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UK car sales fall, as Jaguar Land Rover issues hard Brexit warning - business live UK car sales fall, as Jaguar Land Rover issues hard Brexit warning - business live
(35 minutes later)
Labour MP Jack Dromey fears that jobs could be lost at Jaguar Land Rover’s Castle Bromwich plant, in his Birmingham Erdington constituency.
Dromey says there is “profound and growing concern” about the impact of Brexit on Erdington, and the wider UK economy.
He points out that manufacturers rely on seamless movement of parts to and from Europe, which would be threatened by non-tariff barriers in a hard Brexit.
The nature of the automotive industry and ‘just in time’ arrangements mean that without frictionless trade with our closest trading partners, businesses cannot function and trade properly. Thousands of lorries go backwards and forwards every week to and from the continent.
Dromey adds that JLR adds billions of value to the UK economy each year, and is a vital employer.
We cannot allow the will of the hard-right Brexiteers to drive the UK down a deeply damaging road which would be disastrous for British business and British workers.
“In one of the poorest constituencies in the country, the Jaguar plant has transformed the lives of thousands of workers. It would be tragic to see those opportunities snatched away from the thousands still out of work.”
Stephen Phipson, chief executive of EEF, the manufacturers’ organisation, is urging ministers to heed JLR’s concerns about a hard Brexit.
Phipson points out that jobs are also at risk at the many small companies who supply parts to the company.
“This clearly underlines the reality being faced by the manufacturing sector. This is not just an issue for big companies, however, but those SMEs who are also heavily exposed in the major supply chains and, as yet, are unable to know what scenario they are planning for.
Time is now running out to secure the frictionless and tariff free relationship we need with the EU if there are not to be serious consequences right across UK industry.”
Labour MP Maria Eagle fears that Jaguar Land Rover’s Halewood car plant, in her Garston and Halewood constituency, is at risk from a hard Brexit.Labour MP Maria Eagle fears that Jaguar Land Rover’s Halewood car plant, in her Garston and Halewood constituency, is at risk from a hard Brexit.
Eagle says:Eagle says:
“Such a move would mean the end of JLR’s Halewood plant, the end of car manufacturing in South Liverpool and the needless destruction of thousands of the best private sector jobs in Liverpool.”“Such a move would mean the end of JLR’s Halewood plant, the end of car manufacturing in South Liverpool and the needless destruction of thousands of the best private sector jobs in Liverpool.”
“I am shocked but not surprised at this stark yet realistic warning from JLR chief executive Prof Ralph Speth about the appalling effects of the extreme Tory hard Brexit supported by half the Cabinet & a hardline cabal of Brexit extremists”“I am shocked but not surprised at this stark yet realistic warning from JLR chief executive Prof Ralph Speth about the appalling effects of the extreme Tory hard Brexit supported by half the Cabinet & a hardline cabal of Brexit extremists”
Nissan, which employs around 7,000 people at its Sunderland car plant, says:Nissan, which employs around 7,000 people at its Sunderland car plant, says:
“Nissan continues to work with the UK government to ensure the company’s long-term success and investment in the UK”“Nissan continues to work with the UK government to ensure the company’s long-term success and investment in the UK”
Getting back to Jaguar Land Rover.... and Owen Paterson’s claim that Brexit is a super opportunity for carmakers is getting short shrift:Getting back to Jaguar Land Rover.... and Owen Paterson’s claim that Brexit is a super opportunity for carmakers is getting short shrift:
Just asked a spokesperson for one trade body if they'd be responding to Owen Paterson's comments on the opportunities for UK auto firms (such as Jaguar Land Rover) after Brexit. "We're not going to dignify those comments with a response because they're not worth anything."Just asked a spokesperson for one trade body if they'd be responding to Owen Paterson's comments on the opportunities for UK auto firms (such as Jaguar Land Rover) after Brexit. "We're not going to dignify those comments with a response because they're not worth anything."
The sooner we accept that Owen Paterson & Jacob Rees Mogg know much more about running Jaguar Land Rover than the bloke who runs Jaguar Land Rover, the better for all concerned. https://t.co/kdrkOxzd8hThe sooner we accept that Owen Paterson & Jacob Rees Mogg know much more about running Jaguar Land Rover than the bloke who runs Jaguar Land Rover, the better for all concerned. https://t.co/kdrkOxzd8h
@graemewearden If Owen Paterson thinks JLR are wrong to worry about a hard Brexit, maybe JLR should appoint him as their CEO. He clearly knows the global motor business better than their current CEO and team.@graemewearden If Owen Paterson thinks JLR are wrong to worry about a hard Brexit, maybe JLR should appoint him as their CEO. He clearly knows the global motor business better than their current CEO and team.
