Compensating carmakers in Britain for any post-Brexit tariffs on exports to Europe could see the government hand the companies more money than they need to pay the salaries of all their British workers, a Reuters analysis of corporate filings shows.
Japan's Nissan said in September it would only commit to new UK investment if it received a guarantee of compensation to offset any such tariffs. Last week, it agreed to build new models in the country after Prime Minister Theresa May assured it the government would provide support to preserve its competitiveness in the EU market after Brexit.
The nature of the Nissan deal - which gave Britain a crucial corporate endorsement as it prepares for life outside the European Union - is unknown. The government said there hadn't been a "detailed and specific" agreement on tariffs.
If Britain does not secure a free-trade deal with the European Union, car makers in the country could face export tariffs of 10 percent - the level the EU imposes on cars imported from outside the bloc.
The cost of compensating Nissan, which has 2.9 billion pounds ($3.5 billion) of annual EU exports, would be 290 million pounds a year. That would exceed the company's British wage bill, which was 288 million pounds in 2015, accounts for Nissan's main UK operating unit show.
The pattern is followed across Britain's car-making industry.
Reuters examined the accounts of eight of the biggest car exporters, including Jaguar Land Rover, Toyota, Bentley, Mini, Rolls-Royce, Aston Martin and Honda, which are all foreign-owned. Their wage bills averaged 7.5 percent of total operating costs and 7.7 percent of turnover.
This suggests the cost of tariffs on vehicles exported from Britain to the continent - levied at 10 percent of turnover - would exceed the wages paid to British workers to build those vehicles.