The government has confirmed that in the event of a no-deal Brexit, a tariff of 10% will be applied to the import of cars from the EU.

The proposed measures would see the price of an average family car increase by £1,500, with car manufacturers set to pass the added costs directly onto the consumers. Earlier this month, Volkswagen confirmed that any tariffs would be passed onto customers via an increase in VW, Seat and Skoda car prices after 28 March 2019.

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A spokesperson for Ford UK told the BBC that the tariffs would “deal a devastating blow to much of the complex and integrated automotive industry, and would damage the competitiveness of Ford’s engine manufacturing in the UK”.

In a 1,477-page document, the government has outlined plans to provide some protection to the UK motor industry. For example, the import of car parts from the EU will remain tariff free. This is aimed at supporting manufacturers in the UK who depend on European supply chain connections.

Adam Marshall, director general of the British Chambers of Commerce, noted that there would be winners and losers across the UK industry overnight should the announced tariffs come into effect. “The abruptness of changes to tariff rates in the event of a no-deal exit from the EU would be an unwelcome shock to many of the businesses affected,” he said.

The House of Commons will vote later today on whether a no-deal Brexit could become a reality, following the rejection of the Prime Minister’s second Brexit deal on Tuesday.

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Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), stated that today’s announcement does not resolve the devastating effect a no-deal Brexit would have on the motor industry. “No policy on tariffs can come close to compensating for the disruption, cost and job losses that would result from ‘no deal’.”

“Every day ‘no deal’ remains a possibility is another day companies pay the price in expensive contingency measure. ‘No deal’ must be taken off the table immediately and permanently,” concluded Hawes.

The announcement follows a report released by the UK government last month that suggested there would be a 10% rise in the prices of cars for consumers in the event of a no-deal Brexit. The report stated that “although wider macroeconomic effects will influence how the sector is affected, low operating margins may mean that in many cases extra costs could be likely to be passed on to consumers at the showroom.”

Earlier this month, Motor Finance broke the story that VW is preparing to increase its pricing on VW, Skoda and Seat cars and finance leases should the UK leave the EU without a deal.  The car manufacturer said that any car that was arranged for sale and was in the UK by the 28th March 2019 would also have its price honoured.