and their families don't worry true Brexiteers of course. Matthew Lynn in The Spectator says Britain should get out of the electric vehicle business altogether, "We are not going to be big players in EVs, and there is no point in trying to become one now."
But that is all down to Brexit which he seems to think will come to our rescue with "plenty of other industries [Britain] can concentrate on. We are strong in life sciences, in media, in professional services, and with only a small amount of effort, and by keeping regulation light, we could be strong in Artificial Intelligence. EVs are not worth the pain, or the inevitably huge losses involved."
We shall see, but I doubt it very much.
Fraser Nelson, The editor of The Spectator, has an article about immigration and the promises made by Boris Johnson, himself a former editor of the magazine.
"Both sides agreed Brexit would mean lower migration and higher salaries. Not many would make that case now. Rather than rising, real-term incomes are midway through their sharpest fall since postwar records began.
"A milestone was passed this week when it emerged that 20 percent of the UK workforce is foreign-born – making us more of an immigrant country than even the United States."
Brexit was supposed to (a) reduce immigration; (b) force employers to pay higher wages and in doing so; (c) make us all better off.
We are now looking at 700,000 immigrants, job shortages, both skilled and unskilled, everywhere, the deepest fall in living standards for decades, and plunging trade. If a plan ever went badly wrong it was Brexit. It has not just failed to deliver but has given us the absolute reverse of what was promised.
Finally, Andrea Jenkins, Tory MP for Morley and Outwood in West Yorkshire, has written to Rishi Sunak demanding the UK withdraw from the European Court of Human Rights (ECHR). This ought to shock us out of our complacency but given the events this week at the National Conservativism conference, it actually looks quite mild. Winston Churchill would be turning in his grave at the depths the Conservatives are plumbing.
— Andrea Jenkyns MP 🇬🇧 (@andreajenkyns) May 17, 2023
What is utterly mind-blowing is that she (an MP) thinks the ECHR is the same as the ECJ - the European Court of Justice. Her letter says “Millions in our nation voted to end the jurisdiction of this foreign court.” She is talking about the ECHR.
Errrr.. no we didn’t unless I missed that referendum. If you want to know how we have ended up in the mess we are, look no further than Morley and Outwood. How do these people ever get elected?
And finally, finally do read David Gauke's piece in The New Statesman: The National Conservatives are a glimpse of the Tories’ grim future.
Gauke suggests someone like Braverman is quite likely to wind up as party leader after the next election, which I think is true. But also I don't believe it will survive as one party. She, or someone not dissimilar in outlook, may lead the biggest rump and it will look like UKIP or REFORM but it will have the same problems, if not worse, in getting MPs elected.
I say worse because by 2024 I think the voters will be heartily sick of constantly being lied to while the government becomes more and more authoritarian. Even Farage admits Brexit, the flagship project of the Tory party's extreme right, has failed and eventually the party will need to come clean about it.
But by then the damage will be clear and I am not sure they will ever be elected again,
