Much of the commentary on Brexit has focused on the principle of free movement of people and money. Janet Smart explains why the free movement of materials is just as important.
There has been a lot of talk about the movement of people and money, but the free movement of materials and goods is just as important. I haven’t heard much talk about it, but I hope that it is a priority for the negotiators.
Consider the way the BMW Mini factory is organised here in Oxford. Trucks carrying parts for the cars arrive according to a strict schedule and sequence: they have twenty-minute time slots in which to make their deliveries. If trucks get held up at the channel due to extra checks or paperwork, they will miss their slots, undermining the whole foundation of just-in-time production that the factory is based on.
Before BMW took over the plant here, the previous owners, British Leyland, required suppliers (many of which were located near Oxford) to hold five weeks’ worth of stock at any time. That meant there were warehouses around Oxford holding stock – tyres, petrol tanks, body shells, etc. – quietly rusting, tying up land and space, and tying up capital.
If just-in-time production collapses because of Brexit, we’re going to go back to that. Maybe suppliers won’t have to hold stocks for five weeks; maybe it will just be a few days. But even without considering the possibility of additional tariffs, this holding of inventory and the uncertainty surrounding just-in-time production will create unwanted complexity and uncertainty.
You may think, well that’s all right: we’ll just move the production and materials here. But you have to consider that, for example, the wire loom for a mini is made in Romania. Each one is custom built; it requires skill, and specialised expertise. It will take time to build up that capability in this country; we won’t be able to find it easily or quickly.
In addition, think about materials for big projects. What about the steel needed to build HS2, the cabling, and gantries for signalling? Will we be able to make the supply chain for that available, and quickly? The implications are huge.
We worry about money, and we worry about people. But materials, goods, and the skills and knowledge that go into the specification of those materials, are equally important.