26/06/2018 12:21 BST | Updated 26/06/2018 16:20 BST

‘Hard Brexit’ Will Put 860,000 Jobs At Risk, UK Car Manufacturers Warn Theresa May

First Airbus, now this.

Britain’s car manufacturers have warned Theresa May that 860,00 skilled jobs are at risk unless she “rethinks” Brexit and protects customs and trade links with the EU.

The stark message, which follows similar pleas from industrial giants Airbus and Siemens, came as the Prime Minister prepared for a crunch summit with her Cabinet next week. 

Warning that there is “no Brexit dividend”, the Society of Motor Manufacturers and Traders (SMMT) said uncertainty over the Government’s plans was “thwarting” car firms’ decisions to put more money into UK factories.

Investment had plunged by half this year, it added. In the first six months of 2017, investment in new models and factory improvements stood at £647.4m. This year, the figure was just £347.3m.

Michael Hawes, chief executive of the SMMT, told its conference on Tuesday that ministers had to heed repeated warnings that the UK car industry needed “as a minimum” to remain in an EU customs union and get a deal that delivers “single market benefits”.

“There is no Brexit dividend for our industry,” he said. “The current position, with conflicting messages and red lines goes directly against the interests of the UK automotive sector which has thrived on single market and customs union membership. 

“There is no credible ‘plan B’ for frictionless customs arrangements, nor is it realistic to expect that new trade deals can be agreed with the rest of the world that will replicate the immense value of trade with the EU. Government must rethink its position on the customs union.”

He also sent a clear signal that car firms including BMW, Honda and Nissan would have to move production elsewhere if the uncertainty around Brexit continued for much longer.

“With decisions on new vehicle models in the UK due soon, government must take steps to boost investor confidence and safeguard the thousands of jobs that depend on the sector,” it said ahead of a key conference for the automotive industry.

Car makers and their complex supply chains will all be at risk if there is any change to ‘frictionless’ trade, Hawes added.

In a bid to reassure companies, Theresa May told chief executives at a Times business summit on Wednesday: “A Conservative government will always listen to your voice and back you every step of the way”.

GEOFF CADDICK via Getty Images
BMW's Mini assembly line at its factory in Cowley, Oxford

BMW has already warned it could be forced to close its production sites in the UK, putting 8,000 jobs at risk, if components for Mini and Rolls-Royce cars are hit by customs delays after the UK quits the EU.

Eloise Todd, of the pro-EU group Best for Britain, said the warnings were further evidence that “a car crash Brexit’” would hit jobs.

“This government are seriously harming British industry, and therefore British jobs, with their complete failure to provide direction and clarity on the deal they are negotiating,” she said.

“Time is running out. Yesterday we found out that 8000 jobs at BMW could be lost in the likely event there are post-Brexit customs delays. Only last week we heard 14,000 people at Airbus could be out of a job. These are ordinary people who are waking up to hear that their families’ future has been compromised.” 

PA Wire/PA Images
Business Secretary Greg Clark

Business Secretary Greg Clark hit back on Monday at suggestions by Jeremy Hunt that firms were making ‘inappropriate’ comments on Brexit. Clark said firms should be ‘listened to with respect’.

When asked about the job loss warnings, the Prime Minister’s official spokesman told HuffPost UK it had already proved it was listening to business by securing a transition period until December 2020.

“There’s an absolutely consistency to the government’s message,” he said.

“Business, including the automative industry, set out as a priority that it wanted an implementation period and that is what we’ve secured.

“What everybody wants is to achieve a Brexit which is as frictionless as possible and as smooth as possible and we have made considerable steps towards providing for that.”

The spokesman later added: “Their voice is important- as are a number of other voices.”

May is hoping that Cabinet tensions over Brexit can be aired and resolved during a special ‘away day’ on the issue at Chequers next week, with key issues like customs partnerships and the Northern Ireland border set to be discussed.

A government spokesman insisted the UK was “confident” of securing a good deal with the EU because it would be  “mutually beneficial, and allows for the most free and frictionless trade with our European neighbours.

“The UK automotive industry remains one of our great success stories and a whole host of companies have recently committed to investing billions of pounds in the sector, including Nissan, Toyota, BMW and Vauxhall,” he added.

“Through our modern Industrial Strategy and landmark Automotive Sector Deal, we are working with the sector to put the UK at the forefront of new automotive technologies to ensure we remain the destination of choice for future investment.”