It’s official: An England World Cup win would be good for the economy, according to the Bank of England governor.It’s official: An England World Cup win would be good for the economy, according to the Bank of England governor.
Carney asked about the economic impact if England WIN the World Cup (he does have an FA Three Lions pin on his lapel). “It will be an unalloyed, unadulterated good. I’m going to get my waistcoat this afternoon” #ENG 🏴󠁧󠁢󠁥󠁮󠁧󠁿Carney asked about the economic impact if England WIN the World Cup (he does have an FA Three Lions pin on his lapel). “It will be an unalloyed, unadulterated good. I’m going to get my waistcoat this afternoon” #ENG 🏴󠁧󠁢󠁥󠁮󠁧󠁿
Thanks to dapper manager Gareth Southgate’s success, retailers are already enjoying a ‘waistcoat bounce’.Thanks to dapper manager Gareth Southgate’s success, retailers are already enjoying a ‘waistcoat bounce’.
This chart from Mark Carney’s speech shows just how damaging the Bank believes a trade war could be:This chart from Mark Carney’s speech shows just how damaging the Bank believes a trade war could be:
Mark Carney appears to be getting into the World Cup spirit:Mark Carney appears to be getting into the World Cup spirit:
Mark Carney appears to be sporting an England football badge. pic.twitter.com/haiwXTtPj1Mark Carney appears to be sporting an England football badge. pic.twitter.com/haiwXTtPj1
Mark Carney has also used his speech in Newcastle to warn on America’s trade tariffs. Richard Partington reports:Mark Carney has also used his speech in Newcastle to warn on America’s trade tariffs. Richard Partington reports:
Donald Trump has received yet another warning over the threat to the global economy from his mounting trade disputes around the world - this time from the governor of the Bank of England.Donald Trump has received yet another warning over the threat to the global economy from his mounting trade disputes around the world - this time from the governor of the Bank of England.
Speaking in Newcastle, Mark Carney said the president’s growing use of trade tariffs were already having an effect on the world economy by causing a slowdown in exports and for manufacturing.Speaking in Newcastle, Mark Carney said the president’s growing use of trade tariffs were already having an effect on the world economy by causing a slowdown in exports and for manufacturing.
But he warned the situation could get much worse. Should the US raise import tariffs by a further 10% on all of its trading partners, that could knock as much as 2.5% off American growth and 1% off global output.It’s a conservative estimate, because this would be through the direct impact on trade channels alone. Things could get worse still should companies put investments on hold amid the political turmoil. It could also lead to higher borrowing costs, he says.But he warned the situation could get much worse. Should the US raise import tariffs by a further 10% on all of its trading partners, that could knock as much as 2.5% off American growth and 1% off global output.It’s a conservative estimate, because this would be through the direct impact on trade channels alone. Things could get worse still should companies put investments on hold amid the political turmoil. It could also lead to higher borrowing costs, he says.
Mark Carney, governor of the Bank of England, is speaking in Newcastle, where he says he is more confident now that the slowdown in the UK economy in the first quarter - when growth was just 0.2% - was temporary because of the disruption caused by bad weather.Mark Carney, governor of the Bank of England, is speaking in Newcastle, where he says he is more confident now that the slowdown in the UK economy in the first quarter - when growth was just 0.2% - was temporary because of the disruption caused by bad weather.
Investors reaction immediately, reading the comments as the latest signal from the Bank that interest rates will rise in August.Investors reaction immediately, reading the comments as the latest signal from the Bank that interest rates will rise in August.
The pound is currently up 0.1% at $1.3247, having hit an intraday day high of $1.3262.The pound is currently up 0.1% at $1.3247, having hit an intraday day high of $1.3262.
Speaking at the Northern Powerhouse Business Summit, he said:Speaking at the Northern Powerhouse Business Summit, he said:
Domestically, the incoming data have given me greater confidence that the softness of UK activity in the first quarter was largely due to the weather, not the economic climate.Domestically, the incoming data have given me greater confidence that the softness of UK activity in the first quarter was largely due to the weather, not the economic climate.
Rebecca Long Bailey, Labour’s shadow business secretary, said Jaguar Land Rover’s Brexit warning should be ringing alarm bells for Theresa May.Rebecca Long Bailey, Labour’s shadow business secretary, said Jaguar Land Rover’s Brexit warning should be ringing alarm bells for Theresa May.
