The Automotive Sector

Part of 2. Questions to the Counsel General and Brexit Minister (in respect of his Brexit Minister responsibilities) – in the Senedd at 3:02 pm on 22 January 2020.

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Photo of Jeremy Miles Jeremy Miles Labour 3:02, 22 January 2020

I thank Helen Mary Jones for that further question. I think one of the points that is evident from her question is the level of integration in the car manufacturing sector through different parts of the UK. Impacts in one part of the UK can very significantly impact companies in the supply chain that may be in other component nations of the UK. I think this just goes to the heart of the need to ensure that the kind of relationship that Wales and the UK has with the European Union following Brexit is one that—.

And I welcome the indication in the political declaration that the Prime Minister is seeking a tariff-free relationship; obviously, that is to be welcomed. The tariffs, the World Trade Organization tariffs, on cars, as she will know, run at about 10 per cent, and would seriously damage the sector in Wales and across the UK. But it's also important in those negotiations to ensure that non-tariff barriers are also kept to an absolutely bare minimum. That assurance actually isn't given in quite the same way in the political declaration, though I hope that that will be the direction the UK Government seeks to take the relationship.

PwC estimated recently that deliveries to Germany from the UK, which can currently be achieved in 12 hours, could take up to 72 hours when the UK is outside the customs union. Obviously, in a sector where just-in-time delivery of components and so on is so fundamental to productivity, that sort of additional delay could be very seriously disadvantageous. It's those sorts of considerations—which aren't perhaps unique to Wales, but we have companies in the supply chain that cross the UK—that we would wish to advocate if, as we should, we have a role in those negotiations.