Airbus warns of danger over losing free movement
Losing free movement of labour and products would risk the competitiveness of Airbus, the Treasury select committee has been told. Airbus’ chief operating officer also told the MPs that WTO rules was not a “sensible fallback position.” Other industries including the automotive and chemicals industries agreed.
Tom Williams, chief operating officer at Airbus has warned a group of MPs that the company risks “entering a dangerous phase” if they lose free movement of labour and products post-Brexit. As reported in the Guardian, Williams added that the policies of Donald Trump’s administration meant its American rival, Boeing, would be “more than delighted” to see Airbus fail.
Williams was giving evidence to the House of Commons Treasury select committee. In the Independent, Williams is quoted as saying that as an international company, they needed “a fairly seamless process” where there is minimal disruption to the movement of people and products.
Airbus employs around 15,000 workers across the UK with the majority at its sites in Broughton and Filton. It also has manufacturing plants in other countries including Germany, France and Spain.
We’ve got a lot of Brits working in Europe and a lot of French and Germans working here in the UK, so for us as an international company, that’s what we need to have – a fairly seamless process.
And anything that disrupts that model will create inefficiency and could affect our long-term competitiveness
Tom Williams, chief operating officer of Airbus
The EU’s free movement framework offers them this “seamless process”. Will Theresa May’s “global Britain” do the same? Probably not. No, The prime minister’s “global Britain” is likely to mean more restrictions on workers moving around the EU and more barriers to trade.
In a speech on Brexit last week, Theresa May said that Britain would regain “control of immigration” from the EU as well as “control of our own laws”. This would take Britain out of the single market so that free movement no longer applied. She hailed a post-Brexit Britain as the chance to pave the way for a “global Britain”. She did this whilst signalling that Britain would walk away from the world’s largest trading block with “no deal” rather than a “bad deal.”
WTO is not a “sensible fallback position”
The “no deal” scenario would mean that the UK would leave the EU and would rely instead on World Trade Organisation (WTO) rules. However, the BBC reports Williams telling the committee that using WTO rules was not a “sensible fallback position.” He also added that he was “sceptical” that the WTO would be effective in dispute resolution. Some Brexiteers see a move away from the EU’s European Court of Justice as “taking back control” of our laws. However, this ignores the fact that the vast majority of trade between nations involves pooling sovereignty. So no one nation truly has full control if it wants to trade internationally.
In addition to the aerospace industry, the Financial Times reports that the committee also heard from the automotive and chemicals industries. They were similarly unenthusiastic about the prospect of the UK relying on WTO rules. Richard Carter, the managing director of chemicals company BASF UK, told the committee that WTO rules could add “£50-£60m to its annual operating costs.”
And chief executive of the Society of Motor Manufacturers and Traders Mike Hawes said that he sensed that investment in the UK was already being impacted. He added that car buyers could face paying an additional £2.4bn if WTO rules applied. And in a statement responding to the prime minister’s speech, he said that the government needed to deliver a deal “which includes participation in the customs union to help safeguard EU trade.” He also said that trade should be tariff-free as well as avoid “regulatory barriers that would jeopardise investment, growth and consumer choice.”
… we must, at all costs, avoid a cliff-edge and reversion to WTO tariffs, which would threaten the viability of the industry.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders
You can see his full statement at www.smmt.co.uk.
Future in the UK at risk
Tom Williams also warned that if Airbus’ competitiveness was at risk following Brexit, it would put future investment in the UK at risk. In the FT’s report, Williams said that whilst Airbus was “still highly committed to the UK”, decisions on longer term investment could be affected.
Committee member and Tory MP Steve Baker asked if the UK, outside of the EU, would be able to develop its own aircraft industry. Williams responded saying that “it would be extremely naïve to think we could go back to recreate an industry to which the barriers of entry, with the technology of today, are enormous.”
It’s not looking good for “global Britain.”