Lack of clarity on Brexit 'utterly unacceptable', says SMMT

A ‘no deal’ Brexit may have been avoided for now, but uncertainty over the UK’s future relationship with the EU is taking its toll on the car industry.

It has labelled the lack of clarity “unacceptable”, claiming investment from carmakers has been cut or put on hold, with fears that EU workers returning home could exacerbate a skills gap in the aftermarket.

EU leaders granted the UK a six-month extension to Brexit after talks in Brussels, earlier this month.

The new deadline – October 31 – avoided the prospect of the UK having to leave the EU without a deal on April 12, with MPs still unable to agree a way forward.

Mike Hawes, chief executive of UK trade body the Society of Motor Manufacturers and Traders (SMMT), says the continuing uncertainty, almost three years after the UK voted to leave the EU, is “utterly unacceptable”. 

“Industry still does not know what the UK’s relationship with the EU will be in the coming weeks and months,” he said.

“Uncertainty has already caused serious damage – car plants are on enforced shutdown, investment has been cut and jobs lost. This cannot go on.”

Hawes wants Government and Parliament to use the extension to take ‘no deal’ off the table for good, and guarantee a positive long-term resolution that delivers frictionless trade.

“If they fail, we face yet another devastating ‘no deal’ precipice on October 31,” he said.

The Freight Transport Association (FTA) is also concerned that the threat of a disorderly exit still remains. Pauline Bastidon, FTA’s head of global and European policy, said: “While the risk of no deal has receded for now, it is an outcome which cannot be excluded further down the line – indeed, it remains the legal default, in the absence of alternative arrangements.”

The Government has been holding talks with Labour in an effort to break the Brexit deadlock. A series of working groups in key areas, such as environmental standards, security and workers’ rights, have been set up to try to find common ground.

The Government has indicated in a Home Office White Paper that it will look to offer lower-skilled and unskilled migrants from “low-risk countries” the ability to seek work for up to a year in post-Brexit UK. This scheme would run until 2025.

Steve Nash, chief executive of the Institute of the Motor Industry (IMI), said there has been a noted increase in the number of technicians from Eastern Europe either returning home or moving to other markets as the pound has weakened.

“Those technicians went some way to helping fill that need for technicians in the UK,” he said.

A shortage of technicians will result in extended SMR times as repairers struggle to cope with the lack of resource.

Nash, formerly aftersales director at BMW Group UK, urged the industry to investigate the potential of the Apprenticeship Levy.

“The job is changing so dramatically with the onset of electric vehicles,” he said. “EVs, advanced driver assistance systems and automated technology is something to get young people excited about when convincing them to join the industry.”

Automotive Recruitment Consultants (ARC) currently has 200 or so vacancies, with some 30% for technicians.

ARC director Chris Highfield says “immigrants that came over to work in technical roles are leaving due to Brexit”, but he also blamed the industry for not training more people to fill roles.

He explained: “Overall, it means there are fewer candidates and there aren’t enough people being trained to fill the (skills) gap.”

Speaking at fleet representative body ACFO’s spring seminar, Malcolm Maycock, managing director of Licence Bureau, also warned of a potential driver shortage, particularly in the parcel delivery sector (fleetnews.co.uk, April 2).

A similar warning came from Oliver Waring, managing director of seminar supporter Reflex Vehicle Hire, who said that many people employed as drivers, valeters and yard staff were from the EU, with some already leaving.

ACFO chairman John Pryor also blamed the Brexit stalemate for the lack of progress on several domestic issues, particularly company car tax.

“It is becoming quite obvious that the Government is unable to set the agenda,” he said.

So far, MPs have rejected the withdrawal agreement the Prime Minister reached with European leaders last year, and they have voted against leaving the EU 0without a deal.

The EU has ruled out any renegotiation of the withdrawal agreement.