Nissan announcement – did May promise any cash for Qashqais?

At the end of the day, we’re all Brits together. I rejoice that Nissan have announced the production of the new Qashqai and X-Trails at Sunderland.

Tim Farron has commented:

The commitment to Sunderland by Nissan is obviously very welcome. Ensuring that jobs are protected at the plant is vital for Sunderland and our economy.

However, it is utterly ridiculous that Theresa May is having to give special assurances to key manufacturers in order to deal with the Brexit fallout her government is creating.

What happens when other car companies come asking for special treatment? What about our other major industries – will they also be given protection? And what about the millions of small businesses who are being hit by a collapsing pound and severe economic uncertainty?

If the government was serious about protecting jobs in the UK, it would be fighting to remain part of the Single Market.

Downing Street vehemently denies any “sweetheart” deal with Nissan.

Let’s take their denial at face value and imagine what Theresa May said to the Nissan boss when she met him. I am sure it was minuted by Sir Humphrey.

She probably gave him her usual blather about “unique agreement” and “best deal for Britain” blah blah blah.

It which case, one suspects there is a sharp contrast between Mrs May’s blather, both public and private, and what seems to be happening in her government – a race to the bottom, a crazy all-out stampede for the hardest of hard Brexits.

One wonders if Nissan bosses will have some cause for complaint in future?

* Paul Walter is a Liberal Democrat activist. He is one of the Liberal Democrat Voice team. He blogs at Liberal Burblings.

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31 Comments

  • Vince Cable thinks Nissan have been given an assurance that we are staying in the customs union. So not only can we rejoice that Nissan workers will have a job we can also rejoice that Liam Fox doesn’t.
    Vince Cable: assurances to Nissan means UK will stay in customs union

  • Eddie Sammon 28th Oct '16 - 3:17pm

    I think this is great news for Sunderland and good news for the UK. Yes, it might be expensive, but if anything it is radical keynesian economics.

    The alternative is staying in the EU, which the public don’t want, is a bit of keynesian economics, so I think the moaning about this deal has been a mistake.

    Yes, the public should know what has been promised, but it shouldn’t be looked upon with suspicion. John McDonnell has sounded like one of those tight-fisted accountants in the City that he so detests, in a desperation to land a glove on Theresa May. Yes, he welcomes the deal, but there’s too much moaning.

  • No money; no ‘sweetheart deal’….Oh, dear….

    Nissan was THE test case of ‘Brexit’….Do you really believe that, even if a blank-cheque had been left on the table or a truckload of cash had pulled up in the yard, either side would have admitted it?
    There may well be millions of those in receipt of benefits (both working and unemployed) who will find THEIR living standards adversely affected if ‘subsidising such high profile jobs’ with taxpayer’s money becomes the norm…

  • Tim Farron: “However, it is utterly ridiculous that Theresa May is having to give special assurances to key manufacturers in order to deal with the Brexit fallout her government is creating.”

    I don’t know why Tim Farron would say such a thing. Short of ignoring the referendum result, there is absolutely nothing the government could have done between June 23rd and now to avoid us being in the current state of uncertainty. The “Brexit fallout” has been created by the electorate, not the government. Even if May had gone to the EU on June 24th and said “please let us stay in the single market – we’ll accept freedom of movement and everything else”, does Tim Farron believe the EU would have agreed to that by now, or indeed ever?

  • What did they promise Nissan? I’d suspect the answer is anything they wanted, so much for taking back control; taking back the control to give multinationals anything they want or desire.

  • Eddie – what are you talking about when you say “it might be expensive”? You have no idea how much May’s promise to Nissan will cost yet still its great news?

  • Eddie Sammon 28th Oct '16 - 6:44pm

    Alistair, I do have an idea. WTO terms mean approximately 10% import tariffs so if it is to compensate a 5% reduction in demand for Nissan cars made in Britain then that will be the price. Seems less than allowing the factory to close.

    Liberals against intervening to save Sunderland are sounding like Thatcher in the 80s who thought the north should just rot.

  • Downing Street vehemently denies any “sweetheart” deal with Nissan.

    Well it has to, because currently, we are members of the EU and hence any “sweetheart” deal would count as state aid. Interestingly, the EU could investigate, just to confirm there really hasn’t been any state-aid… :0

  • Barry Snelson 28th Oct '16 - 7:22pm

    I suspect it’s desperation of the form – “We are so confident that we will have all the privileges of the single market, thanks to our peerless negotiating prowess that of course we will pay any duties which would otherwise be levied. That won’t happen as Liam, David and Boris are men of superhuman stature”.

    By the time this plays out the current contribution to the EU will look like chicken feed.

    It is interesting that the Express and the Mail (which should be trumpeting this great Brexit triumph) are strangely silent.

  • I’m sure Barry has called it correctly. In the event of tariffs being applied, the UK will compensate Nissan for duty payable on import into the EU. So UK taxpayers money will flow to EU governments. Oh, the irony……..

