‘National Conservatism, Economic Reality and Fake Sovereignty’

In today’s interdependent economic world, UK companies are just too small to survive and thrive without cooperation with the EU, writes Jon Bloomfield

The National Conservatism Conference in London this month heard from leading politicians, commentators and movers and shakers on the British and US hard-right extolling the virtues of Brexit and the potential it opens up for Britain.

They were full of complaints about how these opportunities were being thwarted by a range of insidious forces – the ‘Remainer elite’, the blob, cultural Marxists, Conservative non-believers – but the underlying thesis was clear.

As Douglas Murray so graphically put it, even if the Germans had “mucked up” twice in the 20th Century, nationalism was the future and Brexit – having freed the UK from the shackles of Europe – was the opportunity.

As one of the conference speakers, Matthew Goodwin, wrote in a follow-up article, “Brexit ushered us all into an incredibly exciting and entirely new era in our national history. An era of democratic accountability in which Britain has once again become a self-governing, sovereign nation”.

But UK car-makers haven’t got the message.

The end of the conference coincided with the publication of the evidence to a government committee by the world’s fourth-largest car-maker, Stellantis, calling for an urgent renegotiation of the UK-EU Trade and Cooperation Agreement (TCA). Without it, car production within the UK would be threatened along with up to 800,000 jobs in the automotive and associated industries. Jaguar Land Rover and Ford followed suit.

The timing of the two events served to highlight the fallacy of the Brexiters’ favourite claim – that our departure from the EU means we have “once again” become a “sovereign nation”. 

Unsurprisingly, there was no press coverage on the contrast, despite its potential devastating impact. In the technical language of its submission to the inquiry, Stellantis stated its concerns “on the impacts of the competitiveness of the UK as a player within the global automotive industry with the planned tightening of the Rules of Origin for batteries in 2024”.

Current post-Brexit rules require that 40% of an electric vehicle’s parts by value – the Rules of Origin – are to be sourced in the UK or EU if it is to be sold on the other side of the Channel without a 10% trade tariff. The proportion is due to rise over the next three years and, with most battery production still occurring in China, this means that vehicle manufacturers could fall foul of the rules and be forced to pay the tariffs. That would make their vehicles uncompetitive.

With UK production already in crisis – British plants built only 775,014 cars during 2022, the lowest annual figure since 1956 – the prospect of severe, structural decline and consequent unemployment is real.

The uncomfortable truth that Brexiteers refuse to face is that the nature and span of modern productive industry no longer matches the geographical boundaries of small and medium-sized countries.

Increasingly since the Second World War, economics has slipped the leash of the nation state. Big companies operate at both a continental and global scale, whether in cars, chemicals or aviation. What is currently occurring in the vehicle industry is an urgent drive by the US and EU to make the green transition in transport to match the surge by China.

With the European Green Deal and the US Inflation Reduction Act, governing authorities are shedding 40 years of neoliberalism and offering state subsides, grants and investments to accelerate the climate transition. The Labour Party is showing signs of following suit. Green Keynesianism is in vogue.

To survive, the UK vehicle industry has to remain within the orbit of the EU. That’s written into the TCA Boris Johnson and Lord David Frost signed in December 2020 – even if they refuse to acknowledge the fact.

The TCA established a very strong level of protection for regulatory standards and in relation to vehicles on rules of origin. To maintain its tariff-free access to the Single Market in goods, the UK agreed not to engage in deregulation that would give it an unfair advantage over producers on the EU side. The agreement on protecting higher standards means that the UK Government is obliged to follow the rules set by the Single Market.

The TCA secured a notional sovereignty but UK manufacturers still have to operate within the EU’s gravitational pull. As Stellantis, Ford and Jaguar are saying, there is no alternative if the vehicle manufacturing in the UK is to survive.

In the short-term, the time-scales on Rules of Origin in the TCA could be adjusted, especially since EU vehicle manufacturers are also having diffic