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Home/Britain's carmaking sector warns on Brexit no-deal

Britain's carmaking sector warns on Brexit no-deal 'catastrophe' for the industry

The UK car sector has warned on Tuesday that a no-deal Brexit would be a 'catastrophe' for the industry

Britain's carmaking sector warned on Tuesday that a no-deal Brexit would be a "catastrophe" for the industry, two weeks ahead of a key parliamentary vote on London's proposed deal with Brussels.

Industry body Society of Motor Manufacturers and Traders (SMMT) issued its latest gloomy Brexit warning at its annual dinner in London, having backed the failed Remain campaign in the landmark 2016 EU membership referendum.

SMMT chief executive, Mike Hawes said leaving without a deal would be catastrophic - plants will close; jobs will be lost.

Hawes said leaving is not what it wanted, but it recognises that the withdrawal agreement has been hard-fought and, crucially, delivers a transition period which steps it back from the cliff-edge.

He said it needs a deal now, and it needs an ambitious deal for the future that guarantees frictionless trade with its most important market - nothing else will do, and it urged all parties to remember what's at stake.

The industry organisation also published the results from a November survey of its 182 UK-based member organisations.

Almost three quarters of those companies believed that a chaotic "no deal" Brexit would damage their business and threaten their future viability.

The SMMT said the results highlight the critical need for a Brexit withdrawal deal and transition to prevent the industry falling off the cliff-edge on March 29 when the UK leaves its largest and closest trading partner, the EU.

More than half of respondents said their operations have already suffered due to Brexit trade uncertainty.

A third revealed that they have postponed or cancelled UK investment decisions because of Brexit, while 20 per cent had already lost business as a consequence.

The SMMT has long blamed ongoing Brexit uncertainty for plunging UK investment, warning about the harmful impact of new, post-Brexit customs controls.

UK companies' manufacturing processes are complicated by the need to import raw materials, which have become more expensive due to a sliding pound - caused in turn by Brexit jitters.

The country's car industry employs around 800,000 people and produced 1.59 million cars last year. Some 80 per cent of those were exported, mostly to Europe.