  • Barry,

    The Mail have an article about it, hidden away the headlines says it all

    ‘Is bribes the new strategy?’ Business Secretary Greg Clark comes under mounting pressure to reveal what was in the last-ditch ‘secret deal’ that kept Nissan in the UK

    http://www.dailymail.co.uk/news/article-3881692/Ministers-sent-ditch-letter-promising-protect-Nissan-Brexit-costs-face-calls-reveal-details-deal-kept-car-maker-UK.html

    Top rated comment is

    Promises of single market, or promises of envelopes stuffed full of cash?

    Says it all really 😉

  • Stevan Rose 28th Oct '16 - 8:59pm

    We import more cars than we export. Tariffs with the EU mean domestically produced cars are relatively cheaper compared with Renault and VW and Ford. If we are outside the EU it makes sense for car makers to set up plants here and increase domestic production. We will also be able to choose to purchase only domestically produced vehicles for the public sector instead of having to allow EU producers to tender.

    Whatever happens it is in Nissan’s interests to stay here. It doesn’t need sweeteners or pointless speculation.

    “the UK will compensate Nissan for duty payable on import into the EU”

    Let’s assume they do. Funded by the duty collected on car imports from the EU. Net profit for the UK taxpayer. I’d be inclined to ask the EU for access payments if they want free trade with the UK.

  • Stevan :
    Supply chains are very lean and very international. Throw spanners into them, like tariff and especially non-tariff barriers and they will seize up.

    From an article in the Guardian two years ago:
    “Just 40% of components (by value) of British-made cars are UK-sourced, whereas 60% of components in German and French cars are homemade.”
    Amongst the world’s 50 largest auto-parts firms, only one is British, in 34th position. 10 German, French, Spanish, Italian and Swedish suppliers are ranked higher, including Bosch at no. 1. We simply do not have the technological skills, installed capital base or culture suddenly to transform ourselves into a productive economy and overturn our impressive trade deficit.

    So, to quote a comment I contributed to an FT article, a hard-nosed businessman like Carlos Ghosn would not have been bought off by anything less than a dazzler of a cast-iron deal. And of course, it won’t just be to the Renault/Nissan group. The government, having determined the referendum gives it the right to rule by decree, has decided it can gift whatever it likes to whomsoever it chooses. In secret.

    Presume not to question. It is called Royal Prerogative and Honi Soit Qui Mal y Pense.

  • David Pocock 28th Oct '16 - 10:57pm

    Not got a problem in principal with subsidises. I do have a problem with the increasingly common practice of not telling the tax payer where their money is going.

  • If it’s not a unique deal for Nissan – which would be hard to justify on grounds of fairness – it’s likely an undertaking has been given to reduce corporation tax : I.e. The general public taxpayer will see a shift in taxation in favour of big business and there will probably be welfare and public sector cuts too. The secrecy will be to do with budget confidentiality.

  • May simply had to get Nissan to agree to stay in Sunderland or support for Brexit would have started to fall very fast as the public tumbled just what a fantasy it is.

    Nissan would have known that and would have got their pound of flesh accordingly so I’m very sure that the government promised something – but what? No doubt the Sir Humphreys will have concealed it well but it’s crucial to find out because the more is revealed about what Brexit really means the more it will be exposed as a fantasy.

    It may be as Barry says that the Brexiteers are super confident they can do a deal but that flies in the face of Cameron’s pre-referendum experience of negotiating with the EU ( a big fat fail) and also their subsequent insistence that the single market is indissolubly comprised of free movement of goods, services, capital and people and not a la carte selections of these. Try as I might I can’t see that the UK has any leverage to move the EU on this.

    If there is no deal then what? Subsidise by, say, 10% to compensate for tariffs? That would itself surely break WTO rules and in any case how could subsidies be afforded? We export getting on for £600 billion per year so at 10% that could be a bill of nearly £60 bn. Voters are already discovering that they are getting poorer as the exchange rate feeds through into higher prices but that is as nothing compared to what is to come. The devil is, as always, in the detail; let’s out him and see how popular Brexit is then. In time the fallout from this is going to destroy the Conservative party.

  • Eddie Sammon 29th Oct '16 - 2:40am

    If the possibility of brexit is a fantasy then we are not free. It needs to be an option and we skillfully need to work our viable alternatives to EU membership, especially after a democratic vote to leave!

  • David Pearce 29th Oct '16 - 7:02am

    Its a good government plan. A firm but vague assurance. Consider how this may play out. There could be no need to do anything because the economy does well. The economy might do not so well, and there could be some modest sweetners for car companies, nothing too expensive. The economy could do really badly, in which case the government just reneges on the vague promise. There would be nothing to lose by then in terms of credibility.

    May cannot afford to have any car company announce it is going abroad right now.

  • Eddie, no offence but I dont think you understand… The government cannot single out one foreign owned company to receive state aid – it would be wrong on many levels. So the kind of guarantee you are thinking of would have to extend to other carmakers. If it were a lump sum per car then that a level that would cover a 10K supermini wouldnt help JLR much. I am very much in favour of keeping manufacturing in UK but Im not in favour of the Tories picking out say, one manufacturing industry and one services industry – Banking for the sake of argument- and leaving the rest of us to swing. Brexit is a multidimensional car crash and the Tories are consistently making secret and conflicting promises that cannot be kept.

