Nissan could be compensated if Brexit hits its UK business, Philip Hammond suggests

Posted On: 
3rd October 2016

Nissan could receive compensation if trade tariffs are introduced between the UK and the European Union after Brexit, Philip Hammond has hinted. 

Philip Hammond delivers his speech to the Conservative conference
Credit: 
Joe Giddens/PA Wire

The car manufacturer said last week it would delay investment decisions in the UK unless it received government assurances that it would be compensated for the additional costs of potential trade barriers.

In his conference speech today, Mr Hammond said the Government was “ready to provide support” to businesses as they get used to life outside the EU.

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A Treasury spokesperson later said Nissan would find the comments “reassuring” – but refused repeatedly to be drawn on whether a commitment to compensation was on the table.

Mr Hammond also extended the commitment to guarantee EU funding for British companies and institutions as long as they meet “UK priorities and value for money criteria”.

He said he understood businesses’ disquiet about the “uncertainty” caused by the current situation.

“Many businesses which trade with the EU are uncertain about what lies ahead; they have understandable questions about the process of the negotiations, about the deal that will be done, about the changes they will have to make to adapt to the post-Brexit world, and about what it will all mean for their employees, their company, their business model,” the Chancellor said.

“I understand their concerns: business hates uncertainty…

“Throughout the negotiating process, we are ready to take whatever steps are necessary to protect this economy from turbulence. And when the process is over, we are ready to provide support to British businesses as they adjust to life outside the EU.”

Labour said British companies could be left at a “serious disadvantage” if the Government pushed for a so-called ‘hard Brexit’ which set up tariff barriers between the UK and rest of the European single market.

Shadow Chancellor John McDonnell warned: "There is clearly still a need for increased investment in our economy to equip our country for the future after Brexit, as well to overcome the last six years of Tory under-investment, but if they pursue a 'Hard Brexit' strategy we know that the Tories will continue to make working families pay for their failure.”

FUNDING COMMITMENT

Mr Hammond also announced a further commitment to make up any money British companies lose as a result of Brexit.

He said: “I’ve already guaranteed the funding for projects signed prior to this year’s Autumn Statement. Today, I can go further.

“The Treasury will offer a guarantee to bidders whose projects meet UK priorities and value for money criteria that if they secure multi-year EU funding before we exit we will guarantee those payments after Britain has left the EU. Protecting British jobs and businesses after Brexit.”

Pro-EU campaigners have seized on the proviso to accuse Mr Hammond of failing to give a “genuine guarantee”.

“The Chancellor made clear that the Treasury would pick and choose which schemes to support, but we are in the dark about what criteria will be used,” said Labour MP Mary Creagh on behalf of the Open Britain group.