Theresa May urged to give Nissan assurances over EU export tariffs

Nissan GTR Still

Sunderland faces the “catastrophic” loss of tens of thousands of jobs unless Theresa May gives urgent assurances to Nissan over trade tariffs, a local MP has warned.

Julie Elliott, the Labour MP for Sunderland Central, said the city and wider region could suffer job losses “on a scale not seen since the closure of the shipyards and coal mines” due to Brexit uncertainty.

In a letter to the prime minister, Elliott said the looming threat of EU export tariffs had already jeopardised the future of Sunderland’s Nissan car plant and the 35,000 jobs it supports.

“Tens of thousands of jobs in Sunderland, over 100,000 jobs in the north-east and many hundreds of thousands of thousands of jobs across the UK are at risk as a direct result of the potential introduction of trade tariffs,” Elliott wrote.

Britain’s booming motor industry faces an uncertain future in the wake of the Brexit vote, with Europe the destination for almost 60% of the cars made in the UK. For some plants, such as Nissan’s factory in Sunderland and Toyota’s in Derbyshire, the figure is as high as 80%.

Nissan’s chief executive, Carlos Ghosn, warned a fortnight ago that it was delaying new investments in its Sunderland plant until the UK had concluded Brexit negotiations, raising the possibility that new models would be built overseas if the UK was hit with tariffs.

Nissan’s Sunderland factory produces more than half a million cars a year and is due to decide in the first quarter of next year where it will produce the new Qashqai, its popular small SUV model.

Elliott warned that a 10% tariff on each vehicle sold into the EU would put Sunderland at a “competitive disadvantage” to the car giant’s other European plants. Around 35,000 people in the north-east, many of whom live in Sunderland, are employed either by Nissan or one of the many companies in its supply chain.

“The Brexit negotiations present an opportunity for us to create an environment for companies to flourish, feel confident to invest and be able to create even more jobs. If the prime minister fails to take urgent action now, however, we risk job losses on a scale not seen in Sunderland since the shipyards and coal mines closed a generation ago,” Elliott said.

Elliott, who was careful not to issue such stark warnings of job losses before the referendum, denied she was scaremongering but said: “We have to be realistic about what the consequences will be.

“Terrifyingly, the future of Sunderland’s Nissan plant has been jeopardised,” she said.

In the letter to May, Elliott added: “This is not a political issue but a practical matter concerning the future of UK manufacturing, a sector of strategic significance to our economic security. I urge you to take immediate action to address these issues in order to protect my region and prevent UK manufacturing being eliminated.”

Nissan is not the only giant in Britain’s motor industry to have issued warnings about trade tariffs since the referendum on 23 June. Jaguar Land Rover, the UK’s has biggest car maker by units, said trade barriers would “not only affect what we sell but what we buy, and it will ultimately damage our business and British jobs”.

Earlier on Tuesday George Osborne said the government must urgently respond to the motor industry’s concerns and seek the “closest possible economic relationship” with its former EU partners.

Giving evidence to MPs on the business select committee, the former chancellor said: “This government and this parliament have got to make the UK the place to make cars in Europe – as it has been in recent years.

“We have got to make sure that the future for the automotive industry is very successful, that this is an environment where people want to come and build their cars, where there’s access to a skilled workforce, where the tax regime is right and the local economy can support the car plant and they can export those cars into the continent of Europe.

“We are a European base for car manufacturing. We produce more cars out of that plant in Sunderland than the whole of Italy. That’s got to be something we focus on in the coming years, and overcome the challenges that present us.”

Powered by Guardian.co.ukThis article was written by Josh Halliday, for theguardian.com on Tuesday 11th October 2016 19.37 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010