UK voters face a choice that will shape a generation when they head to the polls on Thursday 23 June and decide on Britain’s membership of the EU.
The European referendum was promised by Prime Minister David Cameron as part of his 2015 General Election manifesto, and it represents the first time the public has had a say on Britain in the EU since 1975.
So with a date set voters must decide to stay in or opt out by answering the not-so-simple question: Should the United Kingdom remain a member of the European Union?
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Much has been written about the pros and cons of EU membership, and the motor industry itself has nailed its colours firmly to the mast of staying put, with the Society of Motor Manufacturers and Traders (SMMT) revealing three-quarters of its members wanted a ‘remain’ outcome – with none of those choosing ‘out’ being large manufacturers.
But what about the motorist? Auto Express has pulled together European referendum facts and expert insight on how a Brexit decision might affect motoring for the everyday driver, in 10 key areas from fuel prices to insurance premiums, and used car values to emissions.
EU In or EU out? What each side says
Britain Stronger In Europe
Stronger in Europe is the official campaign leader for the ‘remain’ vote. Auto Express asked its views on what staying in the EU would mean for motoring.
“Leaving the EU, and the single market of 500 million people, would be disastrous for the British car industry, risking jobs, threatening exports and hitting consumers. The significance of our membership is undeniable: UK-to-EU car exports were worth £11.8bn in 2014 and 40 per cent of cars made here were exported to the EU, while over 730,000 UK jobs depend on the motoring industry.
Manufacturers including Ford, Audi, BMW, Mercedes, Hyundai, Peugeot-Citroen, Honda, Toyota, Kia and Nissan have all warned against leaving, while the AA says petrol prices could soar by almost 19p a litre. All this is in addition to Treasury predictions that leaving would damage our economy to the tune of £4,300 for each household. It’s clear that leaving is a risk we cannot afford to take”
Vote Leave
The official campaign for leaving the EU is backed by former London Mayor Boris Johnson. Vote Leave told Auto Express why motoring would benefit from Brexit.
“Leading car manufacturers such as Honda, Toyota and Nissan have made it clear they will continue to invest in the UK after we Vote Leave. They are attracted by our highly skilled workforce, strong legal system and business-friendly environment – all qualities we will continue to have outside the EU. But what would be different is that leaving the EU means we could take back control of our trade policy – to ensure that car manufacturers can trade freely with the growing economies of the world.
And let’s not forget, the EU is no fan of motorists – the unelected EU judges decided to impose increased insurance premiums for female drivers. When we take back control on Thursday 23 June, we can reverse this ruling and lower costs for motorists.”
EU Referendum: the 10 key areas affected
Insurance
The prospect of leaving the EU has put the insurance industry on edge, with uncertainty on what laws would apply and the potential inability of non-UK insurers to operate, increasing prices from providers based here.
Graeme Trudgill, executive director at the British Insurance Brokers’ Association, said it was unclear if the Motor Insurance Directive would still apply in the UK.
The directive dictates a minimum level of insurance protection in every EU country. If the UK was no longer bound by it, there would be requirements for extra cover when travelling abroad.
Much of the UK motor insurance market originates from Gibraltar, too, so competition could be reduced, with insurers based abroad unable to “passport” into the UK from the EU. This could lead to higher premiums.
Trade
UK car production and subsequent exports are riding the crest of a wave, and it’s one of the biggest concerns that car manufacturers face if we were to pull out of the European Union.
Since 2013, £8billion has been allocated to automotive operations as the UK takes advantage of being part of the largest single market in the world.
Around 160,000 people are employed in British automotive manufacturing alone, with more than 80 per cent of UK vehicles exported to over 100 countries – half to the EU. The supply chain for parts and materials is also dependent on the EU, with 63 per cent of UK supply spend sourced abroad.
Disruption to this trading line is of great concern to many in the industry, and explains why big manufacturers and SMMT members are against leaving.
For the consumer, the EU single market means there are 350 different vehicle ranges available in the UK – over three- quarters of new cars registered in the UK in 2014 were imported from Europe.
Car prices
Despite possible disruption to business and supply lines, experts don’t actually expect buyers to have to pay more for vehicles if the UK exits the EU.
The used car market in particular is largely expected to be unaffected, according to Philip Nothard, CAP HPI consumer and retail editor, regardless of the referendum outcome.
Price guide expert Glass’s admitted it’s hard to predict what may happen to new car prices, though, as there’s no precedent to compare with – especially for longer-term impact.
Uncertainty over what may happen to the overall economy is the only real threat to costs, with dealers tweaking prices in the short term to protect against any economic slowdown.
Travelling abroad
Travel body ABTA said foreign travel could become more expensive if the UK leaves, with new taxes on travel businesses also hiking prices. But it’s unlikely travel would be too tough for Brits as UK holidaymakers spent almost £20billion in EU countries in 2014 – many of them as motorists.
The UK is already outside the Schengen Area where people can move freely without passports, but if we leave, new terms would have to be negotiated, and drivers may need their passports stamped at border crossings.
There’s also the EU Package Travel Directive, which protects against issues such as a package holiday organiser going bust. Leaving the EU would nullify this, but the UK has its own ATOL scheme which already operates above EU legislation.
Breakdowns
This week, the RAC has launched its new comprehensive European breakdown cover, offering protection in 48 countries for nine passengers and up to £1,000 towards garage labour costs. Luckily, it doesn’t expect EU-wide breakdown cover to be affected if the UK should leave.
