Will “Hard” Brexit leave UK businesses uncompetitive?
A report in the Financial Times confirmed that Jaguar Land Rover (“JLR”), the UK’s largest carmaker by units, has said that any new tariffs introduced after Britain leaves the EU will make its business uncompetitive and put jobs at risk. Access to the EU single market is essential to JLR’s business because without it affects how they sell and how they buy. Car industry trade bodies are concerned that the future of the UK’s automotive industry is bleak. Large percentages of cars put together in the UK reach Europe as their final destination. Without this relationship in place 300,000 JLR jobs in the UK that are dependent on European exports could be at risk. Furthermore, 40% of JLR’s purchasing budget is spent on the continent and if tariffs are imposed, it would penalise JLR for buying from the EU as well as selling into it. Much of the investment that has led to the current resurgence in the UK has been made based on access to the single market. Concurrently, Toyota, which exports almost 80 per cent of its UK-built cars to the EU, previously said it would face “huge cost reduction challenges” if tariffs of 10 per cent were imposed on sales to the EU.