Nissan wants guarantee of Brexit compensation before investing in Sunderland plant

The production line at Sunderland's Nissan plant

The production line at Sunderland's Nissan plant

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Nissan will want the UK Government to pledge compensation for any extra costs as a result of Brexit before it invests in its Sunderland plant, says the man at the top.

Nissan builds around one in three of all of Britain's total automotive output at Sunderland.

Asked at the Paris Motor Show what factors the company would consider in deciding where to build any future model, Chief Executive Carlos Ghosn told reporters: "If I need to make an investment in the next few months and I can't wait until the end of Brexit, then I have to make a deal with the UK government.

"You can have commitments of compensation in case you have something negative. If there are tax barriers being established on cars, you have to have a commitment for carmakers who export to Europe that there is some kind of compensation."

Mr Ghosn told the BBC the Sunderland plant would lose competitiveness if Britain was left dealing with the EU under World Trade Organisation rules - rather than as part of the Single Market - which would effectively add 10% to the cost of a UK-built model.

The plant's future could 'without any doubt' be harmed unless there was a way to overcome the extra cost, he said.

Carlos Ghosn at the unveiling of the Sunderland-built Qashqai Mark II

Carlos Ghosn at the unveiling of the Sunderland-built Qashqai Mark II

International Trade Secretary Liam Fox and fellow senior Tories have insisted Britain can maintain free trade with the European Union and still exercise control over immigration after Brexit despite fresh warnings that it would be "impossible".

Dr Fox said trade with the EU can be "at least as free" as it is now, while former Cabinet minister Oliver Letwin insisted Britain should "have its cake and eat it".

But Italian Prime Minister Matteo Renzi stressed Britain will not have full access to the single market while curbing immigration, saying it would be "impossible" to give the UK more rights than other non-EU nations.

EU leaders have repeatedly said access to the free trade zone is dependent on allowing the free movement of EU citizens - seen as unpalatable by Theresa May and raising the prospect of a "hard Brexit" outside the single market.

Dr Fox hinted the Government may be leaning towards such a move, saying the UK would become an independent member of the World Trade Organisation post-Brexit and comply with its tariffs and rules.

He said the UK would then work with the WTO on "taking an axe to red tape across borders", adding: "The UK is a full and founding member of the WTO, though we have chosen to be represented by the EU in recent years.

"As we establish our independent position post-Brexit, we will carry the standard of free and open trade as a badge of honour."

But despite his suggestion of what is seen as a "hard Brexit", Dr Fox insisted it was in the interests of EU countries to offer the UK free and open trade after it leaves the union.

Answering questions after a "major" speech in Manchester, he said: "Protectionism never actually helps anybody at all and as we move into a post-Brexit arena, we want it to be as free and as open as possible.

"And don't just look at it from the UK perspective, the European Union has a massive surplus in goods with the UK.

"Who does it harm more if we end up in a new tariff environment? Does it harm more those who sell more to the UK, or the UK?

"It's in everybody's interests that, as we move forward, that we have at least as free a trading environment as we have today."

Mr Letwin said the UK needed to retain access to the single market while gaining control over immigration at the same time.

Asked if that amounted to having your cake and eating it, he told the BBC's Daily Politics: "Yes - correct - that's what we want - we want cake and eating it."