This stark warning from one of the jewels in the crown of British automotive manufacturing should be a klaxon call to Theresa May and her cabinet. They cannot continue to spar with each other and play ideological games whilst British jobs and industries are being pushed off the edge of a cliff.This stark warning from one of the jewels in the crown of British automotive manufacturing should be a klaxon call to Theresa May and her cabinet. They cannot continue to spar with each other and play ideological games whilst British jobs and industries are being pushed off the edge of a cliff.
Uncertainty is already hurting investment and if the Government cannot provide urgent assurances to business on negotiating a deal that secures frictionless trade with the EU, our biggest export market, 40,000 jobs at Jaguar Land Rover and countless supply chain businesses could be lost in the blink of an eye, devastating our world leading automotive sector along with the communities that support them.Uncertainty is already hurting investment and if the Government cannot provide urgent assurances to business on negotiating a deal that secures frictionless trade with the EU, our biggest export market, 40,000 jobs at Jaguar Land Rover and countless supply chain businesses could be lost in the blink of an eye, devastating our world leading automotive sector along with the communities that support them.
Sean Kemple, director of sales at Close Brothers Motor Finance, says consumer nervousness contributed to the drop in UK car sales last month.
June saw the SMMT release a harsh warning about the impact of Brexit on both production output and demand to the UK motor industry, and we’ve certainly seen some hesitance from consumers when it comes to big ticket purchases.
This is exacerbated by the uncertainty around diesel, which is having a fierce impact on diesel sale figures.
Here’s Ian Gilmartin, Head of Retail & Wholesale at Barclays Corporate Banking, on the drop in car sales last month:
“A dip in overall new car sales is no surprise considering the plethora of challenges being faced by sellers. The industry has rightly been more vocal in recent weeks, with the lack of clarity around what the playing field will look like for the motor market post-Brexit growing. As we saw with Jaguar Land Rover’s warning this morning, patience is running out for both manufacturers and retailers, with all parts of the industry hoping to see some material progress to allow them to plan for the future.
As today’s data shows it’s not just a trade issue, with wider questions over diesel policy posing another headache for operators as diesel purchases fell by almost a third in June.
The sector has to focus on delivering more environmentally efficient vehicles, but diesel cars have a part to play in this and consumers need reassurance that a diesel purchase is still a sensible move.”
Conservative MP Owen Paterson thinks Jaguar Land Rover are wrong to worry about a hard Brexit.
Paterson, a Brexit supporter, told Radio 4’s Today programme that JLR would be in a “wonderful position” once Britain has left the single market and the customs union.
Paterson argues that it’s wrong to assume that tariffs would be imposed on goods travelling into the UK from Europe.
He points out:
“If we go to WTO terms, we set our tariffs and we can choose to have no tariffs.”
He added out that JLR was enjoying strong sales in China - why shouldn’t that continue after Brexit?
I think there’s a few problems with this view, though.
Wirral West Labour MP Alison McGovern says the government must heed JLR’s warning that a hard Brexit could wipe out its UK profits.
She says:
“Ahead of Friday’s behind-closed-doors Brexit summit at Chequers, the news that Jaguar Land Rover says a hard Brexit outside the Single Market and the Customs Union would make it impossible for them to remain profitable in the UK should send shockwaves through the political establishment.
.@Alison_McGovern – Jaguar Land Rover announcement “should send shockwaves through the political establishment” https://t.co/dvG88tM0Yz pic.twitter.com/9lwadfTdp4
Newsflash: UK car sales fell by 3.5% in June, as drivers continue to shun diesel motors.
Some 234,945 new cars were registered across Britain last month, the Society for Motor Manufacturers and Traders reports.
That’s down from 243,454 a year ago, and ends a two-month run of rising sales.
In total, UK car sales in 2018 are down 6.3% so far this year, following declines in the first quarter of 2018.
Sales of diesel cars slumped by 28%, as the emissions-testing scandal continues to hit demand. Petrol sales rose 12%, while electric vehicles sales jumped 45% (but at 15,549, that’s only 6.6% of the market).
The SMMT blames the slump in diesel sales on “continuing consumer uncertainty over future policy towards this technology”. Some cities are already moving towards ‘clean air’ zones in which more polluting vehicles are banned.
The West Midlands and Liverpool could be badly hit if Jaguar Land Rover cuts investment in the UK or moves production overseas because of Brexit.
The company runs several manufacturing plants in Britain - which have benefitted from billions of pounds in investment since bought JLR a decade ago.
Solihull, Birmingham: More than 6,000 people work here, producing Defender, Discovery, Range Rover and Range Rover Sport models.
Castle Bromwich, Birmingham: 3,200 staff produce Jaguar models, including the F-TYPE, XJ, XF and XK
Gaydon, Coventry: Land Rover design team are based at this engineering site, using virtual-reality technology, wind tunnels, CAD systems and a test tracks to develop new models
Halewood, Liverpool: More than 4,00 people work at this 300-acre site, producing the Range Rover Evoque and the Land Rover Discovery Sport.
