A leading UK car industry body has called on British politicians to ratify the post-Brexit trade agreement when the vote is taken this afternoon. The Society of Motor Manufacturers and Traders (SMMT) says the deal, which is being debated in Parliament today (December 30) is crucial for a sector that has been rocked by political uncertainty and the coronavirus crisis.
The deal finalised on Christmas Eve is being scrutinised by MPs today, before heading to the House of Lords for further scrutiny. The deal is expected to go through after Labour leader Sir Keir Starmer urged his party to back Prime Minister Boris Johnson's eleventh-hour deal.
However, the deal has drawn criticism from some quarters, with the Scottish National Party (SNP), Plaid Cymru and the Democratic Unionist Party (DUP) all expected to vote against the deal. And even Starmer has shown reluctance to back the deal, reportedly claiming it would lead to an "avalanche of checks, bureaucracy and red tape for British businesses".
The SMMT, though, says the deal will lay "foundations" for the beleaguered automotive industry to grow in the UK. The organisation backed the 'Remain' campaign during the 2016 referendum, and while it admits the deal will not match the benefits of remaining in the European Union, it says the draft Trade Cooperation Agreement (TCA) will allow much-needed tariff and quota-free trade.
But the organisation's chief executive, Mike Hawes, said the TCA should be backed up by action from the government, including the promises made as part of the ‘green industrial revolution’. In particular, Hawes said he wanted to see battery gigafactory capacity grown in the UK, along with maintenance of the free-flowing trade between the UK and Europe.
“For automotive, Brexit has always been about damage limitation, and the draft Trade Cooperation Agreement, while no substitute for the completely free and frictionless trade with Europe we formerly enjoyed, will address immediate concerns,” he said.
“The TCA provides the opportunity for tariff and quota-free trade, foundations on which the industry can build. Even with immediate ratification, however, there will be just hours to adjust to new trading rules, so a phase-in period is critical to help businesses adapt. All efforts should now be made to ensure its seamless implementation, with tariff-free trade fully accessible and effective for all from day one.
“Further ahead, we must pursue the wider trade opportunities that Brexit is supposed to deliver while accelerating the UK’s transition to electrified vehicle manufacturing. With the deal in place, government must double down on its commitment to a green industrial revolution, create an investment climate that delivers battery gigafactory capacity in the UK, supports supply chain transition and maintains free-flowing trade – all essential to the UK automotive sector’s future success.”