The AA backs that up, too. A spokesman told us: “We don’t anticipate the EU referendum will affect breakdown services. The European motoring organisations have long worked closely together to deal with breakdowns in each other’s countries.”
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Driving abroad
It’s unlikely licensing will be hugely affected for those travelling abroad, as bilateral agreements already exist for a host of countries outside the EU.
This means that a UK licence is still valid to drive on for a year before it needs to be exchanged. Even with those countries not in the agreement, you can still drive on your licence for a year, but then you have to take a new test.
The only issue with UK driving licences in the EU referendum is for UK nationals living abroad.
Currently, they don’t need to exchange their driving licence at all, but if we exit, they’ll have to exchange it after 12 months and apply for a new one, just like with non-EU countries.
Emissions
Although emissions are governed by EU legislation, it’s not true that we’d be free to have our own rules if we left.
Regulations should remain unchanged as UK makers will still have to meet EU rules to sell in Europe, while we’ll have to accept cars complying with EU rules to drive here.
Car makers on the continent wouldn’t want to adapt vehicles to meet different UK requirements, either – and if they were forced to, purchase prices would rocket.
Greg Archer, clean vehicles manager at campaign group Transport & Environment, added: “If we leave, we will have no say over the regulations. The UK negotiated an exception for Jaguar Land Rover from fuel efficiency requirements – this wouldn’t happen in the future. We are either in the EU influencing the rules; or outside accepting a system designed by others.”
Fuel prices
Petrol and diesel prices may not be affected as much as motorists may expect, according to both the AA and RAC. Both organisations agree that it would likely add between 2p and 4p a litre, and this is merely based on the expected weakening of the pound following a decision to leave.
The AA explained the price of fuel is, to some degree, dependent on the sterling and US dollar exchange rate. Both oil and fuel in commodity markets are traded in dollars.
At the moment, a tonne of petrol coming into the UK costs around $500. With the pound currently worth $1.44, the cost of petrol translates into 26.2p a litre. If the outcome of the referendum weakens the pound by 10 cents to $1.34, the cost of petrol translates into 28.2p a litre – 2p a litre more expensive than now.
On the other hand, if the pound were to strengthen by the same amount following a vote, we’d be paying 2p a litre less.
The RAC supported the link between fuel prices and the exchange rate, and added that the greater influence remains the oil price, which will be unaffected by the vote.
Jobs
There’s a well documented skills gap in the UK, and although millions of pounds are being poured into domestic training, homegrown talent needs supplementing.
Being part of the EU means experts and specialists can be brought in to help the UK remain at the forefront of car manufacturing.
The SMMT said the free movement of workers in the EU is vital to spreading best practice, and broadening expertise and opportunity for UK engineers in collaborative EU automotive projects.
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One of the main concerns for those backing a Brexit is the claim that EU migrants take jobs from UK workers.
But this is disputed by pro-EU companies who say leaving the EU would stifle business investment in the UK, and in itself, reduce the number of jobs available for British employees.
Safety
The UK sees itself at the forefront of road safety, battling over many years to bring down the number of people killed or seriously injured on our roads.
Part of that is to make cars as safe as they can be via Euro NCAP safety tests and ratings, and despite its name, this wouldn’t change if the UK votes out.
There’s nothing in the constitution that restricts Euro NCAP to EU members, while the word Euro purely identifies a geographical area. Most current UK vehicle safety regulations are based on the Geneva Convention on Road Traffic, and many countries not connected to the EU are still signed up. Vehicle type approval is already country specific to comply with our own Road Traffic Act, too.
One area of concern for the Brexit is the loss of the European Block Exemption ruling, which allows owners to get cars serviced outside of the main dealer network without voiding a warranty.
Thatcham Research chief executive Peter Shaw said: “There is a view that any loss of the European Block Exemption rulings could reduce dealer competition, with parts’ costs potentially increasing. Unfortunately, when price pressure is brought to the new car buying decision, it’s often the safety options that are discarded first.”
Brexit or Bremain? Your key EU questions answered
When is the vote?
The referendum takes place on Thursday 23 June.
Who can vote?
British, Irish and Commonwealth citizens over 18 who are a resident in the UK, along with UK nationals living abroad who have been on the electoral register in the UK in the past 15 years can vote. Members of the House of Lords and Commonwealth citizens in Gibraltar will also be eligible, unlike in a general election. Citizens from EU countries will get a vote, other than those from Ireland, Malta and Cyprus.
How do you vote?
It’ll be similar to other elections. If you have registered to vote, you’ll be sent a polling card telling you when voting takes place and where you should go to vote on 23 June. Alternatively you will also be able to opt to vote by post. You simply mark an X in the relevant box on your ballot paper and submit it.
Do I have to register to vote in the referendum?
If you are a British, Irish or Commonwealth citizen on the electoral register, you will already be able to vote. If you’re not yet registered, you have until midnight on Tuesday 7 June to submit an application for a vote. The deadlines for applying for a postal vote are 5pm on Friday 3 June in Northern Ireland and 5pm on Wednesday 8 June for the rest of Great Britain.
Will it just be a case of adding up the Stay and Leave votes?
Votes will be counted and added up, with a straight majority needed to provide the result. There is no minimum turnout needed for a vote to be valid.
When and how will the results be announced?
Counting will start when polls close at 10pm on Thursday 23 June, at 382 local centres around the UK. These local results will be declared as the counts are completed before being collated at 12 regional centres, which will also declare the totals. A chief counting officer will then announce the overall result at Manchester Town Hall.
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