Japanese ambassador warns Prime Minister of Brexit 'high stakes' after talks

8 February 2018, 16:26

Japan's ambassador has warned the Prime Minister of the "high stakes" of Brexit following talks in Downing Street.

Koji Tsuruoka, speaking outside Number 10, claimed international companies could close their operations in Britain if there is "no profitability" in staying.

He delivered a warning to the Government as Cabinet ministers continue to debate the form of Britain's post-Brexit relationship with the EU.

After talks between Government ministers and Japanese business leaders, the ambassador said: "If there is no profitability of continuing operation in the UK - not Japanese only - no private company can continue operation.

"So, it's as simple as that. This is all high stakes that I think all of us need to keep in mind."

Campaigners said Mr Tsuruoka's comments revealed how thousands of UK jobs could be put at risk due to Brexit.

Earlier this week, under pressure from Tory Brexiteers, Downing Street ruled out UK membership of a customs union with the EU after Brexit, in order to preserve an ability to sign independent trade deals with non-EU countries.

Mr Tsuruoka said he would not answer "hypothetical" questions about future UK customs relations with the EU, but said it is "expected that manufacturing business in particular will continue to have the free access to the European market".

He highlighted how past British governments had encouraged Japanese investment by painting the UK as the "gateway to Europe".

However, the ambassador stressed Japan had also been making representations to Brussels "to make the point that the continuation of healthy, sound trade relations between the UK and EU is benefiting not just the UK but also the EU and enhances the global economy as a whole".

"Japan is playing a major role on both sides as a major investor," he said.

Mr Tsuruoka said Japanese companies would like to continue their "successful" operations in the UK, but added they were "watching very closely" and wanted to "see clarity and certainty".

Thursday's talks between Government and Japanese business leaders was attended by Theresa May, Chancellor Philip Hammond, Business Secretary Greg Clark and International Trade Secretary Liam Fox.

Alongside Mr Tsuruoka, bosses from Hitachi, Mitsubishi, Honda, Toyota and Nissan were among the Japanese delegation.

Downing Street said the Prime Minister had used the talks to "set out her vision for an outward-looking, global Britain", while also presenting the Government's industrial strategy, published late last year.

Japanese business leaders "spoke of their desire to continue trading with and investing in the UK", according to a spokesperson.

"Business representatives expressed their appreciation for the opportunity for constructive dialogue with the Government, and agreed on the importance of the time-limited implementation period in providing clarity and certainty for people and businesses," they added.

"There was also agreement on the importance of moving quickly in the negotiations to secure a trading relationship with the EU that is as tariff-free and frictionless as possible following the implementation period."

Responding to the ambassador's comments, Labour MP Phil Wilson, a supporter of the pro-EU Open Britain campaign, said: "If the Government doesn't get its act together soon, we could be saying 'Sayonara' to Japanese businesses based in the UK.

"Japanese companies have invested in this country, supporting more than 160,000 jobs, largely on the basis that it provides a bridge into a the wider European market.

"If that bridge collapses, their investment will dry up."