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German businesses reluctant to invest in UK over Brexit uncertainty

German business leaders have issued a strongly worded statement warning they are reluctant to invest in Britain because of Brexit uncertainty.

The intervention from German Industry UK (GIUK), which represents firms including carmakers BMW and Mercedes-Benz as well as the Lufthansa airline, came as the UK’s largest carmaker, Jaguar Land Rover (JLR), said a bad Brexit deal would put £80bn of investment and 40,000 jobs at risk.

Amid mounting anxiety from some of the UK’s largest manufacturers, politicians from both sides of the House of Commons lined up to criticise the government’s attitude towards business concerns during Brexit negotiations.

The Liberal Democrat leader, Vince Cable, accused the government of treating major employers with “complete contempt” by failing to listen to their concerns. Cable said he knew JLR boss Ralf Speth from his tenure as business secretary and that the German boss of the carmaker was “not bluffing” when he said on Wednesday that the firm’s place in the UK would be untenable in the event of a hard Brexit.

The shadow business secretary, Rebecca Long-Bailey, warned that Tory infighting over the nature of the UK’s departure from the European Union was putting jobs and investment at risk.

“They cannot continue to spar with each other and play ideological games whilst British jobs and industries are being pushed off the edge of a cliff,” she said.

The cabinet is due to meet at Chequers on Friday in an effort to thrash out disagreements among ministers about the right Brexit plan to pursue.

Just 24 hours before the summit, representatives of German firms employing 400,000 people in the UK joined JLR in issuing a dire warning about the impact of ongoing uncertainty. GIUK, whose members also include the train and bus operator Arriva – owned by the Germany’s state-owned rail company – and the steel producer ThyssenKrupp, said it needed “certainty and clarity about the way forward sooner rather than later”.

Bernd Atenstaedt, the chairman and chief executive of GIUK, said: “There is some reluctance from German business to invest in the UK with projects on hold because of the uncertainty about the future and, with only nine months left before the UK leaves the EU, time is running out.”

GIUK said German business would like continued free access without tariff and non-tariff barriers – such as customs checks – for exports to the UK, plus continued free access to the EU for exports from the UK, which is one of Germany’s most important export markets.

Atenstaedt told the Guardian that many GIUK members would not go as far as aerospace company Airbus, which has threatened to cut back their operations in the UK in the event of a hard Brexit.

JLR, the UK’s largest automotive business, this week became the latest manufacturing powerhouse to say it could be forced to withdraw investment from Britain in the event of a hard Brexit.

The warning sparked renewed criticism of the government’s attitude to industry, just days after the foreign secretary, Boris Johnson, was reported to have said “fuck business” when asked about employers’ Brexit concerns.

Cable said: “I got to know Ralf Speth well enough to know that he’s not bluffing when he says JLR’s position is that a hard Brexit would make the company’s position in the UK untenable.

“The Conservatives should listen. But there’s no evidence that they are willing to treat major employers with anything other than complete contempt.”

A spokesperson for the prime minister said the government took the views of the business community seriously. The spokesperson added: “We also know the importance of providing certainty as we leave the EU. We’re looking forward to providing further details in the white paper. But I would also make the point that we have already successfully negotiated an implementation period, so firms will be able to trade on the same terms as now until the end of 2020.”

Conservative MP Owen Paterson attracted criticism after brushing off JLR’s concerns in an appearance on the Radio 4 Today programme, claiming the company would be in a “wonderful position” and could buy car parts more cheaply.

Labour MP Alison McGovern, whose Wirral South constituency includes Vauxhall’s Ellesmere Port plant, said Paterson did not understand the automotive industry, particularly its use of “just-in-time” supply chains that require precision timing.

“It is quite stunning that Owen Paterson thinks himself better placed to comment on Jaguar Land Rover’s future than their own CEO. Perhaps even more striking is his obvious total ignorance of the just-in-time supply chains which make the car industry profitable and the fact that it is not tariffs but non-tariff barriers which would be the major obstacle to manufacturers in a no-deal Brexit.

“People in manufacturing towns across Merseyside, the north and the Midlands know all too well what it feels like when Tories show they just don’t care about our communities and our families’ livelihoods and they will not stand for it.”

A senior figure at one manufacturing trade body with strong ties to the automotive sector said: “I don’t think we’d dignify Owen Paterson’s remarks with a response because they’re not worth anything.”

Maria Eagle, whose Garston and Halewood constituency includes JLR’s Halewood plant, said the company was rightly concerned about the “appalling effects of the extreme Tory hard Brexit supported by half the cabinet and a hard-line cabal of Brexit extremists”.

