Speaking during his LBC Ring Rees-Mogg phone in, the arch Brexiter told listeners Brexit “far from being the primary reason” for the car builders decision.
He said: “The issue for many of the car manufacturers begins with diesel engines and the big push that emanated from the European Union to encourage people to buy diesel engines and discourage petrol engines.”
“Car manufacturers set themselves up to make more diesel rather than petrol engines. People then discovered, actually they knew all along but didn’t do anything about it, the particulates and nitrogen oxides were poisoning people.
“So the desire to buy diesel engines has changed.”
Jacob Rees-Mogg said Nissan’s decision was not primarily down to Brexit. (Image: LBC)
But one caller, called only Terry in Basildon, told the Brexiteer MP, who chairs the hardline eurosceptic European Research Group, that: “It’s turned into Project Fact, not Project Fear, isn’t it?
He said: “They did agree to build this X-trail in Sunderland, but now they’ve changed the decision, to build it in Japan, given that Japan has a nice new trade deal with the EU. It makes business sense to actually produce it in Japan, not the UK, as business investment has gone down in the UK this year, by half a percent.”
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Mr Rees-Mogg responded: “The car will be built, but it will be built in Japan. This is because demand has fallen. It’s a lower level of demand, which makes it a different decision. It’s based on different business facts, not on Brexit, which is what the company itself has said.
“So Terry, I think you’re going much further than Nissan itself is willing to go.”
Nissan is shelving plans to build the new X-Trail model in Sunderland (Photo: Andrew Yates/Reuters)
Nissan had announced its intention to build the car in the UK in October 2016. The move was heralded by the Government as proof of confidence in Brexit Britain.
The firm will now build the cars in Kyushu Japan rather than its Sunderland plant. The firm said as it announced its plans: “The continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”
Demand for diesel-fuelled vehicles has slumped in recent years, with increased scrutiny of the environmental impact of the fuel meaning many buyers are fearful of future increased taxes on the cars.
Nissan employs nearly 7,000 people at its Sunderland plant, producing nearly 2,000 cars a day. Sunderland backed leaving the EU by 61.3 per cent in the 2016 referendum.