Formula 1 motor racing is a major industry in the United Kingdom, and it is kind of something we can brag about. Between 2005 and 2015 every single world champion (bar one) drove a car which was designed, engineered and built in Britain. The Mercedes driven by Lewis Hamilton this season is built in Brackley near Silverstone, its engine and hybrid system comes from Brixworth near Northampton. This is just the tip of the iceberg, the British motorsport industry leads the world, it directly employs tens of thousands of highly skilled people across as many as 4,500 companies (probably more) and brings many billions of pounds into the UK economy.
The technologies being pioneered in Formula 1 have seen fuel efficiency improvements to levels which just two years ago were thought to be science fiction. These are gains which will in the near future be applied to mass market road cars around the world reducing CO2 emissions and pollutants across the board and all of these innovations are British.
But all of this is now under serious and immediate threat. The motorsport industry in the UK could be decimated by Brexit. Brexit you see means a lot more than Brexit (a made up word which first appeared in 2012) it means a substantial change to many areas of life and industry. Right now due to the dithering and indecision of our current leadership nobody really knows what the impact of Brexit will be, but it seems pretty obvious that the EU will take a tough stance against the UK as a lesson to other nations such as France and the Netherlands which are also considering their own futures in the union.
It is distinctly possible (even likely) that post Brexit trade restrictions, import taxes, and restricted movement will be applied by the EU. This would have an immediate and drastic effect on the motorsport industry in the UK.
People such as Chris Aylett of the Motorsport Industry Association spend their entire life highlighting the great levels of engineering skill and innovation in the UK, especially in high performance engineering like motorsport He is quite right to do so, our SME’s have for years dominated the international racing scene, especially in Europe but it is too easy to be complacent about this.
Two decades ago you had Reynards, Lolas, G-Forces and Penskes all designed and built in the UK taking on the likes of Dallara, but now all of those British constructors have gone and the Italians dominate. At Le Mans this year of the 33 prototypes in the race only two had chassis made in the UK and both are ruled out for 2017.
The point here is that while many rave about the UK leadership in motorsport engineering it should not be overstated and it is not invulnerable. Yes right now it is the best as a single nation all round but Italy, France and Germany jointly are able to match that blow for blow.
It is particularly true for the component supply industry, take gearboxes for example, the two world market leaders in transmission design and construction are based in England, Xtrac (Thatcham) and Hewland (Maidenhead), but for every Xtrac there is a Sadev (French). The same is true for brakes, for every Alcon (Tamworth) there is a Brembo (Italian).
If export taxes and similar restrictions are applied to these British made products then teams will likely opt for the EU produced rival which is of the same or similar quality. Customs could become an issue too today shipping parts across the channel is no great issue but we could see crucial parts on a typical ‘I need it yesterday’ motorsport schedule, held up in customs at Dover, Heathrow, Calais or Frankfurt. Another reason for using EU produced components.
Some are pointing out that the Brexit induced crash in the value of the pound will actually improve exports as the UK made products are cheaper for those in the EU, USA and Japan to buy and while this is true the weak pound also makes it more expensive for the manufacturers of those products to buy in the raw materials they need to make the things they make, which can reduce the margins substantially.
Travel too is likely to be impacted, I already mentioned customs for components but it could now also become a factor for teams too, I can already picture the over zealous customs inspectors crawling around the back of team trucks at Dover or Calais demanding all the various cases are opened. Staff too could face a lot more time at airports and having to fill in a lot more landing cards and customs declarations. Will the 30 minute check in at Luton airport or St. Pancras still be possible – it is hard to say, all Mrs. May will tell us is that ‘Brexit means Brexit’. Helpful that.
Recruitment is already being hit, even before the Brexit vote there was a severe skills shortage in engineering, after the vote the crisis has only deepened. Over the years F1 teams and component suppliers have taken advantage of EU staff, especially skilled graduates, in great numbers. If restrictions on non British staff come into place, which they almost certainly will, then finding the right skills could become a major issue, reducing the UK skill level overall, and making it less attractive as a place to business. I can’t imagine the the Renault F1 team will stay in Enstone if it can’t recruit the right people, after all its owners would one suspect rather prefer the team to be based in Paris anyway and would not need much encouragement to move.
Quite what happens to existing staff is also unclear, every team in F1 has a huge mix of nationalities especially those from the EU, the boss of McLaren is a Frenchman, the technical director of Ferrari is an Englishman, come 2018/2019 will they need work permits? There could be compliance issues with the major manufacturers and organisations and there will certainly be tax implications.
