Leaked government post-Brexit analysis warns car makers face costs hike of up to 13 per cent

9:31 am, February 8, 2018

CAR makers could be hit by a 13 per cent rise in manufacturing costs following Brexit, according to leaked government internal estimates.

The so-called non-tariff barriers – expressed as percentages as if they were a regular tariff on trade between the UK and EU – were calculated by government economists.

The figures suggest that the automotive industry could be one of the hardest-hit sectors, seeing a potential increase in costs of five to 13 per cent.

Sky News claims to have caught early sight of the document, circulated to members of the key cabinet sub-committee ahead of their discussion today on future EU trading relationships.

The percentages have been calculated based on extra customs checks, diverging regulatory standards, rules of origin regulations and added paperwork.

The largest increase would be between seven and 20 per cent and hit the retail and wholesale sector, according to the figures reported by Sky News and listed below.

• Construction: 0 per cent
• Business services: 0 – 6 per cent
• Machinery, equipment and energy: 2 – 6 per cent
• Other services: 2 – 10 per cent
• Financial services: 5 – 10 per cent
• Other manufacturing: 5 – 12 per cent
• Motor vehicles: 5 – 13 per cent
• Chemical, rubber and plastic: 6 – 12 per cent
• Defence, education and health: 6 – 16 per cent
• Food and drink: 8 – 16 per cent
• Agriculture: 8 – 17 per cent
• Retail and wholesale: 7 – 20 per cent

A government spokesperson responded by saying: ‘This document does not represent government policy and does not consider the outcome we are seeking in the negotiations.

‘As ministers clearly set out in the House of Commons, this is provisional internal analysis, part of a broad ongoing programme of analysis, and further work is in progress.

‘We are seeking an unprecedented, comprehensive and ambitious economic partnership – one that works for all parts of the UK. We are not expecting a no-deal scenario.’

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