Brexit: Government reveals it is seeking tariff-free access to EU markets

Greg Clark, the Business Secretary, has revealed the Government told Nissan it would seek a tariff-free deal with the European Union for the car sector in Britain.

It comes after the Government faced intense pressure to disclose assurances provided to the Japanese car giant behind the scenes at Downing Street earlier this week.

To the delight of ministers, the manufacturing company decided it will continue investing in Britain after Brexit and promised to build its new cars at its flagship Sunderland plant. But Mr Clark revealed on Sunday the company announced its intentions after receiving assurances the Government was committed to securing continued tariff-free access to EU markets.

Asked whether tariffs would disadvantage Nissan on the BBC’s Andrew Marr Show, the Business Secretary, responded: “Of course if there were tariffs in a market which is very international – there’s a lot of trade from the continent of Europe to the UK so the supply chain is integrated.

“So one of the assurances I was able to give is that our intention, our negotiating remit when it comes to the discussions with our European partners is to have a constructive and civilised dialogue to look for the common interest.

“So what I said is that our objective would be to ensure that we have continued access to the markets in Europe and vice versa without tariffs and without bureaucratic impediments. And that is how we will approach those negotiations”.

Appearing moments after on ITV’s Peston on Sunday, the shadow Brexit Secretary Keir Starmer, however, attacked the Government’s lack of transparency and demanded the correspondence between the Business Secretary and the Japanese country be made public.

But when told about Mr Clark’s announcement, he appeared irritated, adding: “To learn of this in an interview this morning is the wrong way to prepare for these negotiations.”

On Saturday John McDonnell, the shadow Chancellor, welcomed the decision by Nissan to back the “hard work and dedication” of the workforce at the Sunderland plant. “But there are other plants in the car industry whose workers will be holding their breath hoping that their jobs are also safe following the Tories’ shambolic handling of Brexit.”

He added: “The trade unions are right to demand clarity from Government. It is unforgivable that the Tories can clearly act to safeguard jobs in our manufacturing industries, as proven by their deal with Nissan, but are refusing to do so. This is something that is deeply concerning many thousands of dedicated workers as we approach the Christmas period.”

Mr Clark – who acknowledged World Trade Organisation rules meant the Government could not offer to compensate Nissan if tariffs were imposed – confirmed he had set out the Government’s approach in a letter to Mr Ghosn. It included commitments to continue to make funds available for skills and training, to "bring home" elements of the supply chain which had migrated overseas, to support research and development, and to keep the UK car industry competitive.

“It is simply not possible to compensate for any future risks so the intention of keeping the sector competitive was important,” he said.

“In the motor industry we have a very long track record of investment, in skills in innovations and research and development. But these things are independently reviewed, we can't guarantee them. I hope that they [Nissan] will succeed. They have to apply as companies in the sector have to do.”

Ministers were elated after Nissan announced it would build its next-generation Qashqai in Sunderland, as well as add production of the new X-Trail SUV model. Prime Minister Theresa May also hailed it as “fantastic news”, adding: “This vote of confidence shows Britain is open for business and that we remain an outward-looking, world-leading nation.”