UK must maintain strong voice in EU, insist SMMT

Wednesday, April 2, 2014 - 15:55
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REPORT: Is the EU good for UK industry?

Being part of the EU is good for domestic industry, a new report by the Society of Motor Manufacturers and Traders (SMMT) has judged – but only if the UK maintain a strong voice on the continent.

The KPMG-produced report, ‘The UK Automotive Industry and the EU’, examines the relationship between the two bodies and how the UK’s membership affects the automotive sector.

Areas covered include the EU’s effect on investment, growth and job creation, identifying some of the key aspects of the UK’s membership.

It argues attractiveness to investors is enhanced by the EU, with access to the Single Market fundamental to UK vehicle manufacturing, supporting sales and facilitating supply chain growth.

The report also claims EU bargaining power in trade negotiations is critical to improving access to international growth markets, and EU funding has boosted R&D and innovation.

“Britain’s EU membership is fundamental to investment, growth and jobs in automotive companies of all sizes.”

Mike Hawes, SMMT

However, it also is insisted that the UK needs a powerful voice at European level discussions to ensure the specific needs of the country are met, safeguarding competitiveness and supporting its diverse nature.

The paper also claims reform is still needed to remove ‘burdensome EU regulations and reduce complexities which can undermine international competitiveness’.

Mike Hawes, Chief Executive of the SMMT, said: “The position of the UK automotive industry is clear – being part of a strong Europe is critical for future success.

“This report, and our member survey, shows that Britain’s EU membership is fundamental to investment, growth and jobs in automotive companies of all sizes.

“The recent success of the UK automotive sector is due to its global competitiveness; competitiveness that is enhanced by a supportive business environment at home and access to the huge single market.

“If we are to maintain this position and increase access to growing global markets, the UK must play a key role in shaping EU policies, budgets and regulations.

“We must also increase our share of EU innovation funding to take advantage of the expertise the UK has in low carbon and other automotive technologies and secure the long-term future of the automotive business in the UK.”

John Leech, Head of Automotive at KPMG in the UK, added: “Our report shows just how important the EU is to the UK automotive market – it is a highly globalised industry and integrated within the EU.

“This integration gives global manufacturers with facilities in the UK, for example, access to European consumers.

“Our analysis shows that, for the automotive industry, it is not a question of the EU versus emerging markets; they want to do business with both.

“The automotive businesses we spoke to also see the EU as an important bargaining force in global trade negotiations.

“Moreover, research and development, which is vital to the UK’s ability to be at the forefront of innovation in car manufacturing, is both heavily funded by the EU and requires access to the expertise and free movement of skilled engineers within the EU.

“While our report outlines the importance of EU membership to the UK automotive industry, it also poses some challenges to the sector.

“There is a clear demand for regulatory reform and consistent application of regulation so that complexity can be reduced.”

In addition to the report conducted by KPMG, a survey of SMMT members showed 92% of automotive companies believe staying in the EU would be best for their business.

Tellingly, more than 70% of respondents believe withdrawal from Europe would negatively impact their business in the medium-to-long-term.

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