Automotive must be central to future trade deals

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As the world re-emerges from the pandemic, Britain’s export-led automotive industry is the country’s competitive advantage for driving growth, creating jobs and tackling climate change. In 2020, vehicle export revenues reached £27  billion despite disrupted trade flows and shuttered markets across the globe, making vehicles built here more valuable to the UK than both power-generating machinery and gold.

The figures were announced this week at SMMT’s inaugural Global Trade Conference, which welcomed delegates, speakers and media to discuss the myriad issues affecting global automotive trade. The event saw the launch of Driving Global Britain, a new SMMT report, detailing how the UK’s trade policy must place automotive at its heart.

As manufacturing shifts away from internal combustion engines to electrified powertrains and batteries, the report sets out how government should ensure all future trade deals include dedicated automotive annexes and provisions to reduce tariffs and regulatory barriers as well as establishing Rules of Origin that reflect the UK’s future supply base.

These conditions would help drive the growth of Global Britain and sustain our place as an economic, industrial and environmental leader.

Trade alone, however, will not be enough to ensure a recovery for the industry and the UK economy. The business rates system, rates which are an absolute, and relatively high fixed cost, is also due an overhaul as it is a competitive disadvantage for UK automotive plants when compared to others across Europe and beyond. The current arrangements, whereby anyone wanting to invest in new equipment – especially green technologies – sees their business rates rise is a perverse disincentive to investment and productivity improvement. Rateable and non-rateable plant and machinery should be removed from manufacturing business rates valuation in order to address the uncompetitive situation that is currently faced.

UK Automotive remains fully committed to the government’s levelling-up agenda and net zero ambitions but we need a modern and progressive rates regime, one that incentives investment and helps deliver productivity improvements for the sector, and economy, to thrive on the international stage.

Sticking with the theme of being competitive on the global stage, the Automotive Council UK Competitiveness and Business Environment Group, support by SMMT, is carrying out a new industry wide survey into the sector’s international competitiveness. The results will form part of a new report, the third iteration, to be released in the near future.

To make this important study as representative as possible, the more automotive manufacturing and supply companies that take part the better. To support this study, please click here to fill in the survey, which will only take some 10 minutes. All information provided will be kept strictly confidential with the results anonymised. I encourage you to take part.

The post Automotive must be central to future trade deals appeared first on SMMT.

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