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Ex-business ministers question agreement struck for Nissan manufacturing deal

Published 28/10/2016

Nissan workers building the Qashqai in Sunderland
Nissan workers building the Qashqai in Sunderland

Nissan must have been told Britain is remaining in the European Union customs union or offered mitigation for the imposition of post-Brexit tariffs before it announced a boost to UK car manufacturing, former business ministers have said.

Downing Street has insisted there was "no compensation package" and "nothing about tariffs" in the assurances the Government gave to the car manufacturer.

But former business minster Anna Soubry, who held initial post-Brexit discussions with Nissan while in government, said she would be "very surprised" if there was no guarantee to mitigate tariffs.

She said David Cameron's government was "very seriously" looking at compensation for any duties imposed on the automotive industry once Britain left the EU.

The Remain-backing Tory MP said she met Nissan on June 30, a week after the Brexit vote, and that the company expressed "profound concerns" about tariffs.

She told BBC Radio 4's World At One: "They didn't give the detail of what they wanted, they made it very clear that without a guarantee that they would not be subject to tariffs or if they were subject to tariffs the Government would do something to mitigate the damage of tariffs... that without that, they told me, my understanding actually was that they would go to Renault because they clearly had the capacity there."

On the assurances that helped Nissan decide to build its next-generation Qashqai, and add production of the new X-Trail model, at its Sunderland plant , Ms Soubry said: " I don't know what it is but I would be very surprised if there hasn't been some sort of guarantee to mitigate any tariffs should they be imposed."

She went on: "I can assure you we (Mr Cameron's government) were looking at underwriting any tariffs should that be imposed upon us as we leave the EU.

"So that's what we were looking at and we were prepared to do. So I don't know what's changed in the change of government."

Former business secretary Sir Vince Cable said, if there was no compensation or mitigation offered, it must mean the UK is remaining in the EU customs union as Nissan would not go ahead without "copper-bottomed promises".

If that were the case it would make the role of International Trade Secretary Liam Fox redundant, as the UK would not be able to negotiate its own bilateral trade deals outside the EU.

Sir Vince told The Guardian: "The only way these big supply chain companies are going to commit themselves to Britain - and Nissan is the biggest - is that if they give them guarantees they are not going to be caught up in rules of origin problems, which is what happens if you leave the customs union.

"And if you stay in the customs union, which I think is what we're talking about, what is the role of Dr Fox? Because it means you no longer have an independent trade policy."

He added: "I was involved in discussions with Nissan in their last big round of investment decisions. Even under the coalition they were toying with doing it in France. I find it impossible to believe they would go ahead without some pretty copper-bottomed promises. These guys do not go making decisions on the basis of vague assurances. That is not the way they operate."

As controversy over allegations of a secret deal continued to swirl, Labour chairman of the Commons Business Committee Iain Wright insisted Business Secretary Greg Clark should appear before the watchdog to give evidence on the matter.

Mr Clark has insisted the deal rests on "a very strong mutual confidence" and stressed "there's no chequebook", while Nissan has also denied there was a special agreement.

But Labour has urged the Government to set out exactly what it told Nissan.

Shadow Brexit secretary Sir Keir Starmer said: "It's welcome that the Government have done a deal with Nissan that protects jobs and supports the local community and economy.

"But that deal needs to be accompanied by transparency and accountability.

"We can't have the Government doing deals that affect jobs and the future of our economy without telling the public or Parliament what the basic terms are.

"They now need to spell that out and strike a wider deal that gives certainty to businesses, workers and communities across the country."

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