Minister 'gave Nissan written promise' it would not lose out from Brexit

Posted On: 
28th October 2016

A Government minister convinced car giant Nissan to keep building in the UK with a written promise it would not be left worse off after Brexit, a new report has said.

Nissan's car plant in Sunderland Nissan's car plant in Sunderland
Credit: 
PA Images

Business Secretary Greg Clark wrote to the Japanese firm after it threatened to cut investment in Britain until assurances about the trading conditions outside the EU were offered, according to The Times.

The Government has denied it had offered Nissan a “special deal”, while Mr Clark last night insisted there was no “cheque book” involved.

Theresa May hails Nissan decision to build new car models in Sunderland

Nissan could be compensated if Brexit hits its UK business, Philip Hammond suggest

Nissan seeks compensation guarantees from Government over post-Brexit tariffs

Yesterday Nissan announced it will build the next generation of two car models at its Sunderland plant, in what Theresa May hailed a “vote of confidence” in Britain.

The firm apparently took Mr Clark's letter as a promise the Government will cover the cost of car export tariffs if Britain quits the EU customs area before it negotiates a new free trade deal.

After a crunch summit in Japan Mr Clark assured executives its operations in the UK would “remain competitive,” but did not spell out a deal on tariffs, the paper said.

According to the Financial Times, the Government told Nissan there were several different “levers” it could pull – an attractive prospect for other car firms seeking similar arrangements.

'NO SPECIAL DEAL'

Downing Street was yesterday forced to insist it had not offered a “special deal” to Nissan to keep its operations in the UK.

Labour leader Jeremy Corbyn welcomed the fresh investment in Sunderland, but raised “concerns” about a sweetheart agreement that could spark a wave of demands from other firms.

“We are only a few months into Brexit and we don’t know what the terms of the agreement are between Nissan and the Government,” he said.

But the Prime Minister's spokesperson insisted: “The assurances are that we will get the best possible deal. There was no special deal for Nissan.”

They added: “The dialogue we’ve had with Nissan as we do with other companies is a reassurance that we are determined to get the British industrial sector the best possible deal.

“It is a reassurance. There is no deal. We have a dialogue with Nissan and many other companies.”

Mr Clark told the BBC yesterday: “We have had, obviously, lots of communication between us, but actually what it rests on is a very strong mutual confidence...

“There is no question of financial compensation over tariffs because we have said that we are going to maintain the competitiveness of the sector, and we are going to get the best deal possible.”

On Question Time last night, he added: "There's no cheque book. I don't have a cheque book...

"The important thing is that they know this is a country in which they can have confidence they can invest.

“That was the assurance and the understanding they had and they have invested their money."

'SUPPORT AND ASSURANCES'

Meanwhile, Carlos Ghosn, Nissan’s chief executive, said the "support and assurances of the UK government enabled us to decide that the next-generation Qashqai and X-Trail will be produced at Sunderland".

The Sunderland plant is Britain’s largest, with 475,000 vehicles being made at the location last year, amounting to almost one in three cars made in the UK. Some 80% of its output was exported.

It marks the first major investment decision by an international car maker since June’s vote to quit the EU, and will secure 7,000 jobs in the region.

The Prime Minister hailed the "fantastic" news, saying the company is "at the heart of this country's strong automotive industry".

“It is a recognition that the Government is committed to creating and supporting the right conditions for the automotive industry so it continues to grow – now and in the future," she said.

"This vote of confidence shows Britain is open for business and that we remain an outward-looking, world-leading nation.

“The Government will continue to work closely with employers and investors in creating a global Britain, a country where there are new opportunities for jobs and rewarding careers.

"Families across the North East will be delighted at this news today and I share in their enthusiasm for what this means not just for them, but for the whole of the UK."