Britain will have to accept freedom of movement for European Union citizens if it wants to remain part of the European single market, German carmakers have warned.
Matthias Wissmann, the President of the German Automotive Industry Association, said the UK would have to swallow a "bitter pill" and allow EU citizens to enter the country if it wanted to retain access to the single market.
"We don't like to build new barriers [...] but any bid to secure full access to the single market would necessarily come with conditions," he said. "Everyone who negotiates on the British side will understand that."
Wissmann's words will come as a blow for the 'Leave' campaign, which had made the promise of restricting access to the UK one of the pivotal points of its manifesto. Pro-Brexit campaigners had also indicated they expected Germany to offer an advantageous trade deal to the UK, in a bid to boost their car exports.
However, Conservative MP John Redwood, who suggested Britain would get a better deal outside the EU than Switzerland or Norway, dismissed the warning. "I don't think he [Wissman] speaks for the German government," he said.
"We've heard [German Chancellor] Angela Merkel take a fairly emollient line. She is only too well aware that German industry is saying to her: 'For goodness sake do not end up with tariffs and barriers in the way of our very substantial exports to the United Kingdom market.'"
On Monday, (27 June), George Osborne said Britain was ready to confront what the future holds from "a position of strength", although he warned leaving the European Union will have an impact on the UK's public finances. "Thank goodness we fixed the roof, while we could," Osborne said in a speech at the Treasury in London in his first public appearance after Britain voted to leave the EU last week.
"Leaving the EU was not the outcome that I wanted or campaigned, but now that democracy has spoken we must act on that result. I will fully respect that result."