Chancellor appears to contradict Prime Minister's vow to protect Nissan supply chains during pre-election visit

Comments over Brexit from the Chancellor of the Exchequer, which differ from those of the Prime Minister, have caused further concern over the future of car manufacturing in the UK.

Monday, 20th January 2020, 11:03 am

Sajid Javid, in an interview with the Financial Times, said there would be “no alignment” with EU regulations after the UK leaves the union on January 31, and that some firms would lose out.

He added that the Treasury would not support manufacturers who favoured alignment with EU rules, as they have had since 2016 to prepare for Brexit. The UK's 11-month transition period begins immediately after EU withdrawal.

Prime Minister Boris Johnson visited Sunderland in the run up to the General election as the Conservatives targeted Leave-voting Labour strongholds and said his deal would create ‘a state of equivalence with our European Union’.

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Prime Minister Boris Johnson during a visit to Fergusons Transport in Washington on December 10.

Mr Javid said: “There will not be alignment. We will not be a ruletaker. We will not be in the single market and we will not be in the customs union; and we will do this by the end of the year."

Mr Javid would not specify which EU rules would be dropped, but said some businesses would benefit from Brexit, while others wouldn’t.

Speaking during a visit to Washington on December 10 last year, two days before the General Election, Prime Minister Boris Johnson said his Brexit deal would leave existing trade regulations with the EU “perfect and intact.”

Mr Johnson said then: “We have a decent deal. It gets us out on January 31 and it enables us to take back control of our money, our borders and our laws.

“But what it also does is it keeps us in a state of grace, a state of equivalence with our European Union friends and partners.

“So the zero-tariffs, zero quota arrangements that we have, the just-in-time supply chains - they will remain absolutely there, perfect and intact.”

He added: “Supply chains will be protected. And we will make sure that people will continue to invest in this country, and they will.”

It comes as 70% of Nissan’s exports are to Europe.

Nissan Europe chairman, Gianluca de Ficchy, has warned that tariffs of 10% between the UK and EU, means the Washington factory's future will be in doubt.

The Society of Motor Manufacturers and Traders (SMMT) said its priority was to avoid "expensive tariffs and other behind-the-border barriers" between the UK and EU that limit market access.

Its chief executive Mike Hawes added: "Both sides want a thriving sector and we want to work with Government to help reach a mutually beneficial arrangement on regulation that safeguards UK manufacturing and consumer choice by allowing vehicles built in the UK to be sold in the EU and vice versa without additional requirements that would add billions to the cost of development.

"It is important, therefore, that we have early sight of the details of the Government's ambitions so we can evaluate any impact on our competitiveness and the future of volume manufacturing in the UK."