This has already become an issue I’m told, if someone has a choice of jobs, as the skilled staff tend to, will an EU citizen choose to up sticks and work in the UK which they know will be leaving the Union in 2-3 years and that could mean that it could cause issues with continued employment? All the government tell them is that ‘Brexit means Brexit’.
This may all read like doom and gloom, to large extent it is. I voted to stay in and I am disappointed with the result but also not surprised. Now I know that some of the senior F1 types have said that they don’t forsee any issues but I think they are being either short sighted or doing an ostrich impression. The reality is that they have no clue what will happen, so are unable to predict their response.
Of course there is a solution to all of this, when Mrs. May and her cronies decide to work out what Brexit actually means, or rather get told by the EU what it means, we could have all the fact laid out in front of us (it is now abundantly clear that facts were in short supply ahead of the referendum). With those facts laid out in front of us we can then work out what Brexit means, and then we can vote on whether we should proceed.
But only one party in the UK is offering that logic as a solution despite that this stance is the only reasonable stance to take. This is why I have joined the Liberal Democrats, not for emotive reasons but for pragmatic ones. They are the party which will protect and fight for the UK motorsport industry, and they may well be able to force the reasonable outcome, namely a vote on whether to leave the EU once the exact details of what Brexit really means are known.
This is why in coming by-elections and local elections I urge those working in motorsport or other high performance engineering and technology industries to consider seriously voting Liberal Democrat and to get a fair informed say on the future.
Profile picture photo credit: Lawrence Butcher/High Power Media
* Sam Collins has been involved in top level motor racing since 1997, he is currently the Deputy Editor of Racecar Engineering, the world's leading journal of motorsport technology. He joined the Liberal Democrats in June following the EU referendum.
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30 Comments
As a massive F1 fan, this has been worrying me a lot. I know a fair few people in the area who work for various teams and the personal impact would be awful for them – but the wider dangers for the supply chain and the economy as a whole are very scary indeed.
This is very relevant to the Witney by-election so I hope that the team there are on it.
This is an interesting article, as it is just breaking that Apple are talking with McLaren at a potential buyout for $2 billion – Though there has been rumour & speculation for some time that Apple may be looking at producing a car, with the weakness of the £ they are saving around 14% had they looked at buying pre-Brexit!
“How Brexit will ruin the British motorsport industry”.
Given it’s carbon footprint, that’s the first time I’ve heard a really convincing argument for Brexit.
Is there any industry,business or organisation that is not going to crash & burn due to Brexit ?
@John: No, there isn’t. It really is a disaster.
@David Raw: Actually, the F1 industry is behind most of the developments that make mass-market cars greener so it does benefit the environment in some fairly major ways.
McLaren have released a statement saying that they are not in talks with Apple – Think this is good news, as would have been a pity if it had been the case!
I don’t understand the moral or strategic case behind saying the EU will give us some choices and we must accept one of them, no matter how bad they are. This is what you say when you write:
“when Mrs. May and her cronies decide to work out what Brexit actually means, or rather get told by the EU what it means” and talk about disaster.
It honestly makes me feel more pessimistic about humanity and even more so for the party.
@Caron
Quite apart from the damage done to the environment, the motor sport industry also encourages behaviours that kill and maim countless thousands of innocent people, so I don’t see it as anything for the UK to be proud of at all. I find it odd that we demonise other aspects of our culture that cause vastly less harm – from soft drugs to thin models – while continuing to put fast cars on a pedestal.
it seems pretty obvious that the EU will take a tough stance against the UK as a lesson to other nations such as France and the Netherlands which are also considering their own futures in the union.
In other words, the EU is not a club where nations come together for mutual benefit, but a protection racket that needs to threaten its members to stop them leaving?
Good thing we’re getting out.
I don’t understand the moral or strategic case behind saying the EU will give us some choices and we must accept one of them, no matter how bad they are
Some people really do seem to believe that we deserve to be punished for voting the ‘wrong’ way.
Is it just me or is there a very strong suggestion of crossing your fingers and hoping for the worst creeping into the remain camp as the sky keeps failing to fall in.? Sort, of chin up, stiff upper lib, lads don’t worry it will all get worse, the mighty commissioners will punish us all and then who’ll laughing?
