Government facing growing pressure to protect Nissan from effects of Brexit

Theresa May’s Government is under growing pressure to ensure motor manufacturing in the North East is protected as the UK leaves the European Union.

North East MPs highlighted the need to ensure vehicles manufactured at the Nissan plant in Sunderland can be sold in the EU.

And former Chancellor George Osborne said the Government must “focus on” protecting car manufacturing as Brexit takes place.

It follows a warning from Carlos Ghosn, Nissan’s chief executive, that the Japanese car giant would put investment on hold until the British Government pledges to reimburse the firm for extra costs it incurs.

British car exporters could face tariffs of up to 10% if the UK fails to conclude a free trade deal with the rest of the EU and is forced to fall back on basic World Trade Organisation rules.

Mr Osborne told a meeting of the Commons Business Committee: “We have got to make, this Government, this Parliament, has got to make the UK the place to make cars in Europe, as it has been over recent years.”

He added: “We are a European base for car manufacturing and famously produce more cars out of that plant in Sunderland than the whole of Italy does.

“That’s got to be part of something we focus on in the coming years and overcome the challenges that present us.”

Brexit Secretary David Davis makes a statement in the House of Commons

Separately, Sunderland Central MP Julie Elliott asked Brexit Secretary David Davis for details of the Government plans, saying: “When will the Secretary of State reassure businesses based in the UK, and particularly in my city of Sunderland, including the Nissan manufacturing plant, about the potential for tariffs to be paid on every car sold to mainland Europe, as some 80% of cars from the Nissan plant are?

“Investment has been halted at that plant, and a contract that had already been awarded has been put in abeyance while ​we wait for reassurances from the Government. When will the Government act on real people’s jobs and reassure companies?

“That is what is at stake. This is not chatter; it is real people’s jobs. When will the Government act?”

But Mr Davis was unable to provide any specifics in his reply, telling her: “We have said in terms – principally after the Japanese letter – that we are absolutely determined to make sure that we guarantee, or acquire, access for all companies in the UK to the maximum possible number of markets. That is what we are doing.”

MPs have also raised concerns about the Government’s apparent plans to invoke Article 50 of the Lisbon Treaty, the formal mechanism for leaving the EU, without a Commons vote.

Bishop Auckland MP Helen Goodman described the Government’s explanation as “nonsensical”.

PA Wire Helen Goodman

Helen Goodman

Treasury coffers will take a £66bn annual hit if Britain goes for a so-called “hard” Brexit, Cabinet ministers have been warned.

Leaked Government papers suggest leaving the single market and switching to World Trade Organisation (WTO) rules would cause GDP to fall by up to 9.5% compared with if the country remained in the European Union.

The draft Cabinet committee paper seen by The Times is based on forecasts from the controversial study into the predicted impact of quitting the EU published by Mr Osborne in April, during the referendum campaign.

The documents says: “The Treasury estimates that UK GDP would be between 5.4% and 9.5% of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5%.”

It adds: “The net impact on public sector receipts – assuming no contributions to the EU and current receipts from the EU are replicated in full – would be a loss of between £38bn and £66bn per year after 15 years, driven by the smaller size of the economy.”

Brexit backers who have seen the documents told the newspaper the figures were unrealistic and claimed there was a push to “make leaving the single market look bad”.

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