UK car industry fears Northern Ireland protocol uncertainty could harm investment – business live | Business

UK car industry: Uncertainties around Northern Ireland Protocol could harm investment

The UK’s car industry is worried that the UK’s push to scrap parts of the Northern Ireland Protocol could harm investment in the sector.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, warned this morning that Brexit has pushed up costs for car manufacturers, and that investment will suffer unless there is stability.

Speaking at the SMMT’s International Automotive Summit this morning, Hawes said there has been ‘little progress’ since the UK and EU agreed the Trade and Cooperation Agreement (TCA) at the end of 2020.

He says:

Brexit was a trauma; But it is not yet ‘done’ and the effects of it still being felt.

There was an immense sense of relief when the deal was finally made; it sought to protect this sector.

We viewed the TCA as a foundation, but there has been little progress since.

The promised working groups with the EU have not met. Critical UK-specific regulation has not been hammered out. Brexit costs are there and we cannot ‘kaizen’ them out. The progress promised has not materialised.

“Brexit was a trauma but it is not yet done, uncertainties remain and could impact investment in UK Automotive,” Mike Hawes, @SMMT chief executive pic.twitter.com/Je6YpHnMs3

— Phil Curry (@Autovista24Phil) June 28, 2022

Hawes also warned that uncertainty over the Northern Ireland Protocol could deter investment, just as the government presses businesses to commit more.

He said:

The Chancellor has recently been critical of business for a lack of investment.

But investment needs stability. It needs trust not uncertainty.

For years business, especially automotive, operated with the uncertainty of a referendum, stalling trade negotiations, the threat of no deal. There are now uncertainties around Protocols. Investors will take note. They will pause, but investments are made in a small window.

They will not and cannot wait forever.

The proposed legislation to allow the UK to unilaterally rip up Brexit arrangements for Northern Ireland passed its first hurdles in the House of Commons last night, despite the risk of a trade war with the EU.

But there was opposition from some Conservative MPs; including former prime minister Theresa May, who said the move is illegal and unnecessary.

Hawes adds that the TCA has been “critical” in releasing investment, once the threat of a no-deal Brexit was lifted.

In the year following the deal, £4.9bn was announced for Sunderland, Ellesmere Port, Halewood and elsewhere. Billions pledged for new technology, battery facilities, new zero emission models.

But we must unlock further investment, into new jobs, new skills, new businesses. To do this, Government must do all it can to create stability, to help keep us competitive, especially during this storm.

“Brexit was a trauma but it is not yet done, uncertainties remain and could impact investment in UK Automotive,” Mike Hawes, @SMMT chief executive pic.twitter.com/Je6YpHnMs3

— Phil Curry (@Autovista24Phil) June 28, 2022

Record petrol prices is ‘pump fiction’, says AA

The AA has claimed that petrol and diesel prices are ‘pump fiction’, as motorists fail to see the benefits of falling wholesale costs.

Petrol crept up to a new alltime average of 191.10p per litre on Monday, the latest data shows, while diesel only fell slightly from last Saturday’s record high, to around 198.96p.

This means it costs over £105 to fill a 55-litre family car with petrol, up from around £72 a year ago.

Edmund King, AA president, says these prices don’t reflect the recent drop in wholesale petrol prices.

“The pump prices are now more like ‘pump fiction’ as they don’t reflect the general downward trends we have been seeing in wholesale prices. This is now an urgent situation. The Prime Minister has hinted at action but we need more than hints.

Pressure to force price transparency and a cut in duty would be a step in the right direction.”

RAC fuel spokesman Simon Williams hope that prices will start to fall:

“We strongly hope pump prices have peaked for the time being and will now start to decrease in line with wholesale prices which reduced last week. That, however, is the hands of retailers.”

A firefighters’ union leader is warning of strikes, after receiving an “utterly inadequate” 2% pay offer.

The Fire Brigades Union (FBU) is recommending rejection of the offer, which is well below the UK’s inflation rate of 9.1%.

Matt Wrack, FBU general secretary said the offer would mean “a further cut in real wages to firefighters in all roles” in the midst of the cost-of-living crisis.

The pay offer will now go for consideration by members, with the union’s executive council recommending rejection.

Wrack says the union will “consider all options, including strike action.”

“This latest insulting proposal follows 12 years of government-imposed reductions in real wages.

“This proposal will anger firefighters, those working in emergency fire controls, and those in all uniformed roles in fire services across the UK.

“It is galling to be insulted in this way, especially after our contribution to public safety during the pandemic.

“Firefighters will now inevitably begin to discuss reactions, including industrial action.