Yes Glenn, it’s just you. What sort of idiots do you think we are? I believe that the consequences of Brexit are going to be disastrous for this country, but I’ve got children and grandchildren. Do you think I am hoping for the worst from Brexit so that I can say “I told you so” to people like you, or do you think that perhaps I might be hoping against hope that I might be wrong about what I think the future is going to be so that my family doesn’t have to suffer the hardship that I fear will befall my country?
Tony Hill.
Belief and fear are not facts. So really you’re just speculating.
Personally, I suspect people will get used to it and like most things the results will be much less dramatic than either side is projecting.
Really. all I was commenting on was the excitable doom saying tendency of remain. To me what is really coming over is a lack of direction from progressive politics because it’s kind of accepted neo-liberal economics and adopted a sort of vague internationalism mingled with identity politics above the idea that you can have decent services and a nice standard of living or wealth redistribution. To me the EU was part of the problem.
all this: a conjecture that the effect might happen
please provide your evidence
All very depressing I’m afraid, but completely predictable. Clearly some high tech industries are going to be first in the firing line, but the ripples will begin to be felt by many sectors, particularly were there is strong competitive European companies.
@Caron Lindsay “As a massive F1 fan, this has been worrying me a lot.”
If it’s any consolation, Bernie Ecclestone seems happy with Brexit:
(http://www.planetf1.com/news/brexit-vote-wont-hurt-f1-says-ecclestonebrexit-vote-wont-hurt-f1-says-ecclestone/)
@Peter Watson: As an F1 fan, it pleases me that Bernie Ecclestone has a different opinion to my own.
🙂
Whilst there is a lot of doom and gloom and conjecture, we only need to look at the mid to late 1990’s to see the historical basis to give some credibility to such viewpoints.
Then the beneficiary of the UK’s lukewarm attitude to the EU and Westminster’s inability to act decisively, was Ireland; albeit assisted by large amounts of EU regional development funding and as we now know highly favourable offshore taxation arrangements. Hence why today so many IT companies have both their European HQ and substantial graduate workforces in Ireland…
Naturally, this wasn’t really seen by many in the UK, because the UK domestic economy was seemingly booming. However, from the amount of time I spent in Ireland, it was obvious that the UK’s problem was that it was too inward looking and enjoying its slight economic edge over continental Europe to see that it was missing out on the long-term prosperity…
My main complaint with Sam’s article is that he should have deleted everything after the paragraph starting “This may all read like doom and gloom…” and used the word allowance instead to better develop his case study on the motorsport industry in Britain (note the different emphasis), because it is only by looking in detail at an industry can we begin to see those small effects that the national media miss and their cumulative effect: In the 70’s to early 80’s we saw the transition from having a British motor industry to having a motor industry in Britain.
and as we now know highly favourable offshore taxation arrangements
And how attractive will Ireland be for those HQs if the EU manages to overrule Ireland’s elected government and dictate its tax policy, as it is trying to do?
@Tim – The EU isn’t trying to overrule the Irish government, merely pointing out that it has failed to apply its existing tax legislation and the undertakings it made as a member of the EU…
However, when the Irish government does honour its undertakings and applies its tax laws, I suspect few companies will actually move out of Ireland, although the monies may be routed differently. This is because Ireland will still be within the EU and hence able to provide all the benefits of membership such as direct access to the single market, representation in the important forums and the ears of the people who control the single market. With Brexit, the UK may regain access to the single market, but it will lose access to the ears and its ability to influence…
So many comments – great stuff. If you read the version on http://www.racecar-engineering.com it also contains suggestions about a way forward for the UK industry in Brexit actually happens – but for a wider audience I removed the details about the NGTC regs in BTCC and Japan F4. So while I’m trying not to be a doom monger, the UK high performance industry needs to have a reality check. Brexit is going to savage our skills, our capability and our export viability, so we either need to prevent Brexit, or plan to ride out the storm, but I’m certain not everyone will make it.
Talk yesterday of limiting EU immigration to 30K p/a is deeply worrying. That is not enough alone to cover defence, motorsport, bio-tech, digital tech, aviation and space let alone every other industry. Just as a point the only F1 teams based in the UK with a non UK EU citizen in one of the top three management roles are Williams, and Manor… though at the latter all the main lead engineering posts bar two are held by EU immigrants…
This is Project Fear, which had a negative effect on the referendums in Scotland and the EU. Please drop it for the Witney campaign. It is fine as lobbying for the industry with the UK government.
