The car industry is urging MPs to remove the prospect of a ‘no deal’ Brexit today (Wednesday, March 13) after the Government lost its latest vote.
The Withdrawal Agreement was defeated in the Commons yesterday evening by 149 votes.
The Society of Motor Manufacturers and Traders (SMMT) said that yesterday’s vote had left the country “perilously close to the cliff edge”.
SMMT chief executive Mike Hawes warned: “No-deal would be catastrophic for the automotive industry. It would end frictionless trade, add billions to the cost of manufacturing and cost jobs.
“UK automotive businesses will be put at immediate risk. Parliament must reject no-deal and take it permanently off the table.”
Fleets have been warned they could face price increases and longer lead times for vehicles and spare parts, if the UK leaves the EU without a deal.
Ahead of today’s vote, the Government has said that most imports into the UK would not attract a tariff in the event of a disorderly Brexit.
Under a temporary tariff scheme, 87% of imports to the UK would be eligible for tariff-free access.
Goods imported into the UK where tariffs would still apply, would include beef, lamb, pork, poultry and some dairy to support farmers and producers who have historically been protected through high EU tariffs.
It also said that it would be retaining a number of tariffs on finished vehicles in order to support the automotive sector and in light of broader challenging market conditions’.
However, carmakers relying on EU supply chains would not face additional tariffs on car parts imported from the EU to prevent disruption to supply chains.
Trade policy minister George Hollingbery said: “Our priority is securing a deal with the European Union as this will avoid disruption to our global trading relationships. However, we must prepare for all eventualities.
“If we leave without a deal, we will set the majority of our import tariffs to zero, whilst maintaining tariffs for the most sensitive industries.
“This balanced approach will help to support British jobs and avoid potential price spikes that would hit the poorest households the hardest.
“It represents a modest liberalisation of tariffs and we will be monitoring the economy closely, as well as consulting with businesses, to decide what our tariffs should be after this transitional period.”
Furthermore, the Government has confirmed that it will take a temporary approach to avoid new checks and controls on goods at the Northern Ireland land border if the UK leaves the EU without a deal.
The UK’s temporary import tariffs will therefore not apply to goods crossing from Ireland into Northern Ireland.
These tariffs would apply equally to all other trading partners, except for those where the UK has a free trade agreement in place and around 70 developing countries that will benefit from preferential access to the UK market.
Pauline Bastidon, head of global and European Policy at the Freight Transport Association (FTA), said: “The crucial information released by Government today on tariffs applying to imports into the UK on day one in the event of a no deal Brexit is, frankly, long overdue. This is critical information for importers, who have been kept in the dark for too long in spite of repeated requests for transparency.
“The list of origin countries that will benefit from preferential access is also revealing in itself. With only 13 working days left until the UK’s scheduled departure from the EU, it is deeply concerning to get confirmation at this late stage that only a minority of EU trade agreements will have been rolled over.
"This not only represents an additional cost for importers, but is bad news for exporters too as it will limit access to preferential trade deals too. MPs should bear that in mind when asked to consider a no deal exit later today."
Michel Barnier, the EU's chief negotiator, says that the current impasse can only be solved in the UK.