1. What assessment has the Cabinet Secretary made of the impact of Brexit on the automotive industry? OAQ52464

Can I thank the Member for her keen interest in this particular subject, and assure her that we're in regular dialogue with both the Welsh Automotive Forum and the national sector bodies on the potential impact of Brexit? Based upon these discussions, and based on daily interaction with Welsh automotive companies, my officials continue to assess the potential scenarios.

Thank you, Cabinet Secretary. I'm very proud that I've got hundreds of constituents employed in highly skilled, well-paid and unionised jobs in manufacturing in the automotive sector in Torfaen. I'm sure that, like me, you'll have seen numerous warnings from experts that Brexit, especially Brexit where we leave the customs union and single market, poses a very severe threat to automotive manufacturing in particular. Can I ask you—you mentioned assessments—to provide some detail on the assessments that you've made of a likely risk to the automotive sector, and what steps your Government is taking urgently to try and mitigate those risks, given what we know about just how competitive automotive manufacturing is and how dependent it is on just-in-time manufacturing principles? Thank you.

Can I thank Lynne Neagle again for making an important point about just-in-time delivering? This is something that the outgoing Confederation of British Industry director recently talked of in the context of Brexit. And the Member is absolutely right—there are hundreds of her constituents employed in the automotive sector in Torfaen, and there are 19,000 people across Wales employed in this crucial sector, and crucial because it contributes over £3.5 billion worth of revenue to the economy. Across the UK, there are more than 800,000 people employed in the automotive industry. Very recently, the likes of BMW and other major employers have been talking about their concerns over Brexit. Now, we've been working with Cardiff Business School, as well as with the Welsh automotive forum, and with sector bodies across the UK, to assess the likely impact of Brexit scenarios on the automotive industry. There are some factors that we could mitigate, but many are out of our control, and that's why it gives us very grave concern that the UK Government, and the Cabinet particularly, have not reached an agreed position on a customs union.

Cabinet Secretary, you'll remember our exchanges in this Chamber over the concerns of the 1,000 or so jobs that could be lost if new opportunities aren't found for the Ford factory in Bridgend, in my region. And in our cross-party meeting with the Ford staff, at that time, Brexit wasn't their main concern, although I suspect it may be more of a concern now; it was, rather, their relationship with the American market. And of course, with President Trump's announcement on tariffs, you can see why this is now an immediate worry. As Welsh Government has invested heavily in offices around the world now, I wonder whether you can explain what those offices have been able to do in the meantime in order to expand opportunities for Ford across the globe. Thank you.

Well, we're in active discussions with other employers concerning utilising the Ford site in Bridgend and in terms of growing the automotive sector in Wales. Of course, Brexit, and the uncertainties concerning Brexit, are an inhibiting factor in terms of being able to attract investment. However, through our new offices not just in north America, but across Europe, we are discussing with major automotive companies the potential to see investment come to Wales. There is also, of course, the other challenge that we've discussed at that group, which concerns the need to transition to a decarbonised economy, and in particular ensure that as many UK-based automotive manufacturers move towards hybrid and electric power trends, and ensure that they see the challenge of producing diesel-only engines in terms of the likely impact that the targets that the UK Government has set out will have on their employers. So, there are three main challenges that we need to overcome: one, the known and as yet unknown consequences of Brexit; two, the American market of course, and developing the supply chain within the UK to take advantage of any possible opportunities presented by Brexit; and then three, ensuring that manufacturers embrace the decarbonisation agenda and the move towards ultra-low emissions vehicles.

I'm sure the Cabinet Secretary will agree with me that no sensible person wants to see tariffs on imports and exports of cars between Britain and the EU. In the unhappy event that the European Commission continues to block proposals for a free trade deal, it would be the EU that would come off worst because they export £3.9 billion-worth of cars to us; we export only £1.3 billion to them, and half the cars that are exported to Britain from the EU are from Germany alone. Has he seen that Rupert Stadler, the chairman of Audi, has said that there will be no winners if a trade deal wasn't struck between the EU and the UK, and it would cost jobs in Germany as well as Britain, and that Lutz Meschke from Porsche cars says failure to strike a deal would put German jobs at risk? And, of course, as a result of the Trump tariff plans, there would be massive problems created for the European car manufacturers, and that's because the EU imposes a 10 per cent tariff on cars imported from the US, whereas the US imposes only a 2.5 per cent tariff at the moment. So, it's the EU's protectionism and their own negotiating intransigence that produces these potential problems. 

Look, nobody wins in the scenario that we have no agreed deal, based on the negotiations that have taken place. I think one area in which the Member is absolutely right in his assessment is in saying that this shouldn't just be a debate about who is going to be the worst loser and ensuring that the UK is not the worst loser. In order to ensure that we all benefit to the maximum, and that we all lose the least, we have to have a very pragmatic approach to negotiations, and that pragmatic approach means that the Prime Minister has to drop those red lines that she's embraced over many months and adopt a position that serves the purpose of sustaining employment. And that means continued participation in a customs union and free and unfettered access to the single market. We've been consistent now for some time in our position, and I would hope that, eventually, the UK Government and its Cabinet will adopt that position too.