When Bernie Ecclestone walked up Downing Street to see Tony Blair most of the F1 races were in the EU and it mattered that the EU was trying to discourage smoking. Bernie is not an obvious socialist () and the Labour Party returned his million pounds as Tony Blair noted in his book “A Journey” ISBN 2 4 6 8 10 9 7 5 3 1 Hutchinson 2010 page 129.
Tony Blair notes that Bernie had also donated money to the Tories.
Please also note the F! Calendar remaining this year
Malaysia 30 Sep
USA 21 Oct
Mexico 28 Oct
Brazil 11 Nov
Abu Dhabi 25 Nov
None of these countries are members of the EU single market. F1 cars fly.
@ Tim,
I’d copied the exact same quote for comment as yourself!
I’d have to accept that there were good arguments for staying in the EU but intimidations and threats towards any country, whether they are thinking of leaving like the UK, or whether like Greece they aren’t, can’t count as good arguments!
Loveless marriages are usually much worse than amicable divorces. Staying together for fear of what a wronged partner might do in revenge can’t be a desirable choice.
@Richard Underhill
“…Please also note the F! Calendar remaining this year
…
None of these countries are members of the EU single market. F1 cars fly.”
Not sure of your point here, other than motorsports is an industry of two sides: the teams and their supply chains and the sports events and its associated sales and distribution networks.
The UK has been successful in attracting the teams and creating a ‘local’ centre of excellence so has a motorsports industry; something successive governments have been trying to do in other sectors: Silicon roundabout, driverless cars to name two current ventures. The main spin-off from this is graduate jobs and inward investment into the UK, benefiting our balance of trade on our otherwise rather poor export performance… The sports event itself has been highly profitable, for some (the Silverstone circuit for example isn’t rolling in cash like Bernie is), but it is less clear just how much of the revenues from TV rights and staging the events you list, directly benefit the UK; particularly given the ownership structure and use of off-shore company registrations of the Formula One Group and its investors.
So I suggest the challenge which we’ve effectively increasingly had since the late 1970’s isn’t so much the saving of “Brtish industry” but making the UK an attractive place for lucrative portions of global business supply chains to be based. I’ve yet to see an argument that stands up to scrutiny for how Leaving the EU is going to help us in this challenge…
@Peter Watson. The point you miss is that Bernie Ecclestone is just the ring master.
He doesn’t care where the performers come from, he just wants the maximum viewers for his circus.
In fact it might be good for him to have another stable producing runners. UAE or China might well be willing to cooperate in relocating teams out of the U.K.
@Richard Underhill
This is not project fear. It is reality.
What Sam Collins does not mention is the threat to the wider Automotive industry in the UK. Inward investment since we Joined the EU has rebuilt this sector from the pathetic British Leyland of the seventies into world class competitors responsible for 12% of UK exports, employing over 800,000 people in 30 plants with a £72billion turnover.
Brexit threatens the integrity of the EU wide supply chains that keep this industry going.
Tariffs could affect profitability , customs issues and delays would be worse disrupting the just-in-time flow of parts, in Car plants downtime costs £10,000 per MINUTE ! So you can see why they would be worried. At present they can treat the whole EU as just one country, post Brexit UK they can’t do that, so it will be a large negative factor.
Already the straws are in the wind, Ford look unlikely to build their new fuel efficient Engine plant in Bridgend. They will certainly invest the £500m+ elsewhere in the EU to feed their car plants in Bruges and Spain.
All of our foreign owned multinationals will now be reconsidering where to make their next investments, soft Brexit will be a negative, hard Brexit will be very negative in their calculations, at the moment they can only assume the worst.
The Japanese government and companies made their views on this abundantly clear in a formal letter to the UK government.
The wind down in investment won’t affect the UK economy in the short term, devaluation of sterling may well have helped UK automotive to a 14 year record exports last month. This is not a vote of confidence in Brexit, rather it is the fruits of multi billion investment over the past few years.
But to quote the SMMT , “Future success depends on continued investment in plant and products and that in turn depends on the UK maintaining internationally competitive business and trading conditions.” These are what are threatened by Brexit.
In politics “You do not get much for second” (under First Past The Post).
In Formula 1 a team can have a one-two finish, as in Malaysia, as in tomorrow’s adverts.
Roland: F1 cars used to go round Europe on huge trucks, now they fly around the world.
Simon-croft: Please note todays news, the PM is repealing the 1972 Act (not Article 50).