Business Secretary Greg Clark says Nissan U-turn is a no-deal Brexit 'warning sign'

Posted On: 
4th February 2019

A decision by Nissan to shift production of a new car from Sunderland to Japan is a "warning sign" against a no-deal Brexit, Business Secretary Greg Clark has said.

Nissan's Sunderland plant.
Credit: 
PA

The car maker announced on Sunday that it would no longer produce the X-Trail model at its North East plant, despite a 2016 deal with ministers to do so.

It said in a statement: "While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future."

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While the firm has said no jobs will be lost as a result of the move, Mr Clark - who is among those in the Cabinet urging Theresa May to rule out leaving the EU without an agreement - said the decision was "very bad news" for the economy.

And he told the Financial Times that bosses of the car giant had warned a no-deal outcome in Brexit talks was casting a "shadow over their future in Britain".

"They said it was a warning sign," he told the paper.

Pointing to the possibility of major disruption to supply chains under a no-deal, Mr Clark said: "How can you commit your goods to the high seas without knowing the terms on which they will be received?"

The stark warning came as Labour blamed the Government's "chaotic" handling of Brexit for the decision.

"This is a blow not only to future investment in Sunderland but also to Britain’s industrial strategy," Shadow Business Secretary Rebecca Long Bailey said.

She added: "The Government's chaotic handling of Brexit has been the root cause of business uncertainty. 

"There are serious questions that the Government must now answer on Monday, not least what was in the secret Brexit deal it issued to Nissan and why this was no longer good enough."

Nissan only agreed to build the X-Trail in Britain in 2016 after it received "support and assurances" from ministers that it would be shielded rom the impacts of Brexit.

Mr Clark at the time said Nissan had been promised EU trade that was "free and unencumbered by impediments", and described the decision to stay in the UK as a "massive win".

But The Times reports that latest move by by the company could see the Government pull £60m-worth of financial support handed out to the firm.

A Government source told the paper: "This kind of support package to help in areas such as training and skills is typical across the industry. Clearly we will be reviewing it in the light of this decision."

Labour MP for Houghton and Sunderland South Bridget Philipson meanwhile said Nissan's move was "the clearest signal yet of the damage being caused to the UK car industry by the uncertainty around Brexit".

Speaking for the People's Vote campaign, she said: "I fear this announcement is only the beginning, and it is working people who will suffer the consequences."