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Nissan car plant investment brings pressure on ministers to reveal assurances

Published 29/10/2016

Workers on the Qashqai at Nissan in Sunderland
Workers on the Qashqai at Nissan in Sunderland

Ministers are coming under renewed pressure to explain what assurances were given to the Japanese car giant Nissan that persuaded it to pour new investment into its Sunderland plant following the vote for Brexit.

Two former business ministers who have negotiated with the company have said they believed it must have been told Britain would remain a part of the EU customs union or offered mitigation for any new post-Brexit tariffs that were imposed after leaving.

Downing Street has insisted Nissan had not been offered any form of "compensation package" and that ministers had simply assured the company of the Government's determination to secure the best possible deal after the UK withdrew.

However, the senior Labour MP Chuka Umunna, a leading supporter of the Open Britain campaign, has now written to Cabinet Secretary Sir Jeremy Heywood requesting the publication of details of the commitments "written or otherwise" which have been given to the firm.

"There has been speculation that the Government may have suggested that public money could be used to compensate Nissan, be it in direct aid or through more indirect means.

"Others have suggested that ministers may have given an indication about the UK's future role in relation to the customs union or single market," he wrote.

"If either are true, they pose huge questions, most importantly what financial support was offered; whether any limit was placed on the public finance available; and whether the same assurances would be extended to other automotive-manufacturers and other sectors, including service sectors.

"I am of, course, supportive of the Government's aim to protect our manufacturing base, but it seems extraordinary that the Government would reveal elements of its negotiating strategy to multinational companies when it is at the same time doing its best to keep Parliament and the public in the dark."

There has been intense speculation as to what the company has been promised after Nissan chief executive Carlos Ghosn announced on Thursday that the "support and assurances" it had received meant it would build the next generation Qashqai and the new X-Trail models in Sunderland.

The move was hailed by No 10 as a "vote of confidence" in the UK in the wake of last June's referendum vote to leave the EU, securing 7,000 jobs at the plant and a further 20,000 in the wider economy.

It came after Mr Ghosn met Theresa May in Downing Street earlier this month for talks on the company's future in the UK while Business Secretary Greg Clark has also been out to Japan to meet senior figures at the firm.

However, the Liberal Democrat former business secretary Sir Vince Cable and Conservative ex-business minister Anna Soubry have both said they believed Nissan would not have gone ahead with the investment unless it had been assured the UK would either remain in the customs union or there would be mitigation for any new tariffs it faced.

The Unite trade union said it would be pressing to ensure that whatever assurances had been given to Nissan would apply across the manufacturing sector.

"Our members at car and other manufacturing plants across the country rightly are looking for the same job security that appears to have been secured at Nissan though government intervention and investment guarantees," said Unite assistant general secretary Tony Burke.

"We need similar arrangement across the manufacturing sector to protect workers and secure these crucial high skill, decently paid jobs."

For Labour, shadow business secretary Clive Lewis said: "The public, and the many other businesses and employees facing turbulent times ahead, have a right to know what Nissan was offered to stay in the UK. Secret backroom deals are unfair, unsustainable, and are no way to run an economy."

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