The FBU says firefighters’ real pay has been cut by 12% since 2009, or nearly £4,000.

“You’ve got to wonder what planet these people are on” – hear the latest from @MattWrack on the derisory 2% pay offer👇

Don’t sit idly by, make your outrage heard, go to your branch consultation meetings https://t.co/1WHI3STHsd

— Fire Brigades Union (@fbunational) June 28, 2022

Britons crack down on waste in ‘unprecedented’ cost of living crisis, says Sainsbury’s boss

Cash-strapped Britons are buying more cheap frozen food to help cut waste and cope with “unprecedented” soaring living costs, the boss of supermarket group Sainsbury’s has told Reuters.

Chief executive Simon Roberts said shoppers were “watching every penny and every pound”, visiting stores more often but buying less on each trip, and using technology to monitor their spending to avoid “till shock” at the check-out.

Roberts, a 30-year veteran of the UK retail sector who has run Britain’s second-biggest supermarket since 2020, addded

“In many ways there is no playbook for what we’re dealing with at the moment, these are unprecedented circumstances.”

Data from Kantar last week showed that supermarket inflation hit 8.3% per year in the past month, adding £380 to the annual cost.

In a pre-recorded video message, Chancellor Rishi Sunak told the SMMT’s audience of automotive leaders that the sector is “incredibly important to the UK economy” and “that’s why the Government is doing more to support you”.

He said this includes a commitment for £2.5bn of investment since 2020 to support the transition to zero emission vehicles.

That doesn’t really tackle the concerns we’ve heard from the SMMT; the FT’s global motor industry correspondent, Peter Campbell, for one, isn’t impressed:

As a rule of thumb, politicians who pre-record and don’t take Qs *always* look worse than those that turn up/tune in and bother to take Qs.

Even Chris Grayling getting mauled came across better than those (Rishi, Shapps) that pre-rec and then run.https://t.co/Oy3bhWhbDC

— Peter Campbell (@Petercampbell1) June 28, 2022

As if all that wasn’t enough to worry about, more than 22,000 UK jobs making engines or other traditional car parts are placed at risk by the shift to electric vehicles.

The SMMT has calcualted that at least 22,000 jobs and £11bn of turnover in the UK is currently reliant on internal combustion engine-based technologies.

Thost jobs, working on products such as engines, exhaust systems or fuel tanks, would be threatened once the sale of petrol or diesel models is phased out. So the SMMT is keen for the government to help the industry adapt to the zero emission future.

It warns:

The timeframe to act is narrowing, however, with 2024 a looming milestone when EU-UK Rules of Origin get tougher and the Government’s Zero Emission Vehicle Mandate kicks in.

With the UK implementing one of the most ambitious road transport decarbonisation timelines in the world, phasing out the sale of new petrol and diesel cars and vans by 2030, the urgency of action required is self-evident.

NEW: @SMMT warns that 22,000 UK engine jobs are at risk from EV transition.

“Many risk being left behind as the jobs and skills involved with internal combustion engine technology may not be transferable,” warns @MikeHawesSMMT.

Full story: https://t.co/xKzxeKqbC9

— Peter Campbell (@Petercampbell1) June 28, 2022

UK car makers are also calling for urgent action to cool their spiralling costs.

The SMMT has calculated that the sector’s energy bill will spiral by £90m this year, due to the surge in electricity prices.

It says:

UK electricity prices are the most expensive of any European automotive manufacturing country and 59% higher than the EU average, meaning that last year, UK manufacturers could have saved almost £50m on energy costs if they were buying in the EU rather than the UK.

SMMT chief executive Mike Hawes warns that addressing the UK’s high energy costs is “the industry’s number one ask”.

UK car industry: Uncertainties around Northern Ireland Protocol could harm investment

The UK’s car industry is worried that the UK’s push to scrap parts of the Northern Ireland Protocol could harm investment in the sector.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, warned this morning that Brexit has pushed up costs for car manufacturers, and that investment will suffer unless there is stability.

Speaking at the SMMT’s International Automotive Summit this morning, Hawes said there has been ‘little progress’ since the UK and EU agreed the Trade and Cooperation Agreement (TCA) at the end of 2020.

He says:

Brexit was a trauma; But it is not yet ‘done’ and the effects of it still being felt.

There was an immense sense of relief when the deal was finally made; it sought to protect this sector.

We viewed the TCA as a foundation, but there has been little progress since.

The promised working groups with the EU have not met. Critical UK-specific regulation has not been hammered out. Brexit costs are there and we cannot ‘kaizen’ them out. The progress promised has not materialised.

