UK exclusion from ‘Made in Europe’ rules would drive up costs for consumers, warns SMMT

A decision to exclude UK-built vehicles, components and materials from the EU’s ‘Made in Europe’ proposals would inflict higher costs and less choice on European consumers, according to the Society of Motor Manufacturers and Traders (SMMT).

It reiterated its calls for the UK to be treated as equivalent to the European Union under the proposed Industrial Accelerator Act (IAA).

As drafted, future UK-built vehicles would be denied access to incentives available to EU-built products, including support for greener corporate fleets and CO2 super credits, and be excluded from EU Member State procurement.

“The EU and UK automotive sectors have traded, invested and grown together over many years. Despite Brexit, supply chains remain deeply integrated and the cross-Channel trading relationship is worth €80 billion a year, supporting jobs, growth and investment,” said SMMT chief executive, Mike Hawes.

“The EU is rightly focused on strengthening its industrial base, but the UK remains fundamental to Europe’s automotive ecosystem and is therefore essential to that ambition. Excluding the UK from ‘Made in Europe’ would be an own goal, weakening competitiveness, reducing scale and limiting consumer choice,” he added.

According to analysis carried out by Oxford Economics, UK automotive production is estimated to support €24 billion of economic activity across the EU, spanning every sector from utilities to financial services and real estate.

The UK auto sector is also said to sustain 250,000 EU jobs through supply chain activity and wage-funded consumer spending, while UK automotive exports to the EU alone generate €5.6 billion of spending across the bloc, supporting 58,000 jobs and €1.6 billiob in tax revenues.

The SMMT said these benefits would be put at risk if the IAA excludes the UK from key ‘Made in Europe’ provisions.