LONDON — An influential Tory MP has asked the National Audit Office (NAO) to open an investigation into the alleged “sweetheart” deal given to Nissan by the government.
Andrew Tyrie, chair of the Treasury Select Committee, has written to the NAO asking it to examine whether any new “contingent liabilities” have arisen as a result of the government’s deal with Nissan, which convinced it to commit to building its new models in the UK despite uncertainty around Brexit.
Tyrie has called for the investigation following repeated refusals from the government to publish specific details of the arrangement and the letter given by business secretary Greg Clark to the Japanese car manufacturer.
Clark gave Nissan a letter of assurances over Brexit that led to speculation in the press that it amounted to a “sweetheart deal” or a blank cheque.
The Times reported shortly after the deal was announced that Clark assured Nissan Britain will “remain competitive” after Britain leaves the EU and assures the car manufacturer that it will not lose out as a result of Brexit. The fear is that this guarantee could effectively amount to a blank cheque.
The government has knocked back multiple Freedom of Information requests asking for details of the alleged “sweetheart” deal given to Nissan over Brexit.
Several journalists and members of the public have made Freedom of Information requests asking for a copy of Clark’s letter. However, the government has repeatedly rejected the requests, for a variety of reasons:
- The Department of Business, Energy and Industrial Strategy (BEIS) rejected the Financial Times request on the grounds that it had not yet decided if it was in the “public interest.” It says it will hope to respond by December 30 — the slowest period of the year when many people are on holiday;
- A request for details of the agreement from a Mr Mark Jones to BEIS was rejected due to the wording of Jones’ letter, saying the FOI “contains an enquiry rather than a request for recorded information.” The reply links to a statement read by Clark in the House of Commons;
- Two FOIs to Downing Street, one from Mr Jones and one from a Mr KT Peace, both also direct the inquiries to Clark’s statement in the Commons.
The government has also failed to give details to the Office for Budget Responsibility (OBR), the independent body meant to hold Downing Street to account on budgetary matters. The OBR wrote in its audit of last month’s Autumn Statement that it asked the Treasury to estimate the cost of the Nissan deal but the department: “declined to address the substance of our question.”
Chancellor Philip Hammond said in a letter to Tyrie, sent last Thursday, that the Treasury expects “no new contingent liabilities” but adds: “In any case, we expect any commitments incurring costs to be managed within existing
overall [spending] totals.”
Tyrie says in a statement on Friday that the Chancellor has “not answered the crucial question” over whether the Nissan deal could amount to a blank cheque.
Nissan CEO Carlos Ghosn said it is “not in my own interest” to comment on the nature of the Brexit deal when approached by Business Insider last month. But he added that he was “reassured on the competitiveness” of post-Brexit Britain, saying Nissan would not “invest in a black box.”
Clark’s told Parliament shortly after the deal that Nissan needed reassurance on four points: that the government would continue to invest “hundreds of millions” into the automotive sector; that the government will help Nissan locate more of its supply chain in Sunderland; that it will continue R&D spending around low-emission cars; and, crucially, that Britain pushes to ensure that post-Brexit “trade between us [and the EU] can be free and unencumbered by impediments,” particularly in the automotive sector.
However, as my colleague Ben Moshinsky pointed out, “the European access that the UK car industry wants, along with other sectors, conflicts with statements already made by May and her ministers on the line Britain will take in its Brexit negotiations.”
Britain appears to have prioritised restricting immigration over maintaining Single Market access and European leaders have repeatedly signalled that there can be no Single Market access unless Britain also accepts Freedom of Movement.
The key question is: if Britain loses Single Market access, will Nissan expect the government to pay for any costs it incurs? We don’t yet have the answer.