JLR says it could lose £1.2bn a year without access to the single market.

Jaguar Land Rover has issued the starkest warning yet on Britain’s departure from the EU, saying a hard Brexit could force it to leave the UK. 

JLR chief executive Ralf Speth issued a strongly worded statement this week ahead of the government publishing its Brexit white paper, which prime minister Theresa May hopes to thrash out during a cabinet trip to her Chequers country house this weekend.

Speth said that JLR’s ‘heart and soul’ is in the UK, and outlined a simple demand from the car industry, namely ‘free and frictionless trade with the EU and unrestricted access to the single market’. 

‘We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees,’ he continued.

‘A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year. As a result, we would have to drastically adjust our spending profile; we have spent around £50bn in the UK in the past five years – with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome.’

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JLR’s parent firm, Indian industrial giant Tata, also added to the pressure on the UK government in a statement that said: ‘a Brexit which increases bureaucracy, reduces productivity and competitiveness of the UK industry is in no-one's interest.’

As well as criticism from the car industry, the likes of Airbus and Siemens have also warned that their presence in the UK is at risk if a good deal on Brexit isn’t reached. 

An October deadline was originally planned for a deal to be agreed between the UK and EU negotiating teams – a scheduled European council meeting would have left plenty of time for EU and UK bodies to ratify the agreement. EU insiders are now saying that a lack of decisiveness from the UK is making a December deal more likely, leaving little time before the Article 50 deadline of March 2019.