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UK Automotive Industry: Job Losses — [Mr Peter Bone in the Chair]

Part of the debate – in Westminster Hall at 10:24 am on 22nd May 2018.

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Photo of Madeleine Moon Madeleine Moon Chair, Defence Sub-Committee 10:24 am, 22nd May 2018

This is a very personal debate for me, because my Ford engine plant employs over 1,760 people and has 12,000 jobs associated with it. The plant covers the equivalent of 17 rugby pitches—we view size in that way in Wales. It produces one of five different engines every 30 seconds, and those go into seven different Ford models. Leaving the customs union means that the engines sent to European assembly plants will attract a 4.5% tariff, and it will inevitably lead to increased cost to consumers and loss of sales, leading to further loss of jobs.

Those of us who watch the automotive industry are concerned about the impact of Brexit and the confusion of Government policy on clean diesel. Changing diesel sales have not translated into petrol sales, and consumers are holding on to older products—cars and vans—for longer, slowing down air improvements. The Bridgend engine plant is a great example of the complex and integrated automotive supply chain across the EU.

There are a number of things we must be absolutely clear about. The Bridgend engine plant can be counted under originated content under the EU’s rules of origin. Components flow from the EU into Bridgend, and engines flow back. That must continue unimpeded. A frictionless customs regime is essential for us. Mass producers such as the car industry, as we have already heard, need the just-in-time delivery principle. A 15-minute delay to parts delivered just in time can cost over £850,000 a year. Storage of stock just increases customer costs, as the cost knock-on to the car manufacturer is passed on to the consumer. We need zero-tariff trade; that is a minimum requirement and should form the basis of any trade deal for the future.

We have already heard reference to minimum customs costs and delay in moving goods. Regulatory alignment—a prerequisite for minimising customs delays—is crucial in preventing cumulative cost and restricted customer choice as a result of trying to meet different standards. Ford would be especially impacted by a change of type approval if the VCA certification was no longer approved in the EU, and by CO2 targets if the UK was not included post 2020 in EU-wide calculations. Preferential trade with third countries, including Ford’s trade flow with Turkey, facilitated by the EU-Turkey customs union, and with South Africa through the EU-South Africa free trade agreement, is important to the European business.

I will end by saying that Bridgend has seen the loss of jobs in steel manufacturing. Bridgend has seen the loss of jobs in coal. We do not wish to see further devastation to the constituency from the loss of jobs in the automotive trade.