She said: “It’s about time this appalling government put the interests of the people of this country above their own manoeuvring to stay in office. Otherwise, our manufacturing industry faces total destruction.”

The EEF manufacturers’ trade body said: “This is not just an issue for big companies, however, but those SMEs who are also heavily exposed in the major supply chains and, as yet, are unable to know what scenario they are planning for. Time is now running out to secure the frictionless and tariff-free relationship we need with the EU if there are not to be serious consequences right across UK industry.”

Meanwhile, a survey by Scottish Engineering has found that just 1% of its members were positive about Brexit. Its chief executive, Paul Sheerin, said the organisation was worried about “a deeply concerning stance to business coming from parts of the UK government”.

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Foreign businesses to UK: solve Brexit or risk £100bn in trade

Business leaders from the US, Canada, Japan and India have told the British government to solve the Brexit issue urgently or put more than £100bn worth of trade at risk.

Lobby groups representing business interests from the four countries took the unusual step of issuing a joint statement on Brexit before the European council summit this week. It came days after Airbus said its investment in the UK would be at risk from a hard Brexit, prompting the health secretary, Jeremy Hunt, to say the Franco-German aircraft maker’s intervention was “completely inappropriate”.

Groups representing corporate giants including Nissan, Bombardier and Facebook expressed their concerns on Monday that Britain was heading towards a disorderly departure from the EU, potentially affecting more than £100bn in trade and putting investment in the UK at risk.

“International businesses who are heavily invested in both the EU and the UK are calling for urgent progress on the key outstanding issues remaining in the talks,” they said in the statement. “Resolving as many of the remaining concerns as possible is becoming more urgent by the day – with the clock ticking towards the October deadline for a final withdrawal agreement.”

The statement was signed by the American Chamber of Commerce to the EU, representing companies including Boeing, Exxon Mobile, Facebook, Dell, Coca-Cola and FedEx. It was also signed by the Canada Europe Roundtable for Business, Europe India Chamber of Commerce and the Japan Business Council in Europe.

The statement said they recognised the complexity of finding a solution for the Irish border, but urged both the EU and the UK to continue to try to find agreement on the issue.

In the meantime, they urged policymakers to “dedicate time and thought at the upcoming summit” to address the remaining issues, including the role of the European court of justice, the future UK-EU regulatory regime and post-Brexit preparedness.

“Reaching agreement on these issues will provide businesses with more confidence that a withdrawal agreement can be agreed and ratified, thereby providing legal certainty for the proposed transition period and avoiding the worst-case ‘cliff-edge’ scenario in March 2019 ,” the statement said.

It reflects a growing frustration in business over the lack of a clear Brexit strategy two years after the referendum.

In the wake of the Airbus comments, BMW said it needed clarity on Brexit negotiations “in the next couple of months”. Car manufacturers are expected to issue a fresh and strong warning over Brexit at a Society of Motor Manufacturing and Traders (SMMT) meeting on Tuesday.

The car industry employs more than 800,000 people in the UK and the Japanese ambassador has warned Theresa May that his country’s firms will quit Britain if a botched Brexit makes it unprofitable to stay.

Koji Tsuruoka told the prime minister earlier this year that if “there is no profitability of continuing operation in [the] UK … no private company can continue operations”.

Both he and the outgoing boss of BMW will speak at the SMMT conference.

Japan’s business interests in the UK include Nissan, Mitsubishi, Panasonic and Honda, with trade with the UK worth £46bn. Nissan, Toyota and Honda began their UK operations in Britain in the 1980s and now build nearly half of all of the 1.7m cars produced in the UK last year.

The car industry is concerned that if the UK does not stay in the single market, it will be hit by costly delays in delivering components from the EU.

America’s import and export trade with the UK is worth around £43bn but it is also a heavy investor in business with a large presence in the UK in tech, pharmaceuticals and transport.

Canada’s business interests in the UK include the Bombardier aircraft wing factory in Belfast, which was recently saved from making thousands of redundancies after winning a legal challenge in a trade dispute with US rival Boeing and the Trump administration.

The UK ranks as Canada’s second most important trading partner after the US with bilateral trade worth CN$27.1bn (£15bn). India’s exports to the UK are valued at around $9bn (£6.79bn) with machinery and clothing among the highest value products.

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Post-Brexit trade: business leaders tell May time is running out

Leading European industrialists, including bosses from BP, Nestlé, E.ON and Royal Mail, have warned Theresa May that time is running out and said businesses want post-Brexit trade with the EU to be as frictionless as with a customs union.

At a private meeting in Downing Street with the prime minister and the Brexit secretary, David Davis, senior business figures from the European Round Table of Industrialists (ERT) warned that “uncertainty causes less investment”.

