Nissan has announced the new Quasqai is to be built in Sunderland (HERE) which is fantastic news for the worker and the country. However, questions are being asked about how the government did it and Nissan are saying they haven't got a special deal (HERE).
But newspapers think there is something here because the business minister refused to answer the question six times on The World at One (HERE) and this morning The Times is claiming a last ditch deal was done to protect Nissan (HERE) from punitive tariffs and this has been promised in writing. This seems to be right. Let's look at the timeline: Nissan say no new investment unless they get tariff free access to Europe or compensation. Greg Clark flies to Japan to meet Nissan executives. Nissan announce new investment. Government say they have given "support and reassurance".
Now there is speculation that other car manufacturers will have to have the same reassurance and questions are being raised about how much this might cost (HERE). Jonathan Portes at the NIESR Blog (HERE) has a long piece about this and quotes Reuters:
Britain has given Nissan a written commitment of extra support in the event that Brexit reduces the competitiveness of its Sunderland plant, in return for new production investments by the Japanese carmaker, a source with knowledge of the matter told Reuters. In addition to unconditional investment aid, Britain pledged in a letter to offer further relief if the terms of Britain's European Union exit ended up harming the plant's performance, the source said.
State aid is regulated under EU law and they would take a dim view even after Brexit about allowing the import of goods which are state subsidised - even the WTO rules forbid this kind of thing as Phillip Inman points out (HERE).
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