“Brexit was a trauma but it is not yet done, uncertainties remain and could impact investment in UK Automotive,” Mike Hawes, @SMMT chief executive pic.twitter.com/Je6YpHnMs3

— Phil Curry (@Autovista24Phil) June 28, 2022

Hawes also warned that uncertainty over the Northern Ireland Protocol could deter investment, just as the government presses businesses to commit more.

He said:

The Chancellor has recently been critical of business for a lack of investment.

But investment needs stability. It needs trust not uncertainty.

For years business, especially automotive, operated with the uncertainty of a referendum, stalling trade negotiations, the threat of no deal. There are now uncertainties around Protocols. Investors will take note. They will pause, but investments are made in a small window.

They will not and cannot wait forever.

The proposed legislation to allow the UK to unilaterally rip up Brexit arrangements for Northern Ireland passed its first hurdles in the House of Commons last night, despite the risk of a trade war with the EU.

But there was opposition from some Conservative MPs; including former prime minister Theresa May, who said the move is illegal and unnecessary.

Hawes adds that the TCA has been “critical” in releasing investment, once the threat of a no-deal Brexit was lifted.

In the year following the deal, £4.9bn was announced for Sunderland, Ellesmere Port, Halewood and elsewhere. Billions pledged for new technology, battery facilities, new zero emission models.

But we must unlock further investment, into new jobs, new skills, new businesses. To do this, Government must do all it can to create stability, to help keep us competitive, especially during this storm.

“Brexit was a trauma but it is not yet done, uncertainties remain and could impact investment in UK Automotive,” Mike Hawes, @SMMT chief executive pic.twitter.com/Je6YpHnMs3

— Phil Curry (@Autovista24Phil) June 28, 2022

Full story: Heathrow airport ordered to cut passenger charges each year until 2026

Julia Kollewe

Julia Kollewe

A plane taking off from Heathrow Airport
A plane taking off from Heathrow Airport Photograph: Steve Parsons/PA

London’s Heathrow airport has been ordered to reduce its landing charges over the next four years, a proposal that will please airlines while the airport said it would result in a worse experience for passengers.

The move by the Civil Aviation Authority (see opening post) deals a blow to the airport, which had argued for higher fees to help protect customer service, at a time when the travel industry is recovering from the pandemic.

The regulator said the average maximum price for each passenger that airlines will pay Heathrow will fall from £30.19 now to £26.31 in 2026. Excluding the effects of inflation, this is equal to a near-6% reduction every year until then.

The CAA said its final proposals would “be in the best interest of consumers”. It is undertaking a consultation and will announce its final decision later this year.

In a bitter dispute, airlines had pushed for a reduction in landing charges, while Heathrow argued that this would hit customer service. The CAA said the two sides had “starkly divergent views on the level of charges for the next five years”.

The airport’s chief executive, John Holland-Kaye, said:

“The CAA continues to underestimate what it takes to deliver a good passenger service, both in terms of the level of investment and operating costs required and the fair incentive needed for private investors to finance it.

“Uncorrected, these elements of the CAA’s proposal will only result in passengers getting a worse experience at Heathrow as investment in service dries up.”

More here:

Lagarde: We’ll go ‘as far as necessary’ to cool inflation

Inflation in the euro area is undesirably high and it is projected to stay that way for some time to come, European Central Bank chief Christine Lagarde has warned this morning.

Speaking at the Forum on Central Banking in Sintra, Portugal, this morning, Lagarde says the ECB – which expects to raise interest rates from record lows in July – will “go as far as necessary” to get price rises back to its 2% target.

As she puts it:

As Victor Hugo is said to have remarked, perseverance is the “secret of all triumphs”.

Lagarde blames “an extraordinary series of external shocks”, including global supply chain disruption and the Ukraine war, for driving eurozone inflation to a record 8.1% last month.

She vows to “act decisively”, if needed, to “stamp out the risk of a self-fulfilling spiral” if higher inflation threatens to de-anchor inflation expectations.

Lagarde warns that rising inflation will eat into people’s real incomes — which could lead to a loss of demand and pressure on the jobs market. But she plays down speculation of a recession, saying:

In this setting, we have markedly revised down our forecasts for growth in the next two years. But we are still expecting positive growth rates due to the domestic buffers against the loss of growth momentum.

Fears of a new eurozone debt crisis flared up this month, as the gap between Italian and German borrowing costs widened.

Lagarde said that European Central Bank’s new crisis tools will prevent a disorderly widening of bond yield spreads while keeping pressure on eurozone governments to keep their budgets in order:

“The new instrument will have to be effective, while being proportionate and containing sufficient safeguards to preserve the impetus of Member States towards a sound fiscal policy.

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