Nissan and Government deny 'sweetheart deal' over UK investment

Nissan and the Government have denied that the manufacturer's decision to build two new car models in Sunderland was the result of a 'sweetheart deal' protecting it from any EU tariff wall post-Brexit.

Confirmation of the investment sparked a political backlash and industry scepticism when Nissan's boss, Carlos Ghosn, said the company's decision was driven by Government "support and reassurances".

It was the word "support" that had proved controversial as the car-maker had threatened to put the brakes on new UK-built models following the EU referendum without assurances of compensation for any new trade tariffs.

A No 10 spokesman later insisted there was no "compensation package" or "special deal" done with Nissan to secure the investment.

"What was made clear to Nissan and to others in the automotive industry is that what we want is a competitive environment for the whole of the industry," he said.

Nissan also clarified it had not been given special treatment.

It had earlier announced it would build its next-generation Qashqai and add production of the new X-Trail model at Britain's biggest car plant, securing more than 7,000 jobs and 28,000 more in the supply chain.

Mr Ghosen said: "I welcome British Prime Minister Theresa May's commitment to the automotive industry in Britain and to the development of an overall industrial strategy."

Mrs May said: "It is a recognition that the Government is committed to creating and supporting the right conditions for the automotive industry so it continues to grow now and in the future.

"This vote of confidence shows Britain is open for business and that we remain an outward-looking, world-leading nation."

The Government's assertion of no special deals for Nissan - or any competitor - followed widespread criticism from its political opponents after Nissan had released its investment statement.

:: Nissan investment May come at significant cost

Shadow chancellor John McDonnell welcomed the Nissan news but said it was evidence of a chaotic approach and questioned what assurances the Government had needed to give to the car manufacturer .

Lib Dem leader Tim Farron said it was "utterly ridiculous" the UK was having to give "special assurances" to key manufacturers to deal with the "Brexit fallout her Government is creating".

The car industry has raised fears that while a cheaper pound may make their goods more attractive to foreign buyers, an exit from the single market and the prospect of trade tariffs will add to their costs.

Manufacturers were cautious in their response.

Jaguar Land Rover told Sky News: "We are talking to Government at every level and asking for a tariff free trading environment, access to talent and the same legislative framework we have now.

"(Chief (Taiwan OTC: 3345.TWO - news) executive) Dr Speth went on record at the Paris show, responding to Nissan's request, to say that he wanted a level playing field for Jaguar Land Rover."