Interim EU deal needed to safeguard future of UK motor industry

Motors | Published:

Industry body believes an interim agreement should be agreed with the EU until a final agreement is negotiated and implemented

The UK automotive industry has today called for the government to ensure an interim agreement is made with the EU to maintain a single market until a new agreement is made.

Though accepting of the UK’s decision to leave the EU, the Society of Motor Manufacturers and Traders (SMMT) believes that a final agreement cannot be reached by March 2019, and that businesses could be facing a potential ‘cliff edge’ – forcing them to trade under the World Trade Organisation rules.

Mike Hawes, SMMT Chief Executive, said: “We accept that we are leaving the European Union and we share the desire for that departure to be a success. But our biggest fear is that, in two years’ time, we fall off a cliff edge – no deal, outside the single market and customs union and trading on inferior WTO terms. This would undermine our competitiveness and our ability to attract the investment that is critical to future growth.

“That’s why we have to be honest with ourselves. If the UK cannot secure – and implement – a bespoke and comprehensive new relationship with the EU in two years’ time, we need a back-up plan. Having looked at all the alternatives, we need government to seek an interim arrangement whereby we stay within the single market and customs union until that new relationship is implemented.”

Honda currently has its home of UK manufacturing in Swindon, where it produces the current-generation Civic. Ian Howells, senior vice president for Honda Motor Europe, today commented on the SMMT’s calls for government safeguarding, saying: “Honda remains committed over the long term to its sales and manufacturing activities in the UK and Europe.

“My request would be for the UK government to do all it can to seek a deal that will promote free and frictionless trade between the UK and the EU, while ensuring the continued competitiveness of the small and medium sized businesses that make up our supply chain.”

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