Nissan in Sunderland

Rebecca Long Bailey Excerpts

Monday 4th February 2019 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

Yesterday’s announcement by Nissan that it has reversed its decision to build the X-Trail at its Sunderland plant and move it to Japan instead is a bitter blow to the north-east, the automotive sector and Britain’s industrial strategy. Of course, Brexit was not the only reason for that, but it was pretty prominent in Nissan’s decision. To quote its initial statement,

“the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”

The Secretary of State’s opposition to a no-deal Brexit is, of course, well known, but still the Government juggernaut chaos hurtles on. Even he must be suitably frightened today by the uncertainty being created by his Government’s negotiating strategy.

This week, Nissan has reversed commitments to invest in the UK. Last week, we saw that car production is down 9% to its lowest level in five years, and fresh investment in the sector halved in 2018, according to the Society of Motor Manufacturers and Traders.

When Nissan made the commitment to produce the X-Trail and Qashqai models in Sunderland, the Government provided certain assurances, as the Secretary of State has outlined. After the Government’s refusals to publish the letter, even in response to freedom of information requests, today we have finally seen a copy. The letter acknowledged the

“uncertainties as the UK prepares to leave the EU”,

and in particular the

“fear that potential future trade arrangements could affect the business case for…investments”,

and it promised that Nissan would not be “adversely affected”.

Although the letter made no firm commitment to a customs union or single market deal, there was a pretty strong assurance that manufacturers would still be able to trade without barriers. However, Nissan clearly does not have any confidence in those assurances today. Can the Secretary of State confirm why those assurances no longer stand and what has changed in the Government’s approach since those commitments were made? Is it now Government policy to accept that there will be significant trade barriers as we leave the EU and potentially a no-deal situation? If not, can the Secretary of State rule out the possibility of no deal?

The letter went on to offer support of about £80 million towards Nissan’s investments at its Sunderland site, in return for the expansion of SUV production. The Secretary of State noted that £61 million was eventually applied for. Can he confirm whether any of the conditions surrounding that £61 million were written into any formal agreement? Can he also confirm whether Nissan will still receive the £61 million, despite the move? He intimated that it may have to reapply for certain forms of grant funding. What assessment has he made of the impact of yesterday’s decision on the wider supply chain, particularly those companies that might already have decided to start investment?

The Government’s letter to Nissan also said:

“It will be a critical priority of our negotiations to support UK car manufacturers, and ensure their ability to export to and from the EU is not adversely affected by the UK’s future relationship with the EU.”

Yet it is important to note that Nissan’s announcement came days after a free trade agreement was signed between the EU and Japan whereby tariffs on Japanese car exports to the EU will begin to taper towards zero over the next 10 years. What assurances can the Secretary of State give today to British automotive sector companies that there will be no tariffs on British-made vehicles entering the EU?

Similarly, in relation to cars exported to non-EU countries where the EU currently enjoys preferential trading terms, the International Trade Secretary has suggested that we can simply replicate those terms and Tipp-Ex out “EU” and replace it with “UK” on the front page of nearly 40 free trade agreements. How is he getting on with that? What assurances can the Business Secretary provide that Britain will continue to enjoy those trading terms?

Furthermore, what assessment has the Secretary of State made of the real risks of a temporary, Brexit-induced slowdown in British manufacturing? Has he examined any temporary support measures he could offer, such as examples in the German industrial sectors following the financial crash?

Finally, it is clear that we have reached a tipping point. I know that the Secretary of State agrees with me that a real industrial strategy is designed to give businesses the confidence to invest for the long term, but his Government’s handling of Brexit is undermining our industrial strategy. Businesses are no longer speaking out simply to highlight the future dangers of a badly handled Brexit; they are now losing confidence in the Government and taking real action to protect their businesses. Without real assurances from the Secretary of State and a firm commitment to take no deal off the table, it is hard not to think that managed decline is indeed the Government’s plan.

[Greg Clark]

If the hon. Lady had spent time talking to employers in the automotive sector, she would have come to a different set of conclusions. First, she should welcome the fact that Nissan has committed to Sunderland. After the referendum, before any negotiations had taken place and even before article 50 was triggered, the plant was in jeopardy, and the workforce, the unions and the Government worked closely and hard together to secure its future. At the time, her former colleague, the then hon. Member for Hartlepool and Chair of the Business, Energy and Industrial Strategy Committee, hailed it as

“a welcome example of targeted Government commitment to a successful company in a strategically vital sector”.—[Official Report, 31 October 2016; