Wednesday 4 July 2018
BMW makes a vital U-turn on its misreported threat of leaving the UK, where it employs more than 8,000 people. Liam Fox’s Department for International Trade celebrates export growth, particularly to non-EU markets with Australia making a hefty outlay of £20bn on state of the art combat ships. At home, both JCB and Jaguar Land Rover are increasing investment, reflecting wider optimism in the business community about Brexit.
Why stay part of a constrictive trade bloc accounting for a decreasing percentage of the global economy? This was just one major economic argument for Leave during the referendum, and it runs truer today than over. Over the past twelve months, British exports to Canada, India and China grew 12.7%, 31.8% and 15.3% respectively, all ahead of a still respectable growth in exports to the EU (10%). Non-EU markets therefore accounted for an even larger share of British exports, 60.4%, £167.4bn. As UK consumers increasingly switch to homemade goods and services, the deficit narrowed by £12.2bn, down to £80.3bn, the lowest deficit since 2012.
Jaguar Land Rover has announced plans for £20bn worth of investment over the next five years. The PLC hopes to capitalise on the electric car revolution with the new Jaguar I-Pace, which will be followed by three new models up until 2023, one of which will be a long-anticipated replacement for the iconic Land Rover Defender. New engines will also be made at its Wolverhampton plant.
The contract for the largest “peace-time warship building program in Australian naval history”, amounting to £20bn, has been awarded to British defence giant BAE Systems. Construction of the 9 Hunter Class frigates will run from 2020 to 2027. The Australian government’s defence assessment of BAE’s bid concluded the global combat ship was “by far and away” the most capable and lethal contender. According to a source at the Australian department for defence, the British bid carried the “added bonus” of being delivered by one of the country’s closest strategic and political allies.
Heavy vehicles giant JCB will be building its new cabs at a new factory next to the A50 in Staffordshire. The £50m investment will scale double current production to 100,000 a year. “The investment is one of the biggest in the company’s history and underlines our commitment to manufacturing in Britain and in our home county of Staffordshire,” said the company’s Chief Executive Graeme Macdonald. JCB’s chairman Anthony Bamford is a vigorous critic of Brussels.
Following controversial reports published in the Financial Times via a misinformed customs manager, BMW has assured it will be staying in the UK. “Britain is the fourth biggest market in the world for us. It is also the home of Mini and Rolls-Royce. We are committed to our investment here and the 8,000 people we employ,” said Dr Ian Robertson, BMW’s special representative in the UK. UK car manufacturing rose 1.3% in May.
According to a survey by the Bank of England, just 37% of businesses count Britain’s withdrawal from the EU among their top three concerns. It is worth noting, as pointed out in this excellent Telegraph piece by business columnist Ambrose Evans Pritchard, that the EU’s average tariff is just 1.5%, less than the typical fluctuation in the value of the pound on a given day. 63% of UK businesses are untroubled by Brexit, up from 59% a year ago.