28/10/2016 08:40 BST | Updated 28/10/2016 11:12 BST

Nissan Sunderland Post-Brexit 'Sweetheart' Deal Is Denied By Government

'Utterly ridiculous'.

The government has been accused of giving a “sweetheart deal” to Nissan to protect it from post-Brexit fallout after the car manufacturer announced it will build two new models in Sunderland.

Both the government and Nissan have denied any deal was struck but the manufacturer has confirmed it decided to build the new Qashqai and the X-Trail SUV after being given “support and assurances”. 

Nissan CEO and Chairman Carlos Ghosn made the comment on the manufacturers website where he also thanked Prime Minister Theresa May for her “commitment to the automotive industry in Britain and to the development of an overall industrial strategy.”

Nigel Roddis / Reuters
The government has been accused of giving Nissan a 'sweetheart deal' after the manufacturer announced it is is two build two new models in Sunderland 

The statement said Nissan’s decision “follows the UK government’s commitment to ensure that the Sunderland plant remains competitive”.

As a result of the decision, Nissan said it will increase its investment in Sunderland, securing and sustaining the jobs of more than 7,000 workers at the plant.

Labour leader Jeremy Corbyn has said the government must make public any deals struck with the Japanese firm, but Business Secretary Greg Clark told the BBC that there was “no question of financial compensation” for Nissan.

Liberal Democrats leader Tim Farron told Sky News it was “utterly ridiculous” the UK was having to give “special assurances” to key manufacturers to deal with the “Brexit fallout her Government is creating”.

A No 10 spokesman added to Sky that Nissan received no “compensation package” or “special deal”.

“What was made clear to Nissan and to others in the automotive industry is that what we want is a competitive environment for the whole of the industry,” he said.

Shadow chancellor John McDonnell - who on Thursday warned the Tories want to create a “Bankers’ Brexit” - told Sky he welcomed the Nissan news but said it was evidence of a chaotic approach. He also questioned what assurances the government had given the car manufacturer. 

The announcement comes after Nissan warned last month that it might not invest in the Sunderland plant unless the government guaranteed compensation for costs related to any new trade tariffs resulting from Brexit.

Andrew Yates / Reuters
Nissan said it will increase its investment in Sunderland, securing and sustaining the jobs of more than 7,000 workers at the plant

Theresa May said Nissan’s decision is “fantastic news”.

The BBC quoted her as saying: “This vote of confidence shows Britain is open for business.”

Clark added that Nissan’s decision to build the new models and upgrade their plant to manufacture 600,000 cars a year, is “proof of the strength of the sector”. 

Senior Nissan Europe executive, Colin Lawther, told the BBC the company had received “no special deal”.

He said: “It’s just a commitment from the government to work with the whole of the automotive industry to make sure the whole automotive industry in the UK remains competitive.

“We would expect nothing for us that the rest of the industry wouldn’t be able to have access to. We see this as a whole industry thing, not a Nissan thing.”

Gareth Fuller/PA Wire
Liberal Democrats leader Tim Farron said it was 'utterly ridiculous' the UK was having to give 'special assurances' to key manufacturers

Production of the next Qashqai model is expected to begin in 2018 or 2019.

Nissan’s decision was also welcomed by the industry body SMMT who said in a statement that car manufacturers needed the government to “provide public assurance to investors that our advantages will be maintained - namely, a competitive business environment, the ability to recruit talent from abroad and the continuation of all the benefits of the single market as we leave the EU”.

However, other manufacturers responded cautiously to the news. 

Jaguar Land Rover told Sky: “We are talking to Government at every level and asking for a tariff free trading environment, access to talent and the same legislative framework we have now.

“(Chief executive) Dr Speth went on record at the Paris show, responding to Nissan’s request, to say that he wanted a level playing field for Jaguar Land Rover.”