Yahoo Finance Hard Brexit 'will lead to 10% increase in car repair bills' for British motorists
A hard Brexit could make a stop on the hard shoulder a whole lot more expensive for British motorists, a new report has warned.
Industry body the Society of Motor Manufacturers and Traders (SMMT) estimated that the cost of repairing a car could increase by as much as 10% if Britain exits the European Union without a trade deal.
Britain’s collective car repair bill could increase by more than £2bn due to tariffs and trade barriers if it leaves the bloc and defaults to World Trade Organisation (WTO) rules.
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The report claims that a WTO tariff on imported car parts of between 2.5 per cent and 4.5 per cent would result in car owners spending an extra £21 a year for replacement components. Regulatory barriers, customs delays and subsidies would add around another £49.
“If we don’t secure a new trading relationship with the EU that is free of tariffs and customs checks, British consumers could face significant increases to their annual car repair bill due to new tariffs and other trade barriers,” said SMMT chief executive Mike Hawes.
The warning comes amid similar concerns from various sectors about the potential implications of a hard Brexit.
The report also comes on the same day Chancellor Philip Hammond sought to soften the government’s tone on Brexit, telling French newspaper Le Monde that Britain wouldn’t cut tax and regulations in an effort to undercut EU countries.
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His comments represent something of a U-turn for the government. Prime Minister Theresa May has repeatedly said that “no deal is better than a bad deal”, suggesting a ‘cliff-edge’ Brexit in which the UK falls back on WTO rules if a trade deal can’t be reached was a realistic option.
“Government must now prioritise an interim arrangement that maintains single market and customs union membership until the right trade deal with the EU is implemented”, said SMMT chief exec Hawes, echoing cross-industry calls for single market membership amid confusion over the government’s plans.
