Future Relationship Between the UK and the EU

Part of Domestic Gas and Electricity (Tariff Cap) Bill – in the House of Commons at 6:08 pm on 18th July 2018.

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Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield 6:08 pm, 18th July 2018

I am grateful for the opportunity to say a few words in this debate, Mr Speaker. I wish to start by declaring an interest: I chair the all-party parliamentary motor group, which receives secretarial support from the Society of Motor Manufacturers and Traders, the Motorsports Industry Association and the RAC Foundation.

I want to say a few words about why the stakes are so high for that industry and sector in terms of getting our approach to Brexit right. That is not a narrow parliamentary debating point. It is not about which faction is on the up or on the way down in the Conservative party—or indeed in any other organisation. We are talking about the future of that sector in this country. It is a sector that brings in £77.5 billion every year in revenue and which makes up almost 10% of manufacturing output. It is an industry on which literally hundreds of thousands of jobs up and down the country depend. This is about the livelihoods of people in the west midlands and in other parts of the UK. It is about reality. I want to focus my remarks on why, despite the vote earlier this week, I really think that continued customs union membership has to be a negotiating objective of our future relationship with Europe and why the so-called facilitated customs arrangement—whether it be max fac, quite fac, relatively fac or not very fac at all—just really will not cut it.

Every day, trucks deliver £35 million-worth of parts to the UK. Most of those are then shipped back to the European Union. The whole industry relies on a delicate system of just-in-time delivery, with the ability to move parts and goods within the European Union quickly and efficiently and with costs kept to a minimum. Any barrier to that frictionless movement will result in delays at the border, additional customs bureaucracy and extra costs to business.

Just think about Operation Stack and about how quickly the roads to the channel ports got gridlocked when industrial action in France caused delays three years ago. It cost the freight industry £750,000 every single day. Just think about how quickly customs checks at our ports would cause the same kind of snarl-ups and about the millions that it would cost the automotive sector. I say to Members: do not just take that from me; listen to what the industry itself is saying. The Society of Motor Manufacturers and Traders issued this warning:

“Any customs model that fails to replicate the benefits of UK automotive’s current trading relationship with the EU is likely to create delays, disrupt highly efficient “just-in-time”
manufacturing and undermine competitiveness.”

As its chief executive Mike Hawes said in May:

“Continuation of customs union membership is a minimum for the car industry. ”

Just listen to the warning from Jaguar Land Rover, which said:

“a hard Brexit would cost £1.2 billion a year in trade tariffs and make it unprofitable to remain in the UK”.

Earlier this year, the Business, Energy and Industrial Strategy Committee warned:

“There are no advantages to be gained from Brexit for the automotive industry for the foreseeable future”.

Its warning must be taken seriously. It said that the most that we can hope for is

“an exercise in damage limitation”

Unfortunately, on current form, the Government are even falling short of that objective.