Ian Nicholls considers the UK’s future within, and outside of, the European Union, following the General Election result…
Now that the dust has settled on the 2017 General Election, what does the result mean for Britain’s motor industry. Does it really face exile from the EU Single Market, or is everything up in the air?
Now I am no highly-paid political analyst, but here is my take on what has happened in the past seven years. The 2010 General Election exposed Britain as a divided country, resulting in a hung parliament. This in turn resulted in a Conservative-Liberal Democrat coalition government.
In the 2015 General Election, the Conservatives offered a referendum on EU membership as part of their manifesto. This was enough to break the political stalemate and gained the Conservatives a small working majority.
Nissan’s Leave-vote paradox
The 2016 EU referendum resulted in a 52 per cent vote to leave. Among the areas voting for leave was Sunderland, home of the Nissan plant and a solid Labour voting part of the country. Paradoxically, Nissan is a major exporter to the EU.
The 2017 General Election seems to have reverted to the status quo of 2010, a divided nation and a hung parliament. The Conservatives got 42 per cent of the popular vote and Labour 40 per cent.
The alternative view of the result is that 58 per cent of voters despise the Conservative Party and 60 per cent loathe the Labour Party. Jeremy Corbyn’s Labour Party is perceived as anti-business and the man himself has many dubious past associations while the Conservative Party is tainted with austerity amid a booming economy and endured seven weeks of criticism for its management of the National Health Service.
The political impasse
These factors and others have contributed to create a political stalemate. Theresa May called the 2017 General Election in the hope of increasing the Conservative Party’s majority in order to push through a Brexit deal without interference from the opposition parties.
It backfired spectacularly with the Conservative Party losing its majority. The Conservatives were forced to make a deal with the Democratic Unionist Party in order to cling on to power.
This means that Parliament will be able to veto whatever deal the Government comes up with, and maybe they will. This could lead to a lack of inertia and indecision as the politicians argue over soft or hard Brexit, and whether Britain should pay £90 billion or some pie-in-the-sky figure as part of an EU divorce bill.
Delays mean frustration
Whether a Brexit deal acceptable to all is agreed is up in the air, and any delay could lead to further frustration with the political process, even though the current state has been arrived at through democratic means.
For the British motor industry, the failure of the Labour Party to come anywhere near a majority probably came as a relief for two reasons. The party planned to embolden the Trade Unions, which probably caused nightmares about a return to the dark days of the 1970s.
Also Labour planned to raise Corporation Tax to fund its spending programme. A fair enough policy one might think, unless one takes an alternative slant on things.
And where does that leave us?
Low Corporation Tax could be looked on as a bribe to persuade major international companies to remain in a post-Brexit Britain instead of relocating to within the EU Single Market. All those shiny big Japanese-owned car factories were not built here just to sell to the UK market, they were put here to sell to Europe.
So the nation has decided. It does not want to be part of the EU, but does not want any one political party to have the mandate to push it through. From my point of view, it looks like a total shambles, and all of it self-inflicted through democratic means.
So, where does that leave our carmakers now?