Car Scaremongering: Why Labour's Obsession?

Barely a month goes by without me hearing Labour politicians utter the same old discredited chestnut about how 'if we leave the EU, we might end up with tariffs being imposed on car exports'. I think it's time we shot that one down in flames.

In the famous poem 'The Village Schoolmaster', Goldsmith brilliantly describes a village schoolmaster, exposing him as a horrible man through faint and sarcastic praise and backhanded compliments. He trumpeted the village schoolmaster's skill in debate: "For e'en though vanquish'd he could argue still; While words of learned length and thund'ring sound, Amazed the gazing rustics rang'd around". Dazzling the villagers with his extensive vocabulary, it created the impression that he was in control when in fact totally defeated in debate.

Barely a month goes by without me hearing Labour politicians utter the same old discredited chestnut about how 'if we leave the EU, we might end up with tariffs being imposed on car exports'. I think it's time we shot that one down in flames.

Let's start with a little bit of context. Our membership fees to the European Union are somewhere between £55 and £60 million every single day. There are about 65 million people in the UK, so it's a fair bet that there are 55-60 million people over the age of 9. To put it another way, for every person above that age we spend £1 per day in EU membership contributions. Imagine that we did EU contributions like the old-fashioned electric meters. To cover our membership of the European Union, everyone - healthy or unhealthy, waged or unwaged, homeowner or homeless - would have to put £1 into the EU meter every day. Once a day, from the age of 9 onwards, for the rest of your life, you would have to put a pound coin in the meter. I wonder how long the tax would last before people became desperate to leave the EU.

If you're pro-EU, you're forced into resorting to desperate measures. The main tactics are giving the EU credit for other people's work (like NATO keeping the peace in Europe, or 'giving us' human rights that we already had), deflection (like admitting the EU 'needs reform' without any plan to achieve it), exaggeration (like telling us about everything EU money is spent on, exaggerating the value, ignoring the problems, and forgetting it comes from our taxes), and fear tactics.

The car claim is a classic scaremongering scam.

It fails the believability test; does anyone seriously believe that the big German car manufacturers would be happy to permit tariffs on cars they export to the UK? Why would the EU want to impose tariffs anyway - what strategic goal would it achieve for them? But if the EU somehow wanted to impose tariffs, imagine the fierce lobbying they'd face from the French, German and Italians desperate to keep selling their cars to us at current prices.

It also fails because there are at least three different models for the UK post-Brexit. One is to remain in the EEA, another is to rejoin EFTA, and the other is a bespoke negotiated deal. None of these would involve tariffs on cars, pretty much by definition. Such deals are pretty much guaranteed to be on the table; the EEA option is pretty much enshrined in EU law anyway.

And why on earth would they want to deny us a deal? Roughly 4 million jobs in the rest of the EU depend on continued trade with the UK. Why would they even consider putting 4 million jobs in jeopardy? They wouldn't (which simultaneously skewers the Labour '3 million UK jobs depend on the EU' lie - another classic pro-EU scaremongering tactic), so why would they want to impose tariffs?

Let's suppose that by some miracle flight of fancy, we could construct a plausible situation in which the EU managed to impose tariffs anyway. It wouldn't happen, but let's play along with the notion anyway.

The EU would still be bound by international agreements and World Trade Organisation rules. That means no punitive tariffs; I would imagine in this fantasy scenario a tariff of just under 2%, enough to add £120 or so to the cost of an entry-level new car and perhaps £400 to more luxury models. Compare that with the imaginary £1 per day meter that everyone in your family is paying towards; for a family of four the tariff on a new basic car would be the same as just one month's saving from being out of the EU.

But a tax on exports means a tax on imports, and vice versa. One tax comes into the UK exchequer; the other leaves the country. As the number of cars imported and exported to and from the UK is broadly similar, the extra taxation revenue for the government would allow lower taxes elsewhere to offset the loss.

Tariffs aren't going to happen though. The big car companies know it too. So whilst Labour has cried wolf to all who will listen about how the car manufacturers will move out of the UK if we leave the EU, jobs - real ones, not hypothetical spin - were actually lost when Ford used EU money to relocate from Southampton to Turkey.

Oops! You'd imagine that Labour would want to keep quiet on the subject of cars, then. Not least because Labour's infamous and frankly patronising 'pink bus' came from that plant, in a huge slap in the face to workers in Southampton.

But they don't keep quiet; they continue to sabre-rattle. They threaten that the big car manufacturers will leave the UK if Brexit happens. Scaremongering may not be Labour's strong suit, but it's certainly their long suit. Toyota were the latest company to announce they're not playing ball with that strategy recently, but here in the North East it was Nissan that left them with most egg on face. Whilst Labour were still threatening a Nissan exit, Nissan expanded their Sunderland plant and made a long-term commitment to the UK. Asked five times on the Today programme, five times their European chairman gave categorical assurances that Nissan will remain in the UK in the event of Brexit.

Labour's arguments on cars lie in tatters. But they still keep using them (well, excepting that brave, small but growing band of fearless Labour MPs who dare admit that the project has been a disaster for the working people they represent).

An idea utterly defeated, yet still ploughing on with the argument regardless? Methinks that epitomises the Labour Party at least as well as it could any village schoolmaster.


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