Nissan and Toyota call for bailout if Brexit talks fail

NISSAN and Toyota yesterday demanded a government bailout to cover the tariffs they will face if Britain fails to reach a trade deal with the EU.

The two Japanese car manufacturers want the British Government to cover the expected 10 per cent taxes that would affect automotive exports from Jan 1 if Britain leaves the transition period without an agreement. UK and EU negotiators are trying to finalise a zero-tariff free trade agreement by the European Council summit in Brussels on Oct 15.

The two sides remain divided over issues such as fishing, enforcement and dispute resolution and the level playing field guarantees, especially for subsidy law.

Boris Johnson held talks with Ursula von der Leyen, the president of the European Commission, on Saturday and they agreed that the negotiations should be intensified. The Prime Minister said on Sunday his preference was for an agreement but that Britain could live with no deal.

Nissan warned in June that its factory in Sunderland, which employs 7,000, would be “unsustainable” if there was no deal. It pushed ahead with £52 million plans to build its new Qashqai sports utility vehicle after securing reassurances from the Government that Brexit would not hurt its competitiveness. Toyota operates a plant in Derbyshire, and produced roughly 8 per cent of the 1.52 million cars that were made in Britain in 2018. It also produces engines at a factory in Wales.

“We urge UK and EU negotiators to work collaboratively t owards an orderly, balanced Brexit that will continue to encourage mutually beneficial trade,” Nissan said.

According to the Society of Motor Manufacturers and Traders, 80 per cent of cars that are built in the UK are exported, with 55 per cent of those going to the EU.

Nissan and Toyota produced just under half a million vehicles in the UK last year with almost 220,000 going to the EU.

The society said last year that tariffs could add £3.2 billion a year to costs for the car industry in Britain.

A No 10 spokesman said: “We’ve been working with a wide range of sectors across the economy, including the automobile sector, to ensure they are prepared for the end of the transition period.”

The Government wants the outline of the deal by Oct 15 and the talks on the small print could run beyond that deadline.

The EU’S deadline to finalise the deal is the end of October, but sources in Brussels believe that could stretch to mid-november.

Angela Merkel met with Michel Barnier, the EU’S chief negotiator, in Berlin yesterday.

The German chancellor said she was “optimistic” as long as negotiations continued.

Heiko Maas, the German foreign minister, said yesterday it would be “totally irresponsible” to force a no-deal during the coronavirus pandemic.

Mr Barnier plans to contact EU fishing ministers ahead of trade talks in London this week in a bid to secure support for any future compromises.