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Tariff-free access to EU markets 'central to Brexit strategy'

Published 30/10/2016

Nissan has announced it will build two new models in Sunderland
Nissan has announced it will build two new models in Sunderland

Securing continued tariff-free access to EU markets for British manufacturers will be central to the Government's Brexit negotiating strategy, Business Secretary Greg Clark has disclosed.

Mr Clark said the assurance ministers were committed to ensuring the automotive sector in the UK remained competitive once Britain had left the EU had been key to persuading Nissan to invest in the production of two new models at its Sunderland plant.

The Government has been under pressure to reveal the terms of its agreement with the Japanese car giant following the announcement last week which secured the future of 7,000 jobs in the UK's biggest car factory.

Ministers have strongly denied the firm was offered a "sweetheart deal" and Mr Clark said he set out details of the Government's four-point approach to the automotive sector in a letter to Nissan chief executive Carlos Ghosn.

It included commitments to continue to make funds available for skills and training, to encourage smaller firms in the supply chain to locate in the UK and to support research and development, as well as the pledge to keep the UK car industry competitive.

The Business Secretary refused to be drawn on whether the Government was seeking to remain part of the EU customs union or on the implications for its commitment to end free movement of labour with the EU, saying it had yet to fully "crystallise" its negotiating position.

But appearing on BBC1's The Andrew Marr Show, he confirmed World Trade Organisation rules on state aid meant the Government could not offer to compensate Nissan if it was hit by new post-Brexit tariffs.

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

"What I said was that our objective would be to ensure that we would 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.

"For the continental European car manufacturers, they export a lot to us, we export a lot to them, components go backwards and forwards. If you conduct the negotiations in a serious, constructive and civilised way there is a lot in common that we can establish.

"I was able to reassure Nissan - and other manufacturers - that that is the way we are going to approach it."

Labour, however, continued to question whether there was a "financial element" to the agreement with the company.

Shadow Brexit secretary Sir Keir Starmer said he would be seeking to raise the issue in the Commons on Monday, saying the Government still needed to disclose the full terms.

"There may be a financial element to it - I accept that. They say no money is changing hands. I don't know," he told ITV's Peston on Sunday programme.

"We need to know and I'm going to try and raise this in Parliament because something has been said.

"It's good Nissan are investing, of course it's good, but there are other businesses up and down the country of every size and every sort that need (reassurance)."

"They want to trade on the same terms and if there is a deal that's good enough for Nissan they are saying, and it's quite understandable, 'Well, we want broadly the same deal for us'."

Mr Clark said it would be open for Nissan to apply for Government assistance with skills and training or research and development, but insisted any request would have to be independently reviewed.

"We can't guarantee them. I hope that they will succeed. They have to apply, as other companies, in fact almost every company in their sector, would do."

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