A compensation package for the car industry would have be over £25 billion to cover the cost of border disruption caused by a no-deal Brexit.
With Steve Barclay confirming to the House of Commons Brexit Committee this morning that the government would be pursuing a compensation package for the car industry and sheep farmers, new research from Best for Britain shows that the package would need to substantially higher than compensation packages figures currently being touted by the government.
According to the Society of Motor Manufacturers and Traders' 2019 UK automotive trade report, the end to borderless trade could bring crippling disruptions to the industry’s just-in-time operating model, with every delay of a minute costing £50,000 in gross value added – amounting to some £70 million a day in the worst case scenario.
Using this figure, Best for Britain estimates that Barclay's promised compensation package would have to ring fence over £25 billion for the car industry alone to make up for no-deal disruption in the year after Brexit, when disruption is likely to be at its worst.
Commenting, Best for Britain CEO Naomi Smith said:
"It's now clear beyond any doubt that leaving the EU would result in a huge costs for the car industry, threatening its survival and thousands of jobs around the country.
"Of course, the government would never give this money back. They promised millions for deprived cities that never materialised.
"The public must have the chance to put the brakes on Brexit to prevent the damage it will cause."
How did we make the calculation?
The Society of Motor Manufacturers and Traders (SMMT) calculated that the cost of a no-deal Brexit on the car industry would be up to £70 million per day. If Britain were to leave the EU without a deal, this would mean a cost of £25,550,000,000 in the year immediately following departure.