In the – presumably now smoke-free – corridors of the European Commission (EC) last week – Britain’s Prime Minister – with his Hungarian counterpart – raged against the leviathan machine of Brussels – and lost.
At issue was the titanic struggle between David Cameron and 26 other Prime Ministers and Heads of State concerning who should step into the current EC President Jose Manuel Barroso’s shoes and effectively be an – unelected – figurehead for Brussels.
Go deeper with GlobalData
Despite apparent assurances given behind closed doors to Cameron elected government heads would choose the Portuguese’s successor, a volte face of immense proportions occurred and arch-federalist and former Luxembourg Prime Minister, Jean-Claude Juncker, was imposed as the supposed choice of the European Parliament instead.
The British press – mostly hostile to anything emanating from Brussels – are having a field day with the splendidly German moniker of ‘spitzenkandidat’ to describe Juncker – much to his annoyance – and are presenting Cameron’s setback as a heroic last stand reminiscent of Margaret Thatchers’ infamous “No, No, No” broadside against European Union imposed rules.
Juncker – motto: “Experience, solidarity, future” – whatever that means – and Cameron are now circling each other with at least a modicum of politeness – phone calls exchanged and a more conciliatory tone established – but reports suggest the Brit PM – to the delight of his party’s not inconsiderable Eurosceptic wing – is implying the Luxembourgois’ appointment will push the UK towards a Brussels exit.
“The status quo is not right for the EU and it is certainly not right for Britain – it has got to change,” said Cameron following Juncker’s appointment. “And at the end of 2017, it will not be me, it will not be the House of Commons, it won’t be Brussels that decides about Britain’s future in the European Union.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“It will be the British people, and it will be their choice and their choice alone.”
Cameron is referring of course to the ‘in-out’ referendum he has promised – if re-elected – on the future of the UK in the EU in three years time but what’s all this political rhetoric got to do with the automotive business?
Well, quite a lot actually.
Should Britain revert to the status of a non-EU country – a move a vast majority of the Society of Motor Manufacturers & Traders’ (SMMT) members believe would be detrimental – there is also a threat – despite the fiery political talk – to its ability to fight with a unified voice for treaties and trade agreements as well as access to not inconsiderable financial incentives from Europe for manufacturing.
OEMs and suppliers have a huge amount to gain from the gigantic Transatlantic Trade and Investment Partnership (TTIP) talks currently taking place between the European Union and the US – a deal to potentially create the world’s largest free trade zone and a position endorsed by recent CLEPA CEO Jean-Marc Gales.
“It would benefit automotive,” said Gales. “Not only because we would equalise tariffs, but the real opportunity in the FTA [Free Trade Agreement] between Europe and the US would be common standards.
“It will probably take ten years, but just imagine how many billions we could save every year.”
The SMMT commissioned a report by KPMG, which highlighted among myriad reasons why the UK should stay in the EU, Single Market access was “fundamental” to British vehicle manufacturing and ensuring supply chain growth, the latter a significant plank of the Automotive Council’s current work
Another key appeal of remaining in Brussels’ orbit say the consultants, is free movement of labour, but the study also cautions reform remains a vital component of continued membership, especially where it address reducing complexity, encouraging financial reform and applying regulations consistently.
So far so good and the arguments are well rehearsed – particularly here in the UK where intense wrangling concerning the vexed question of the merits or otherwise of Brussels hegemony has been an unchanging feature of the last 40 years.
But there is one more fly in the ointment, a source of intense irritation to Cameron and to be fair, a coalition of cross-party adherents too and that is the ever-looming question of Scottish independence from the UK.
This is no longer an abstract question. The Scots will be asked in two months time whether they wish to remain part of Great Britain or seek absolute rule from Edinburgh.
Should Scotland go its own way after more than 300 years of de facto unity with Britain, would that mean an exodus of automotive suppliers north as yet-unspecified incentives are put their way?
Take this from City of Sunderland chief investment officer, Tom Hurst, whose region plays host to the mighty Nissan and myriad suppliers.
“The big thing for the North East is if Scotland gets independence,” Hurst tells me.
“They will slaughter the North East of England. “Alex Salmond [Scottish National Party leader] made it absolutely crystal clear if he can [attract] people from the North East of England, he will throw the kitchen sink at it.”
Just to add to the general feeling of uncertainty, the Sunderland CIO noted feedback the Council had received, indicated if the UK were to leave the European Union following an ‘in-out’ referendum in 2017, that would be a “disaster.”
The UK has not been at such a political crossroads for three hundred years. Add to that combustive cocktail, the rise of nationalist parties such as UKIP, whose automotive policy remains resolutely unclear and it’s no wonder cities, OEMS, suppliers and politicians are bobbing about in a sea of enormous uncertainty.
“The position of the UK automotive industry is clear – being part of a strong Europe is critical for future success,” says SMMT chief executive, Mike Hawes.
“This [KPMG] report, and our member survey, shows 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.”
Juncker’s appointment could well accelerate Britain’s move to the European exit, but Scotland may well pre-empt the whole shooting match and radically change the UK automotive landscape to boot.
