Nissan’s £61m sweetener
Minister admits that motoring giant was offered cash to keep making cars in Britain... but may lose it after Sunderland U-turn
MINISTERS last night revealed details of a secret deal to offer Nissan tens of millions of pounds after the Brexit vote to keep making cars in the UK.
Business Secretary Greg Clark yesterday told the Japanese car maker it could lose out on a £61million support package after it axed plans to build a new model at its Sunderland plant.
His warning came as he finally disclosed details of promises made to the firm in the months after the EU referendum.
At the time, Downing Street said there was ‘no special deal’ and Mr Clark insisted ‘no chequebook’ was used to tempt Nissan into building its X-Trail SUV and a new version of its popular Qashqai in the UK.
But yesterday the Business Secretary published a letter written to Nissan’s chief executive in october 2016 in which he offered a multi-million-pound government package to help in areas such as training and research and development.
In the Commons, Mr Clark said the car giant would be forced to re-apply for the money after it announced on Sunday that the X-Trail will now be made only in Japan. The minister also warned that a No Deal Brexit would be ‘ruinous for our prospects’.
Mr Clark said Nissan’s announcement meant 741 additional jobs would no longer be created. He told MPs: ‘While I’m pleased the decision taken in 2016 to build the Qashqai and secure the Sunderland plant is unchanged, it’s deeply disappointing to me and to the workforce that the extra jobs that would have come from the X-Trail will no longer be available.
‘While the decision was made on broader business grounds, Nissan commented on the need for us to come together and to resolve the question of our future trading relationship with the EU. Their advice should be listened to and acted upon so our automotive industry, which is undergoing more change through innovation in the decade ahead than it has for most of the last century, can seize the opportunities for Britain to be a world leader in state-of-the-art car-making.’
Earlier, Mr Clark published the 2016 letter, which sought to reassure Nissan bosses that their investment would not be damaged by Brexit. In it, he promised: ‘In any circumstance, the Government will ensure that the UK continues to be one of the most competitive locations for automotive and other advanced manufacturing within Europe and globally, including sites such as Sunderland.’
The letter offered £80million of support in ‘areas such as skills, R&D [research and development] investment’, although this was later reduced to £61million.
Mr Clark told MPs that only £2.6million had been paid, for staff training and environmental improvements at the plant.
Asked how much of the rest of the money Nissan would receive, Mr Clark replied: ‘Because the terms of the application which is independently assessed and reviewed has now varied, then of course the com-
‘It’s deeply disappointing’
pany will need to re-submit on the grounds of the new information that it has.’
When Nissan announced its plans to boost manufacturing in october 2016, Labour demanded the Government come clean on any ‘secret deals’. on the BBC’s Question Time, Mr Clark said: ‘There’s no chequebook. I don’t have a chequebook.’
Nicky Morgan, the chairman of the Treasury select committee, said full details of the Nissan deal should be made public ‘immediately’. In a letter to Mr Clark, the senior Tory MP asked him to ‘explain how much direct financial assistance the Government provided to Nissan’, and why it had not been disclosed in a 2016 letter to her predecessor, Andrew Tyrie, now Lord Tyrie.
Nissan said: ‘The letter shows Nissan and the UK Government’s continued desire to support investment in the UK and maintain Sunderland as one of Nissan’s manufacturing hubs in Europe.’