The British government has awarded Jaguar Land Rover more than £11 million in state aid since the UK decided to leave the European Union.

Business Secretary Greg Clark denied claims he was “desperately having to throw money” at worried carmakers to stay in the UK because of Brexit.

It comes after Mr Clark confirmed the Government had offered Japanese carmaker Nissan £61 million on condition that it built its X-Trail model at a plant in Sunderland. The firm has been told it must re-apply for the money, after announcing the vehicles will not be built in the UK after all.

Indian-owned Jaguar Land Rover employs just under 39,000 workers at sites including Castle Bromwich, Solihull and Wolverhampton in the West Midlands, and Halewood on Merseyside.

It announced in January that is to cut 4,500 jobs globally under plans to make £2.5 billion of cost savings.

Details of state aid awarded by EU member states, published on a European Commission website, show the UK awarded Jaguar Land Rover £4.65 million in March 2018.

 

This was described as “direct grant/interest rate subsidy” for scientific research and development.

In January 2018 the businesses was awarded £901,795 for the same reason.

JLR was awarded £3.4 million in December 2016 and £821,577 in September 2016.

The website also shows that JLR recieved “2,000,000 - 5,000,000 euros” in March 2017, described as “aid in the form of reductions in environmental taxes”.

If this grant was the lowest amount suggested then it would come to around £1.75 million. This would mean the total sum awarded to JLR was £11.5 million.

Vehicles are checked before moving to the next stage of production at the Jaguar Land Rover factory, Solihull
Vehicles are checked before moving to the next stage of production at the Jaguar Land Rover factory, Solihull

The European Commission website also shows that Aston Martin Lagonda, based in Gaydon, Warwickshire, received £5.8 million via the Welsh government in August 2017. The firm is building a factory in south Wales.

Aston Martin Lagonda also received £1.2 million to support research and development in the West Midlands, in March 2017.

Other firms to receive support include Toyota, Ford and BMW.

Mr Clark was questioned about the funding as he gave evidence to a House of Commons inquiry.

Labour MP Anna Turley said the funding had effectively been hidden because it was listed on a website where it could only be found by people who already knew what they were looking for.

 

She asked the Business Secretary: “Is this the tip of the iceberg? And is this a Brexit bill that we just haven’t been discussing publicly?

“Because it’s just been published on European Commission websites and not actively discussed as vital support to an industry that otherwise is looking at fleeing the country.”

She said: “Isn’t this an acknowledgement that you are disparately having to throw money at these companies to stay in the UK because Brexit is threatening their long term stability here?”

Business Secretary Greg Clark
Business Secretary Greg Clark

Mr Clark said the Government had always been open about its policy of supporting the automotive industry, and insisted that he had been open with MPs when he made a statement to the House of Commons in 2016 about reports that Nissan had been offered funding.

He said: “It’s clearly what I said in my statement to the House at the time.

“I talked about our successful and longstanding programme for support for competitiveness of the automotive sector including Nissan.

“The support is available to firms for skills and training the local workforce, for R&D and innovation in line with EU and UK rules.”

 

Mr Clark also admitted that carmakers wanted certainty about the trading arrangements that will be in place after Brexit, but the Government is not currently able to provide it after the House of Commons rejected Prime Minister Theresa May’s proposed Brexit withdrawal agreement.

“It will be a critical priority of our negotiations to ensure that their ability to export [continues],

“It is not possible for me to say that this will definitely be the outcome. I wish it were. It would be much more reassuring to them if it were.

“But I’ve always had to be clear that it dependd on an agreement being conducted.

“Over the last two and a half years I’ve spent a lot of time in boardrooms around the world who have been looking with anxiety at our future prospects"

Mr Clark continued: “What I have been able to say with confidence is that the policy in the government has been to secure an ability to trade closely without tariffs and without introducing new unnecessary impediments.

“That is our policy and whilst it doesn’t provide the certainty that businesses would prefer to have, at least they know that is what we want, and we are not indifferent to their needs and concerns, far from it.”