I posted about this very same issue at the end of July.
I want to recall the words of Lord Digby Jones on Andrew Neil’s show before the referendum, when he infamously said: “Not one job in Britain is at risk" as a result of Brexit because we would get a tariff-free trade agreement. He said we need to "kill this canard" that jobs would be lost if we voted to leave the EU. It was pure hubris on his part, and now thousands of car workers, many of whom will have heard Jones at the time and voted to leave the EU, are paying the price.
I was always amazed that anyone ever took him seriously. Here is the idiot himself:
Jones was a lawyer. He spent 20 years at Edge & Ellison, a legal firm based in Birmingham, finishing up as a senior partner before becoming chairman of the West Midlands Regional Council of the CBI (Confederation of British Industry) and finally being appointed Director-General in 2000. He knows nothing of manufacturing - and it shows. He was elevated to the Lords in 2007 as Baron Jones of Birmingham and stood down in 2020.
Well, Jones was right about a largely tariff-free agreement, but that has only been a sticking plaster. It was the sheer uncertainty around Brexit that started the rot. If only the BBC had tried to be less balanced in 2016, giving airtime to men like him. It was all totally foreseeable and even blindingly obvious.
Nobody regrets what has happened more than me. And I’m certainly not going to suggest it’s all down to Brexit, because it isn’t, but it is equally foolish to deny that leaving the EU single market played no role. A senior research analyst at Fitch Solutions, a group that provides data for credit risk and investment strategies, Santiago Ariel, said: “Obviously, Brexit had a big impact. It created uncertainty and complicated future visibility."
As a result of this uncertainty, new investments suffered, just as the industry was gearing up for the massive changes being brought by the transition to electric vehicles. Brexit could not have come at a worse time.
The piece says that the TCA agreement with the EU that guarantees "continued tariff-free trade soothed the industry's concerns," but that only applies to cars with a high percentage of UK parts. I’m sure most of what goes into the cars we produce in Britain is made here, but the process means manufacturers have to be aware of where they source components from. And it adds paperwork.
When car production falls, the suppliers that make intermediate parts such as brake discs, wiring harnesses, windshields and so on, also wind down. The entire ecosystem shrinks, making it harder to keep up the minimum local content when complying with the Rules of Origin. And, when other manufacturers consider building cars here in the future, they look at the emaciated supply chains and a veritable wasteland as far as the necessary infrastructure is concerned.
The more intermediate parts that have to be imported, the less attractive a UK factory becomes. Why ship hundreds of parts to Britain just to assemble them here?
There is talk of new investment in EVs, but one unnamed senior figure in the European EV industry said he doesn't believe the UK will ever become a major player in the EV market: "I don't think governments have spent the necessary time and energy preparing for the shift to EVs."
If this anonymous executive is right - and EVs are the future - we will be importing more and exporting less going forward.
The EV editor at The Independent, Steve Fowler, is quoted as saying that the difference between this country and the continental Europeans is that "We tend not to support our homegrown industries in the same way that other countries do". No, other countries don’t vote to quit the single market.
Fowler also adds that there is already "a bit of a brain drain of talent, because the opportunities, bluntly, aren't here in the UK.” This is the shrinking ecosystem at work.
The article tries to claim that part of the problem is high labour costs here, while conceding that in Germany, they are even higher!
It is all very complicated no doubt, but Brexit separated us from European thinking and solidarity. When making decisions about where to produce vehicles, Britain has moved itself into the second division with Brexit. Moving staff has also become more difficult. Companies with existing UK plants were never going to close them overnight, but Brexit has starved them of investment until they are no longer viable, profitable units.
You can sugarcoat the problems, but you can’t deny that Brexit - and even arguably holding the referendum in the first place - was a very bad, short-term decision. It’s no coincidence that the recent high point of 1.82 million was reached in 2016, although Brexiteers would like to claim that it is.
Doing a bit of research for this post, I Googled to find Nissan UK's output since 2016, and found it reached a peak of 519,000 in 2017 but has now fallen to around 325,000. The AI answer included this statement concerning factors affecting output:
"The decline in production can be attributed to various factors, including the impact of Brexit on the automotive industry and the COVID-19 pandemic's effect on global supply chains."
It also makes me sick to think that the man at the bottom of it all is now seven points clear in the opinion poll and odds-on favourite to be our next prime minister. How is this possible? How difficult is it to join the dots?
If Farage does wind up in No 10, it won’t just be the UK car industry in long-term decline - and we'll deserve it.
