Ireland: Warning that 12,000 motor industry jobs could be lost in event of no-deal Brexit and increase in Vehicle Registration Tax - - PressFrom - United Kingdom
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IrelandWarning that 12,000 motor industry jobs could be lost in event of no-deal Brexit and increase in Vehicle Registration Tax

16:15  17 september  2019
16:15  17 september  2019 Source:   independent.ie

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Warning that 12,000 motor industry jobs could be lost in event of no-deal Brexit and increase in Vehicle Registration Tax © � 2019 Bloomberg Finance LP SIMI director general Brian Cooke said increased taxes in the Budget will only lead to a further reduction in new-car sales and potentially a further increase in used imports

UP to 12,000 jobs could be lost in the motor industry if there is a no-deal Brexit and the government increases Vehicle Registration Tax in the Budget, a leading economist predicted today.

Economist Jim Power warned that even with no Vehicle Registration Tax (VRT) increases and a ‘soft Brexit’ there will still be a slump in new-car sales and a risk to jobs.

He said the industry was “in the most vulnerable place” since the recession of 2008.

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The prospect of a no - deal Brexit became a real possibility after he was elected the new leader of the Conservative Party. His accession to the office of the Prime Minister While physical infrastructure has been vetoed, the border would become an external frontier for the EU in the event of a no - deal Brexit .

Mr Power was heading up a major pre-Budget campaign by the Society of the Irish Motor Industry (SIMI) aimed at persuading the government to hold off on any changes to the VRT system for 2020 while tackling the avalanche of used imports.

But even allowing for a benign Budget-and-Brexit mix he is still forecasting a slide of 5,000/7,000 new-car registrations next year (to 105,000) – after a third-successive fall in 2019.

However, if there is no deal on Brexit and the Government goes ahead with VRT increases, he claims new-car sales could plummet to 70,000 next year.

That would be around 40,000 fewer than this year (down 7.8pc to 111,526 so far) and could lead to major job losses – 10,000/12,000 - across a beleaguered industry.

Warning that 12,000 motor industry jobs could be lost in event of no-deal Brexit and increase in Vehicle Registration Tax © Catalyst Images Britain's Prime Minister Boris Johnson gestures as he delivers his speech at the Convention of the North, in the Magna Centre in Rotherham, norhtern England on September 13, 2019. - Boris Johnson will meet EU chief Jean-Claude Juncker in Luxembourg on Monday, officials said, as the British prime minister bids to broker a Brexit compromise ahead of the October 31 deadline. Preparedness in Britain for a no-deal Brexit remains "at a low level", with logjams at Channel ports threatening to impact drug and food supplies, according to government assessments released this week. (Photo by Christopher Furlong / POOL / AFP) (Photo credit should read CHRISTOPHER FURLONG/AFP/Getty Images)

It is estimated that, apart from jobs being at risk and the threat to motor-related family businesses, the Government would lose €231m in tax revenue from fewer sales.

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“The mistakes of 2008 must be avoided,” said Mr Power. He was speaking about the dramatic and disruptive switch to an emissions’-based new-cars regime which left thousands of vehicles virtually worthless and threatened the existence of several dealerships.

With several representatives of leading manufacturers in attendance, he called for Budget taxation measures to focus on used imports which are up 5.9pc this year to 76,470. The new-car market is under pressure while imports are still growing strongly.

Mr Power said the government was losing out on thousands of euro for every import substituted for a new car. The average tax take for a new car (VRT, Vat) is €10,174 while that on a used import is €3,493. He said that: “Every 10,000 used imports displacing new car sales costs the Exchequer €66m.”

Apart from monetary concerns, there are fears we are importing older, ‘dirtier’ diesels in particular, with figures showing 64pc of imports are aged four years or more. New cars have to meet more stringent standards and are therefore less polluting than older vehicles. It is claimed as many as 250,000 used imports over recent years do not meet latest EU emissions standards.

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The leaders of Britain’s water industry would have to reapply for their jobs at drastically reduced salaries under In the unlikely event of no deal , UK hauliers could no longer rely on automatic recognition by the EU of UK-EU flights could cease in event of no - deal Brexit , says government.

Warning that 12,000 motor industry jobs could be lost in event of no-deal Brexit and increase in Vehicle Registration Tax Brian Cooke, SIMI

Mr Power pitched his figures against a backdrop of confusion on Brexit, fragile consumer confidence and a “more uncertain global outlook than for some time”.

While there has been strong export performance, the “personal sector” is still cautious, he says and there are few signs of overheating in economy.

He described framing Budget 2020 as “very tricky”, but emphasised how vital it is that there are no VRT increases in the Budget.

SIMI director general Brian Cooke said increased taxes in the Budget will only lead to a further reduction in new-car sales and potentially a further increase in used imports. “This is bad for the Exchequer, the consumer and for employment in the industry,” he said.

He called for the 1pc surcharge introduced in last year’s Budget on new and imported diesels to be replaced by a levy on older imports.

He said last year’s budget added €700 to price of new car and added that the simple message was: “Leave VRT alone.”

Paddy Magee, chairman SIMI vehicle distributors’ committee, said the industry wants to be part of a structured move towards having far more cleaner cars on our roadsm but wanted a level playing field to help do so.

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