The 2017 General Election was called with the intention of securing a large commons majority for the governing Conservative Party such that their leader, Theresa May, would be able to deliver the Brexit vision she wanted. Some claim that such a manadate would have allowed May to deliver a softer Brexit by standing up to her Eurosceptic “bastards”; others thought it would give her carte blanche for the hardest of Brexits – perhaps only Theresa May and her inner circle knew. In the event, she returned to power shorn of her majority and with her authority and personal standing badly damaged.
The weakness of the PM’s position domestically has emboldened Europhiles in her party and outside it leading to calls for a more consensus-led style of government and a soft Brexit approach which prioritises jobs and the economy over other issues.
The British car manufacturing industry is highly integrated into a pan-European entity which sees car components crossing many borders multiple times before the finished product is ready for export or the domestic market. Such arrangements could not remain sustainable if the UK leaves the Single Market and the Customs Union.
The Society of Motor Manufacturers and Traders (SMMT) has added its voice to those calling for demanding a transitional arrangement for the years following Brexit, arguing that a final trade agreement between the EU and UK was implausible before the 29/3/19 deadline. Without such an agreement, they fear a “cliff edge” situation where tariff-free trade would suddenly end. More than half of all vehicles assembled in the UK are exported to the EU.
The SMMT chief executive, Mike Hawes, noted: "We accept that we are leaving the European Union. But our biggest fear is that, in two years' time, we fall off a cliff edge - no deal, outside the single market and customs union and trading on inferior World Trade Organization terms. This would undermine our competitiveness and our ability to attract the investment that is critical to future growth."
The sector had a turnover of £77.5 billion in 2016, and represented 12% of all UK exports. SMMT claims that nearly 1 million jobs are directly linked to the UK motor manufacturing sector and allied activities. Theresa May has already given Nissan's UK boss an undisclosed assurance that access to the single market would continue post Brexit. It is not clear how this could be achieved with the government’s current Brexit stance.