May has only committed to ensuring “trade at the UK-EU border should be as frictionless as possible”, a phrase repeated by a Downing Street spokesman after the meeting.

In a joint statement, the business leaders said they had expressed their concerns to May and warned there was an urgent need for clarity.

“The uninterrupted flow of goods is essential to both the EU and UK economies,” the statement said. “This must be frictionless as with a customs union. We need clarity and certainty, because time is running out. Uncertainty causes less investment.”

No 10 said the meeting had been an “open and productive discussion” and dialogue would continue. A spokesman said May “underlined the importance of ensuring that our future trading arrangements with the EU are as frictionless as possible”, adding that the future economic partnership would go “beyond existing models”.

The meeting was attended by senior members of British and other European businesses, including Carl-Henric Svanberg, chairman of BP, Vittorio Colao, Vodafone’s outgoing chief executive, Paul Bulcke, chairman of Nestlé, and Moya Greene, the outgoing chief executive of Royal Mail.

Others attended from firms including BMW, the aluminium company Norsk Hydro, the French multinational Capgemini and the energy company Iberdrola, which owns ScottishPower. More than 50 firms are members of the ERT, with combined revenues of more than £1.97tn and 6.8 million employees in Europe.

Downing Street said May “recognised the necessity of providing certainty for businesses”, pointing to the agreement of a transition period at the European council in March. May and Davis also discussed the future of regulatory standards, after a presentation by the Brexit secretary on the progress of the talks.

May appeared to win some backing for her bid for a bespoke deal on data-sharing laws after Brexit. Downing Street said there was “consensus” in the room that a robust agreement on data-sharing was “vital to our future economic and security relationship with the EU”.

In a presentation to the EU negotiating team last week, UK officials asked for the Information Commissioner’s Office to have a seat on the body that applies data laws to companies, with preferential treatment over other non-EU countries after Brexit.

But the EU’s chief negotiator, Michel Barnier, said in a speech that such privileged access was impossible and would impact on the EU’s ability to make its own decisions.

“We cannot, we will not be able to share this decisional autonomy with a third country, undoubtedly a former member state but which no longer wants to be in the same legal ecosystem as us,” he said.

New report says hydrogen can meet 18 per cent of energy demand by 2050

A new study has detailed how hydrogen energy can make up around one-fifth of the total energy mix by 2050, helping to keep global warming below two degrees Celsius.

The report was commissioned by the Hydrogen Council, a coalition formed earlier this year featuring the CEOs of automotive and energy giants including Shell, Air Liquide, General Motors, Statoil, BMW and Toyota. Entitled Hydrogen, Scaling up, it provides a roadmap for the expansion of the sector. By 2030, 10 to 15 million cars and 500,000 trucks could be hydrogen-powered. Overall, total demand could increase tenfold to almost 80EJ (around 22,000TWh) by 2050, according to the study.

Seven particular areas were identified by the council where hydrogen energy can play a key role:

– Enabling large-scale renewable energy integration and power generation
– Distributing energy across sectors and regions
– Acting as a buffer to increase energy system resilience
– Decarbonising transportation
– Decarbonising industrial energy use
– Helping to decarbonise building heat and power
– Providing clean feedstock for industry

“The world in the 21st century must transition to widespread low carbon energy use,” said Takeshi Uchiyamada, chairman of Toyota Motor Corporation and co-chair of the Hydrogen Council.

“Hydrogen is an indispensable resource to achieve this transition because it can be used to store and transport wind, solar and other renewable electricity to power transportation and many other things. The Council has identified seven roles for hydrogen, which is why we are encouraging governments and investors to give it a prominent role in their energy plans. The sooner we get the hydrogen economy going, the better, and we are all committed to making this a reality.”

Investment of between $20-25bn per year up until 2030 will be required to scale the industry to the level outlined in the report. However, it is pointed out that there is currently around US$1.7 trillion invested in energy each year, including $650bn in oil and gas. The report also claims that the hydrogen sector has the potential to develop $2.5 trillion of business, creating more than 30 million jobs by 2050.

By reaching 18 per cent of the energy mix mid-century, it is estimated that six gigatons of CO2 would be reduced each year compared to today’s levels. This would meet 20 per cent of the total reductions required in the 2050 two-degree scenario.

“This study confirms the place of hydrogen as a central pillar in the energy transition, and encourages us in our support of its large-scale deployment” said Benoît Potier, chairman and CEO of Air Liquide.

“Hydrogen will be an unavoidable enabler for the energy transition in certain sectors and geographies. The sooner we make this happen the sooner we will be able to enjoy the needed benefits of hydrogen at the service of our economies and our societies.”