2. What assessment has been made of the impact of Brexit on the car manufacturing industry? OAQ54226

We are in regular dialogue with companies in the sector, the Welsh Automotive Forum and national sector bodies regarding the potential impact of a 'no deal' Brexit, which would be disastrous for the automotive and, indeed, other industries.

I'm grateful to the Counsel General for his response. He'll be aware that, according to the European Automobile Manufacturers Association, 80 per cent of the cars assembled in the UK are sold abroad. Around 58 per cent of those are exported to the EU. As the Counsel General said, if we don't get some sort of trade deal, the tariffs on car exports could be very serious—up to 10 per cent—which will really hit the competitiveness of Welsh manufacturers in this really important sector.

He will also be aware of the Cardiff Business School report for the Welsh Government in 2017, highlighting how firms linked to the automotive sector based in Llanelli, such as Calsonic and Schaeffler, could be exposed in this scenario. We now know, of course, that 200 jobs are at risk at Schaeffler's Llanelli plant. So, can the Counsel General tell us a bit more about what actions the Welsh Government is taking to mitigate the potential impact of Brexit on this key interest, particularly in the case of a 'no deal' scenario?

Well, I thank the Member for her further question. She's right to highlight the significance of the automotive sector to the Welsh economy. It employs about 11 per cent of the manufacturing workforce, which is around 18,500 people in Wales, and brings in revenue of around £3 billion. So, it's a very, very significant contributor to the Welsh economy. She's right to highlight the damage that trading on WTO terms would cause to the sector—and, indeed, operating outside a customs union. PwC recently estimated that deliveries to Germany from the UK, which can currently be achieved in around 12 hours, could take up to 72 hours. She will know, I know, that the impact that that has on the just-in-time supply chain arrangements of the automotive sector is going to be very, very significant.

The Minister for Economy and Transport issued a written statement earlier this year describing ongoing activity to support and promote the Welsh automotive sector in this difficult time. He's also met key players from the industry, including those, for example, earlier in the year affected by the Honda announcement, which was an announcement geographically in England but had knock-on effects for us here in Wales. There are 20 Honda suppliers in Wales, some of them very significantly exposed to that company.

She will also know of the support that the Welsh Government has given, both in terms of skills investment and in other terms, through the European transition fund, for example, to the automotive sector. We continue to lobby the UK Government to ensure that we do not leave the European Union on terms that would impose punishing tariffs and non-tariff barriers on the automotive industry and, indeed, other important sectors to our economy.

In keeping with all the parties in this Chamber, the Brexit Party is hugely disappointed with Ford's decision with regard to the plant at Bridgend. Our sympathy lies with the workforce, which has made tremendous efforts to comply with Ford working regimes over the years. But, let us be explicit here: Ford's decision has nothing whatsoever to do with Brexit. This has been categorically stated by the Ford management. As with all big business, and this includes all the motor manufacturers and all the subsidiary manufacturers, Ford will take the best option for the company. One has to remember that they removed production of their transport vans to Turkey—and just to remind everybody, Turkey is not even in the European Union. Though the EU partly funded the plant in Turkey—[Interruption.] The EU partly funded the plant in Turkey—[Interruption.]

If I can't hear the question, I'm sure the Minister can't hear the question either. 

What one has to remember is that any tariffs put on any of the exports, particularly of the car industry, after Brexit, will have a hugely detrimental effect on European car manufacturers. And we're not just talking about the German car industry; we're talking about the French car industry, which is increasingly dependent upon their exports to the UK. So, to say that Brexit is going to have this detrimental effect on the car industry is absolute nonsense. Will the Counsel General not agree with me on those points?

No, he will not. I think if we are going to properly evaluate the impact of Brexit on our economies, it's important that our reflections have some connection with the realities of what is going on. And I think he has conveniently forgotten the statement made by senior executives at Ford at the end of last year, which were very clear about the damaging impact of a 'no deal' Brexit on the automotive sector here in Wales. I will refer the Member to the remarks I made earlier, in relation to the damage that would be caused to this vital sector by the course of action that he is a passionate advocate for.