Whitley, Coventry: JLR’s global headquarters is based here, along with Jaguar Design and Jaguar Land Rover’s corporate staff.
Wolverhampton: Almost 1,400 people work at JLR’s new Engine Manufacturing Centre, which the company proudly calls “one of the most cutting-edge facilities of its kind in the UK”.It produces low-emission 4-cylinder Jaguar Land Rover petrol and diesel engines, and is a key part of the company’s expansion strategy in recent years.
Union leaders are urging the government to heed Jaguar Land Rover’s warning, rather than play ‘Russian roulette’ with UK jobs.
Len McCluskey, general secretary of Unite, says Theresa May must heed the concerns being voiced by British business leaders, who fear new trade barriers with Europe.
McCluskey says:
“Tens of thousands of decent jobs - the sort we will need more than ever outwith the EU - are being put at risk by a Government that places its survival, indulging narrow, extremist views, above the well-being of the people of this country. This is simply not acceptable.
“So I say this to the Tory party, our jobs are not yours to play Russian roulette with. Drop your red lines and secure a decent deal, one that is to the benefit of the working people of this country.
“And if you cannot agree to put people before your ideology then move over and let a party that will get on with it.”
Earlier this week, Unite said it would push for an early general election if it wasn’t satisfied with the government’s Brexit deal.
PB Balaji, chief financial officer at Tata Motors Group, has also weighed in, warning against new trade barriers with Europe.
Echoing JLR’s statement, Balaji declares that it’s in “no-one’s interests” to end up with a Brexit which increases bureaucracy and reduces the productivity and competitiveness of the UK Industry.
Balaji adds:
“Jaguar Land Rover and Tata Motors have always maintained that the uncertainties from Brexit are avoidable and the business seeks clarity to ensure that industry takes timely and right decisions to manage the transition.
Additionally, Jaguar Land Rover needs free and full access to the single market beyond transition to remain competitive which we also firmly believe is in the best long term interests of the United Kingdom.
Shares in Jaguar Land Rover’s parent company have hit a five-year low, after it warned that a hard Brexit could drive it out of the UK.
Tata Motors slide by over 4% in early trading in Mumbai, as investors worry about the impact of Brexit on its business.
Tata’s shares have now lost half their value since September 2016, as Brexit stormclouds have gathered.
As Britain’s largest car maker, Jaguar Land Rover Automotive is a crucial part of Tata Motors. JLR posted reported pre-tax profits of £1.5bn in the last financial year - partly due to stronger sales to China and the US.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Britain’s largest carmaker has added its voice to the chorus of businesses warning against a hard Brexit, as negotiations with the EU (and within the cabinet) heat up.
Jaguar Land Rover piled fresh pressure on the government by warning that tens of thousands of jobs are at risk, if new trade tariffs with Europe are imposed after Brexit.
The news has knocked shares in parent company Tata Motors, and sent another shiver through Britain’s increasingly nervous auto industry.
CEO Ralf Speth quantified the impact, warning that a bad Brexit deal would wipe out more than £1.2bn of profits each year - making new investment simply impractical.
Speth declared:
“As a result, we would have to drastically adjust our spending profile – we have spent around £50bn in the UK in the past five years, with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome.”
JLR (like many other businesses) needs free and frictionless trade with the EU and unrestricted access to the single market, Speth explained.
The warning is deeply alarming for JLR’s 40,000 staff, as the company’s entire future in Britain could be at risk.
As Speth put it (via the FT)
“If I’m forced to go out because we don’t have the right deal, then we have to close plants here in the UK and it will be very, very sad. This is hypothetical, and I hope it’s an option we never have to go for.”
This intervention comes a day before cabinet ministers meet to discuss Brexit. Theresa May is pushing a ‘third way’ customs agreement, where the UK tracking goods as they come into the country, and levying EU import taxes on them only if their final destination is inside the EU.
That might address some of businesses’ concerns, but hard-line Brexiteers might argue it’s not a clean break with the EU (who might reject the idea anyway).
Also coming up today:
Bank of England governor Mark Carney is speaking at a major business summit in Newcastle. He’ll be discussing the Northern Powerhouse scheme - City traders will be listening for hints about an August interest rate rise too.
June’s UK car registration data are released this morning too - they may show sales rose for the third month running.
The agenda
9am SMMT car sales for June & first half of 2018
10.45am: Mark Carney speaks at the Great Exhibition of the North in Newcastle
3pm BST: US service sector PMIs for June