The Confederation of British Industry (CBI) and the Trade Union Confederation (TUC) have challenged the UK government to accelerate the Brexit negotiations with the EU in order to prevent job losses and industrial stagnation in Britain.
Together with BusinessEurope and the European Trade Union Confederation (ETUC), the organisations represent approximately 45 million workers across the Eurozone, and 20 million employers. The leaders of each group met in London earlier this month to discuss Brexit and compare forecasts for the economic impact it will have.
The joint statement issued on Wednesday morning said: “We are calling on the UK government and the EU to inject pace and urgency in the negotiations, bringing about measurable progress, in particular a backstop arrangement to avoid a hard border in Ireland.
“Decisions will be needed in June and October to finalise the withdrawal agreement and the transitional arrangement, and put economic interests and people's jobs, rights and livelihoods first.”
Economic growth stats have been positive for the past few months, but construction and motor manufacturing are both down, while high street sales are falling, major high street retailers are closing down, and house prices are also starting to drop. The fear is that these are indicators of money failing to move around the economy; a stagnation which typically leads to growth halting and recession being triggered.
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Motor manufacturing suffering
The statement comes a day after the Society of Motor Manufacturers and Traders (SMMT) released their annual Sustainability Report. The latest data from the SMMT points to a sharp reduction for investment in UK factories from major car companies; down from £647.4 million in the first half of 2017 to £347.3 million in the first half of 2018.
Mike Hawes, SMMT Chief Executive, said at their annual summit: “Our message to [the] government is that until it can demonstrate exactly how a new model for customs and trade with the EU can replicate the benefits we currently enjoy, don’t change it.”
The investment reduction of 44.3% has already caused production output to drop and seen both Vauxhall and Jaguar Land Rover sack hundreds of employees. Investment is usually cycled every 4-5 years, so the expected impact will reveal itself in 2019 to see the true damage.
Nissan have already committed to their plant in Sunderland for their next two car models, while Toyota, BMW, and Vauxhall have all stated their intent to stay in the UK, but it remains to be seen whether circumstance will force their hand and either job cuts or a move away from Britain.
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Trump’s tariffs
British jobs are under threat from more than just Brexit however. President Trump’s current raft of international trade tariffs look set to hit European cars at a rate of around 20%.
The move is described as a retaliation against “unfair” EU restrictions on US goods, but it was the United States that imposed the first tariffs globally, hitting EU sales of steel and aluminium and oversaturating the market in the Eurozone to the point that companies were forced to make losses.
Based on the Tariffs and Trade Barriers long placed on the U.S. & its great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!
— Donald J. Trump (@realDonaldTrump) 23 June 2018
The UK Prime Minister, Theresa May, is attending a European Council meeting today and tomorrow (June 28 – 29) to brief European leaders on the progress of Brexit, but she will be excluded from the following meeting hosted by the EU’s Chief Negotiator Michel Barnier, who will provide his own updates on the progress made between the UK and the EU.
