Britain’s Sunak announces $22bn Japanese investment in UK economy

Britain’s Prime Minister Rishi Sunak has announced Japanese investment of more than $22bn in the United Kingdom, including funding for offshore wind power and other clean energy projects, but accepted carmakers’ concerns about Brexit trade rules.

Sunak arrived in Japan on Thursday for a Group of Seven leaders’ summit in Hiroshima and will meet business leaders as Britain prepares to join a transpacific trade pact which includes Japan and Australia.

He said the investment by Japanese companies of 17.7 billion pounds ($22.1bn) was a “massive vote of confidence” in the UK economy.

It includes planned funding of about 10 billion pounds ($12.4bn) for offshore wind and hydrogen energy projects from Japanese trading house Marubeni, Downing Street said.

Sunak said the deals showed the fruits of post-Brexit Britain becoming the first non-regional economy to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

But the UK’s divorce from the EU remains a serious headache for companies.

Tariff-free access

European carmaker Stellantis has warned it could close some UK factories should Sunak’s government fail to tweak Brexit trade rules, to ease the supply of batteries for electric vehicles.

Ford, Jaguar Land Rover and German car industry lobby group VDA have all reportedly joined in calls for tariff-free access to be maintained despite a looming deadline under the EU-UK Brexit deal.

“It’s something that car manufacturers across Europe, not just in the UK, have raised as a concern,” Sunak told British media in Japan.

“And as a result of that we are engaged in a dialogue with the EU about how we might address those concerns when it comes to auto manufacturing more generally,” he said.