The Honda presentation by Patrick Keating highlighted the scale of the operation here in Swindon: 3500 permanent employees and the manufacture of 160,000 cars per year. The cars go all over the world: 15% to the UK, 35% to Europe, 43% to North America and 7% to the rest of the world. 20% of the Honda workers at the Swindon plant are EU nationals, whose future status remains unknown.
Honda relies on ‘just in time’ logistics to support the movement of 2 million parts per day. When the UK becomes a third country to the EU, there will be an increased administrative burden to ensure compliance with customs declarations for the parts and the packaging- an estimated 60,000 more declarations per year than currently.
This can potentially be absorbed by the larger companies, if they aren’t hit by an EU labour shortage, but smaller businesses will find the new administrative hurdles harder to jump. From Honda’s perspective, a smooth and predictable transition out of the EU will mean they can probably stay trading from the UK, although ultimately remaining within the Customs Union would allow them the ‘frictionless trade’ they are after.
The outlook and feedback from smaller businesses were concerning. Matt Griffith of Business West spoke about the fact that SMEs in the south-west are crying out for clarity since they may need to budget for extra staff or capital outlay for the new processes. There are also concerns regarding the competitiveness of British businesses in Europe when they are compromised on cost and time. The potential damage to the customer base is a real concern for smaller businesses, as well as a lack of knowledge in smaller firms about how to approach new administrative processes where there is no corporate knowledge.There is no doubt that a ‘hard’ or no-deal Brexit threatens the livelihoods of small business owners in Swindon.
Simon Dubbins, International Director at Unite the Union spoke about the real impact that Brexit is already having in the UK. In the last 12 months, there has been a decline of 90% in foreign investment in this country, and there is a real fear that Brexit will herald the erosion of workers’ rights here that are safeguarded by EU Law. Unite will reject a Brexit that does not allow frictionless trade with the Single Market, access to the Customs Union, protection and maintenance of workers’ rights, the rights of EU nationals here and UK nationals in the EU, that threatens peace in Northern Ireland, threatens Gibraltarean status, restricts our membership of important EU regulatory bodies such as Euratom.
Simon was clear that a hard Brexit would be catastrophic. The Chequers Deal will not work as it simply covers goods not services, although our exports are 80% in the service sector. The view of the Trades Unions Council is to keep the option of a People’s Vote on the table, but the option of a General Election would be preferable if a deal cannot get through Parliament.
The view from the UK Parliament was no rosier: the Government are attempting to reduce scrutiny of the bills passing through Parliament by using the so-called Henry VIII powers to delegate legislative power to Cabinet ministers.
Anneliese Dodds MP had 3 main observations:
– we need to modernise our view of our relationship with the EU27, and to adopt a more open and mature approach if we are going to reach an agreement;
– the deal cannot simply rely on new rules, but requires the creation of infrastructure under HMRC and Customs and Border staff, to ensure we can follow those new rules;
– we absolutely must deal with the reasons people voted Leave in the first place: the largest squeeze on real wages in 200 years, fears over job security, housing and living standards. With the Government paralysed by Brexit, these issues are still not being addressed.
Clare Moody gave the perspective from Brussels where we as a country are suffering reputational damage. The EU27 read our newspapers and the tendency to insult them has been counter-productive. While there is a will in Brussels to reach a deal, the EU27 are moving on, with Brexit becoming a 3rd or 4th order issue for them. Ultimately the EU is a rules-based system, so any attempt by the UK Government to get around the rules in any way simply will not work.
Brexit also means that the UK is giving away access to some of the areas where we have been a leading nation, such as in Research and Development. The EU is planning its post 2021 R&D investment and we do not feature.
There is a possibility that the UK Government will ‘fudge’ our exit next year without a defined deal before the transition period starts.This ‘blindfold Brexit’ is a scenario that would be devastating for the national interest as we will be past the point of no return but without a deal. It is possible that the very real, if often understated, Northern Irish ‘backstop’ issue will force a decision.
The Q&A session covered everything from the damage that Brexit will cause to the fabric of our multi-cultural society, through the detail of the Northern Irish border issue, a no-deal scenario and how to prepare for it, and the UK’s environmental obligations under the Paris Treaty.
When pressed on what Brexit will actually look like, the panel opted for the ‘fudge’ being most likely, with the ensuing 18 months of Brexiteer in-fighting over the final deal and a potential constitutional crisis if nothing can get through Parliament.