It is becoming clear that car exports from the UK to the EU are becoming something of a flagship for the Remain campaign.
David Cameron talks of the “success story” of Britain’s car industry. During Foreign office questions on 12th April, an exchange took place between Pat Glass MP and David Lidington, Minister for Europe, suggesting that Brexit would see tariffs of 10% placed in British car exports to the EU.
It always arouses suspicion when some figures are partially quoted, such as a cash value for exports, without providing a cash figure for imports. Let us have a look at some facts. In this case, SMMT figures from 2015 are used.
Of the 1.7 million cars that were built in the UK, 57% were exported to the EU. In return we imported 85% of the 2.6 million cars bought in the UK. These include from Ford and General Motors (Vauxhall). Ford has ceased both car and van assembly in the UK by diverting production to Europe.
GM now only produces one car brand in the UK, the Astra in Liverpool, having diverted assembly to Europe from their Luton plant for other models. British jobs have been lost to Europe whilst we have been members of the EU.
There are of course no British owned car manufacturers in the top 30 of brands sold in the UK. Mini is now owned by BMW who invested their increased production capacity of Minis into the Netherlands and Austria.
Whilst the Rolls Royce Chief Executive has said that his business is better off if we remain, he is in fact a German born executive of BMW who sell 150,000 cars in the UK annually. Rolls Royce’s biggest markets are in the Americas, Asia and the Arab world.
Quite simply, if EU members were to put up barriers to trade with Britain, reciprocal tariffs imposed by Britain their own car production would be severely hit including in Germany, France, Spain, Netherlands, Austria, Romania and others.
Other makers might be encouraged to invest in producing a net shortfall of over 1 million cars in the UK. By making cars the last item on the agenda, respectable negotiators should be able to produce a free trade deal quickly.
The Office for National Statistics (ONS) summarises graphically the patterns for imports and exports for the UK from 1988 to 2014:
Car exports to the EU have certainly grown, from £8.0bn to £11.9bn. The side of the story that has been hidden by “Remain” politicians is that imports have from the EU have grown from £14.3bn to £31.3bn. Our deficit with the EU has grown by a net £13.1bn.
There are other markets, with Commonwealth countries apparently welcoming the chance to restore historic links that were shelved in 1973. The Commonwealth covers 1/3rd of the world’s population and 1/6th of economic activity. Further markets exist around the world.
Let’s just have a look at patterns of car trade with the rest of the world, using the same source, the ONS.
From 1988 to 2014, car imports from the rest of the world grew from £2.2bn to £4.0bn. Exports grew from £2.9bn to £17.9bn. The surplus with the rest of the world has grown by £13.2bn.
When looking at the totality of the facts, not excluding the rest of the world and not excluding imports, some questions arise:
Are British politicians and civil servants really not capable of negotiating a free trade deal with the EU when our balance of trade injects so much into EU economies?
Should we be looking further afield for markets in which we can grow at a faster rate than we do with the EU?
Are jobs really more secure if we remain, given that Ford, GM and Mini (BMW) have been shifting production away from these shores whist we have been members of the EU?
On 23rd June, we, the public, will have to choose between the arguments on offer. Hopefully this piece uncovers some of the hidden facts on one of the showpiece industries.
There are of course other industries. Here in York, Terry’s chocolate production has ceased, the jobs exported to Sweden, Belgium, Slovakia and Poland. The supply infrastructure is in those countries. York’s rail carriage works is now closed, having lost business to a German/Spanish joint venture.
It is for the individual to decide, preferably with full rather than partial facts. Just hearing about exports to the EU provide 25% of the story.