Andy Road is Mayor of the West Midlands, and is a former Managing Director of John Lewis.
Because the nation continues to grapple with the immense impression of Covid-19 it already appears a lifetime in the past that Brexit was the dominant subject on our TV screens.
Proper now, all our efforts are rightly focussed on the 2 key challenges of bringing down the an infection fee whereas rolling out vaccinations. On the identical time, unprecedented monetary help continues with large funding in tasks that may assist kickstart the financial system and create new jobs.
But just a few weeks in the past the Authorities achieved what for a time appeared in peril – a free commerce cope with our largest buying and selling companions, the EU. We should not overlook what a important second this was for our nation, or the numerous companies and jobs that depend upon it.
The information was met with actual aid right here within the West Midlands. I had lengthy argued how very important a deal was for our financial system, provided that exporting makes up an even bigger proportion of our GDP than another English area.
All through the Brexit debate, a lot was fabricated from the brand new alternatives that may circulation from leaving the EU. Now we should be relentless in in search of and securing these alternatives. On this column, I wish to define how certainly one of these lies inside our all-important automotive business – and the way investing in its future success can ship advantages far past the automobile factories themselves to create a brand new post-Brexit financial bedrock for the area.
In fact, once we speak in regards to the automotive business we primarily take into consideration the automobile producers themselves, like Jaguar Land Rover right here within the West Midlands. At present, JLR is the flagship of a Twenty first-century automotive cluster, a focus of companies which has advanced from our heyday as Britain’s motoring heartland.
In spite of everything, Jaguar is simply one of many many motoring manufacturers with historic hyperlinks to our area: Rover, Singer, Triumph, Healey, Humber, Commonplace, Land Rover, Daimler, Morris, Austin, Hillman – the listing goes on and on.
However whereas these well-known names employed hundreds on their meeting traces, it was the huge provide chains that supported them that had been the spine of our broader industrial energy. Again then, large Birmingham firms like Lucas and Dunlop dominated the provision chain and supplied mass employment at landmark premises, however a myriad of smaller operations supported them too.
Right here is the chance that Brexit brings – within the small print. As a part of with the ability to proceed to commerce tariff free sooner or later, merchandise constructed right here should have a minimal quantity of their components made right here (or within the EU) to rely as British in the case of exporting.
This idea is named “Guidelines of Origin” – not probably the most thrilling of phrases however one thing I, and others, have been campaigning relentlessly on. It merely implies that for a product to be categorized as “Made in Britain” it has to incorporate a major proportion of British components – and never simply be a group of international parts with a Union flag caught on it on the final minute and marked “British”. This requirement gives an enormous alternative to develop the native provide chain for our largest manufacturing business.
As in lots of manufacturing sectors, in latest a long time a lot of our automotive provide chain has, regrettably, moved from the West Midlands to Asia and the remainder of the world, taking with it high quality jobs. Now, because of the EU commerce deal, the automotive business and others has a driving crucial to supply extra components and parts from the UK – or face tariffs that may make its exports uncompetitive in our largest buying and selling associate.
The edge for British-made components begins at 40 per cent however will quickly attain 55 per cent at the least – creating large scope and alternative to rebuild and develop our automotive provide chain. Crucially, as a part of the settlement, parts may be made right here or within the EU, retaining buying and selling ties that permit necessary practices comparable to “simply in time supply”. Nevertheless, there’s a actual crucial to develop our native provide chain.
Let’s be clear: we have already got an excellent begin, with a profitable provide chain already in place. Now we have an enormous community of help companies which have developed over a long time, with a observe report of remodeling to fulfill the altering calls for of the automotive sector. We even have the muse industries that make the metals and supplies that underpin car manufacture at greater than 20 websites.
Some companies are already main the fightback, like Alucast within the Black Nation, who I not too long ago visited – an automotive provider increasing and rising by adopting new expertise. We’re nicely positioned to benefit from the commerce deal and develop this ecosystem of suppliers. Whereas the times when virtually each automobile half was made domestically are a distant reminiscence, we now have an actual likelihood to deliver a few of these jobs and vegetation again from Asia to the West Midlands.
Nevertheless, this isn’t about returning to the previous, it’s about embracing the longer term. In ten years’ time, the one new vehicles bought in Britain shall be electrical or hybrids. Your complete sector is on the cusp of a revolution that may require not solely rethinking its merchandise however retooling and refitting a lot of the business itself.
The best worth components in any electrical automobile would be the batteries that energy it. So, making certain our personal potential to construct these automobile batteries at scale on this nation is important. Meaning ‘gigafactories’, just like the one constructed by Tesla in Nevada. The Authorities has recognised this by allocating £500m in direction of this expertise. Right here, within the West Midlands, £108million has already been invested in a state-of-the-art Battery Industrialisation Centre in Coventry.
A gigafactory, and the provision chain that may gravitate round it, will make an enormous contribution to assembly the necessity for British-built components in our vehicles. Will probably be very important not simply future jobs, however for retaining those now we have.
The pandemic has had a big impact on the West Midlands financial system, and naturally the impression of coronavirus should stay our primary focus as we combat to guard the NHS and livelihoods.
However the Brexit deal supplied one of many few moments of actual optimism for enterprise. Now we should grasp the prospect to begin a serious enlargement of our automotive provide chain. For the British automobile business to thrive sooner or later it wants extra British-built components – and meaning extra British jobs.
As we plot our method out of the pandemic, the small print of the EU commerce deal gives a really massive alternative certainly.