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Government urged to stop 'squabbling' over Brexit and save car industry as Jaguar Land Rover warns of closures

Theresa May's team criticised after JLR said bad trade deal would cost it £1.2bn a year

Ben Chapman
Thursday 05 July 2018 18:08 BST
Emma Reynolds called on the Chancellor to look after manufacturing and Jaguar Land Rover post brexit

The government must take action and stop “squabbling” about Brexit in order to save the UK’s car industry, union leaders and analysts have warned.

The criticism followed a warning from Jaguar Land Rover (JLR) boss Ralf Speth that a “bad” Brexit deal would cost the company £1.2bn a year and may force it to close down some of its UK factories.

Adding to the pain, the sector as a whole posted a 3.5 per cent drop in sales in June compared to the same month last year.

The double dose of bad news piled more pressure on Theresa May’s team to urgently provide clarity for one of the few parts of UK manufacturing that has thrived in recent years.

Responding to JLR’s warning, Stuart Richards, a senior organiser at GMB, said ministers were still spending more time squabbling with each other than listening to the industry’s concerns.

“Our members at Jaguar Land Rover do skilled jobs with decent pay and contribute millions to the real economy,” he said.

“We cannot afford to lose Jaguar Land Rover and its supply chain – it would be an economic car crash.

“The best thing that could come out of the prime minister’s get-together at Chequers is a clear commitment to the UK being part of a customs union with Europe.”

Ministers are set to meet this weekend to hear details of Ms May’s latest approach to trade with the EU after Brexit. The plan, dubbed a “third way”, is said to offer the best of both worlds by allowing the UK to leave the customs union while maintaining access to EU markets.

The “facilitated customs arrangement” and “free trade area for goods” will be unveiled in a white paper next week, but it remains to be seen whether the details will convince EU negotiators or business leaders.

On Thursday, ​JLR became the latest big firm to say it needs more certainty if it is to continue to invest heavily in the UK.

Britain’s largest car manufacturer, which employs 40,000 people in the UK and supports 260,000 more through its supply chain, said it plans to spend £80bn over the next five years, including £25bn of capital investment, but that may be in jeopardy if the government reaches a bad deal on trade.

The company’s chief executive, Ralf Speth, said JLR’s “heart and soul was in the UK”.

He added: “However, 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.

“We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees.

“For more than 250 years, since the era of Adam Smith, Britain has championed free markets and made the case for free trade.

“If the UK automotive industry is to remain globally competitive and protect 300,000 jobs in Jaguar Land Rover and our supply chain, we must retain tariff and customs-free access to trade and talent with no change to current EU regulations.”

Business secretary Greg Clark said the government is determined to ensure JLR, a “great British success story”, can continue to “prosper and to invest in Britain”.

Meanwhile, Ian Gilmartin, head of retail and wholesale at Barclays Corporate Banking, said the car industry was right to be more vocal about the lack of clarity around Brexit.

“Patience is running out for both manufacturers and retailers, with all parts of the industry hoping to see some material progress to allow them to plan for the future,” he said.

“As today’s data shows, it’s not just a trade issue, with wider questions over diesel policy posing another headache for operators as diesel purchases fell by almost a third in June.”

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