Britain’s government is denying it gave a “sweetheart deal” to Japanese carmaker Nissan to ensure that the firm builds two new models at its plant in the north-east city of Sunderland.
On Thursday, Nissan confirmed that it will build two new models — the new Qashqai and X-Trail — at the plant.
The announcement was a major coup for the government and Prime Minister Theresa May in keeping a major international business in the UK despite the vote to leave the EU, which many have speculated will cause big businesses to move operations elsewhere because of Brexit.
However, now the deal is signed, there is much chatter about whether or not the government was forced to make big promises to the Japanese firm and its Chief Executive Carlos Ghosn to ensure that the models are made in the UK.
Greg Clark, the business secretary reportedly wrote to bosses at Nissan to tell them that the government will do all it can to assure that its UK business will “remain competitive” after Britain leaves the EU, according to a story in The Times on Friday morning.
The newspaper reports that Clark’s letter has been interpreted by Nissan as “a promise that it will not have to bear the cost of punitive tariffs on car exports if Britain leaves the EU customs area without a free trade agreement in place.”
“While the government’s letter makes no specific mention of insulating the company from potential extra costs, it includes an assurance that Nissan will not lose out as a result of Brexit,” the story from Oliver Wright and Sam Coates says.
The Department for Business, Energy and Industrial Strategy has declined to comment on The Times’ story, but on Question Time on Thursday, Clark said that no “cheque book” had been involved in the deal. “There’s no cheque book. I don’t have a cheque book,” he said. Essentially, Clark denied that the government has offered Nissan state aid, or any kind of financial assistance.
“The important thing is that they know this is a country in which they can have confidence they can invest. That was the assurance and the understanding they had and they have invested their money,” Clark added on the late night political debate show.
Senior Nissan employees have also denied a sweetheart deal of any sort, with Colin Lawther, a senior executive at Nissan Europe telling the BBC that the company had received “no special deal”.
“It’s just a commitment from the government to work with the whole of the automotive industry to make sure the whole automotive industry in the UK remains competitive,” he said.
“We would expect nothing for us that the rest of the industry wouldn’t be able to have access to. We see this as a whole industry thing, not a Nissan thing.”
Fears about Nissan scrapping its investments in Sunderland — which voted almost two thirds for Brexit — grew in late September after Ghosn warned that he couldn’t “wait until the end of Brexit” to decide on investments in the plant.
“If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government,” Ghosn told reporters at the Paris Motor Show.
“You can have commitments of compensation in case you have something negative. If there are tax barriers being established on cars, you have to have a commitment for carmakers who export to Europe that there is some kind of compensation.”
It appears that in some way or another, that “deal with the UK government” has now been struck.