£60m deal for Nissan Sunderland 'still stands', says minister

The diesel X-Trail will now be built in Japan

A £60m support package for Nissan's Sunderland plant "still stands" despite a decision not to build its latest SUV in the UK, a government minster said.

The car giant, which employs 7,000 people on Wearside, said its new diesel X-Trail originally planned for Sunderland would now be made in Japan.

Business minister Richard Harrington conceded the decision was "a disaster" and that Brexit was partly to blame.

But he said the cash, pledged in 2016, was not dependent on the X-Trail.

Mr Harrington told BBC Newcastle: "The £60m still stands. It's to do with research and development and developing alternative technologies and making sure Nissan is at the forefront of that.

"This was nothing to do with the X-Trail."

• Jaguar Land Rover in Brexit car shutdown

• Toyota urges support for PM's Brexit deal

• Carmakers fear rising trade barriers after Brexit

The pledge was made to the company in a letter which has been released by the government.

Nissan, which has made cars at Sunderland since 1986, said plummeting diesel car sales were also a factor in its decision, which was expected to have created hundreds of additional jobs at Sunderland.

After a meeting with Nissan bosses, the unite union said it had "received firm assurances" that future production of the Juke and Qashqai models in Sunderland was unaffected.

James Ramsbotham, chief executive of the North East Chamber of Commerce, said: "The automotive sector in this country is vitally important and needs to be protected. Brexit is making this situation harder.

"We need clarity on our future trading arrangements with the EU as the impact on our economy is now becoming so damaging."

Sunderland Central MP Julie Elliott said: "This is the first time we have had a major employer in the North East say we are not getting work partly because of the uncertainty around Brexit.

"No-one can deny that this isn't a hammer blow to confidence and the workforce at the plant."

The Sunderland plant opened in 1986 and employs about 7,000 people

Chris Howson, chaplain to Sunderland University, said: "Nissan is the bedrock of our local economy.

"We will be praying for its future and encouraging the government to make its Brexit policy a lot clearer."

Sir Ian Gibson, former chief executive of Nissan UK, said: "Nissan is clearly psychologically important to the area after the decline of established local industries like shipbuilding and coal.

"Along has come a new one that proved to be a success. This has been significantly important to the emotional morale of the area.

"They are a great team at Sunderland and they will not fail to do everything in their power to succeed in whatever the trading environment."