Brexit could cause ‘unintended destruction of thousands of jobs’, warns Mayor

Prime Minister Theresa May with West Midlands Mayor Andy Street

West Midlands Mayor Andy Street has called on his Conservative colleagues in the Cabinet to find a Brexit solution that can “sustain the manufacturing renaissance” in the region.

In what is his biggest interjection into the Brexit debate, one year after being elected as the region’s first metro mayor, Street has warned of the “unintended destruction of thousands of jobs in the automotive industry” if frictionless trade is not maintained.

Jaguar Land Rover (JLR) has already revealed it is to cut 1,000 contract jobs as it feels the pressure of rising costs and a drop in demand for diesel cars.

Manufacturers fear a hard Brexit, or no deal at all, would create major problems for their industry as they source parts and export their goods.

Aston Martin’s finance chief Mark Wilson told the Commons Business Select Committee last November that no deal would have a “semi-catastrophic effect” on the business, while Government forecasts that became public in February estimated a no-deal Brexit could reduce economic growth in the West Midlands by 13%.

Now Street, writing in The Times, has joined the chorus and urged the Government to “listen to what businesses in the West Midlands are telling us”.

He said: “As the Cabinet examines the different systems for administering customs after Brexit, they must ensure that whatever the final arrangements are, they sustain the manufacturing renaissance we have seen in the West Midlands.

“Manufacturers will look to see if the new system can keep those parts moving quickly and predictably. It’s not possible to run world-class lean manufacturing processes if you don’t know when a component will be delivered.”

Street highlighted the importance of the automotive industry to the region – with more than 50,000 people employed, including at industry giants Aston Martin, GKN, BMW and London Taxi Company – as well as its global research and development strengths.

“I suspect the Board of Tata Group will be watching the Cabinet’s decisions over the next few weeks carefully. They know Jaguar Land Rover must step up and compete with Tesla as electric cars become more popular,” he added.

“We have the talent here, but will the Government’s Brexit decisions convince the board that they should build their rival to Tesla’s Gigafactory right here in the West Midlands? We know other countries in Europe will try to step in if we falter. ”

Although Street avoided using the phrase “customs union”, CBI regional director Richard Butler was more explicit.

He said: “The EU is Britain’s largest, closest and most important trading partner so maintaining barrier free trade with the EU is crucial. This is best achieved via some form of customs union.

“This issue is mission critical for the automotive industry in the region where raw materials, finished components and ultimately finished vehicles criss-cross the channel multiple times. Without a customs union the automotive industry which provides so many jobs in the region will face severe challenges which far outweigh the potential benefits from future free trade deals in other global markets.”

Paul Faulkner, chief executive of Greater Birmingham Chambers of Commerce, supported Street putting the region’s automotive sector at the centre of the Brexit debates.

He said: “The Greater Birmingham Chambers of Commerce welcome the West Midlands Mayor’s appeal to Government around a frictionless future for trade in the post-Brexit world, and support for the automotive industry that is so important to our region.

“These views very much echo our own Business Brexit Priorities that we published last month in the manifesto section of our Brexit Toolkit, designed for businesses to access and use as they navigate through this complex topic.”

Click here to make your voice heard in our Manufacturing in the Midlands survey