  • As I’ve posted elsewhere, I expect Tata, Airbus, GKN etc. to be parading through Downing Street with their hands out.

    Of course Nissan shouldn’t get a special deal not available to others. Likewise, why should just major multinationals be protected from any Brexit downside? What about thousands of SMEs who don’t have any political clout and can’t get a personal meeting with May?

    They collectively employ more British workers than the multinationals do. But a steady drip of 5 or 10 job losses here and there is politically survivable. Thousands of job losses in one go in Sunderland would be fatal.

  • Eddie Sammon 29th Oct '16 - 12:57pm

    Hi Alistair, I understand the problem with state aid rules but we offer industry specific reliefs and incentives all the time. This has not only led to Nissan staying but also investing more.

    Perhaps I’m letting my emotions about helping the workers in Sunderland get to me, but I think something can be done without it being too expensive. Maybe a soft brexit will mean everything will be broadly OK.

  • On the Andrew Marr show Greg Clark (the business secretary) said he wrote to Nissan with a series of four assurances as he went “all out” to allay concerns about Brexit and convince the company to build its next two models in Sunderland. According to Clark he told Nissan the government was confident of getting a deal that would mean the whole car industry remained competitive..The only way that will happen is by the UK seeking a free trade relationship similar to the single market and customs union.

    A couple of days ago we were told that Britain was going to “trade freely with the World”, and now we are apparently going to stay in the Single Market/Customs Union, which means the EU decides who we trade with.(One of the consequences of the customs union is that the European Union negotiates as a single entity in international trade deals such as the World Trade Organisation, instead of individual member states negotiating for themselves.)

    At the same time, Theresa May has said she wants greater immigration controls and freedom from the oversight of the European court of justice; a combination of aims that Brussels politicians have repeatedly said is unachievable.

    Confused? I am…

  • John Peters 30th Oct '16 - 5:40pm

    @expats

    I’m not surprised you are confused.

    I don’t see how you get from

    “According to Clark he told Nissan the government was confident of getting a deal that would mean the whole car industry remained competitive”

    to

    “The only way that will happen is by the UK seeking a free trade relationship similar to the single market and customs union.”

    Do you mean that’s the only way that you can understand?

    Perhaps you are interpreting a politician’s words incorrectly?

  • Eddie, of course I want car manufacturers to stay. But which industry do you propose to tax more to pay for sweeteners. Most of my job roles in the last 20 years relied on my ability to work without restrictions around Europe, which is likely ended. Or perhaps you think schools or hospitals should have cuts to pay Nissan. Soner or later May and her merry band must come clean. Incidentally the independence of the BoE is now at stake. There is no meaninful opposition. Nissan in the greater scheme of things is a sideshow.

  • Eddie Sammon 30th Oct '16 - 10:34pm

    Hi Alistair, I don’t support taxing anything more, I support taking more risk through borrowing. If that fails then we will have to tax the rich more and cut costs where we can. I don’t support such deals for all industries. I think supporting good jobs in the North East is a bit more vital to supporting them elsewhere.

    Regards

  • John Peters 30th Oct ’16 – 5:40pm….

    Ref. my “single market and customs union.” post…Vince Cable, who I suggest has rather more experience in these matters than you or I, seems to think so too…

    Unless you believe that the rest of British exporters will be left to sort things out themselves how else will we get unrestricted access to the EU?.

  • @expats

    I’m sure Vince Cable is more knowledgeable than me in this and many other areas.

    But he is a politician, so he will carefully say what he thinks his supporters want to hear, without actually saying anything at all.

    Just like Clark telling Nissan the government was confident of getting a deal that would mean the whole car industry remained competitive. It’s a statement without substance.

  • So the take away message from Liberal Democrats is :

    Yes ~ : to continue pumping £19 billion per year into a layer of EU governance that was not wanted, and that was roundly rejected on the 23rd of June.

    No ~ : to helping the working people of Sunderland and UK industry generally.

    So in short, Liberal Democrats give the ,…thumbs up for the political class,… and the middle finger to the working class.? Nice one.

  • Eddie Sammon 31st Oct '16 - 1:04pm

    Hi Mark, I realise it is a strong argument for staying in the EU, but until or unless the public start showing more regret then it isn’t really a realistic option.

    Let’s see how the brexit negotiations pan out and what the offer on the table is.

  • John Littler 31st Oct '16 - 4:46pm

    At this raw early stage, there is no way that May could have been see to risk allowing Nissan to start a stampede of industry, out of the UK. They would have thrown the kitchen sink at Nissan to get them to commit to remaining.
    As Cable said, Nissan would not make huge investment decisions based on warm words. There would have had to be substance and 10% tariffs into the EU, their target market, would have wiped away the profit margin. It must have been remaining in the customs union with a back up of compensation if we should be refused.

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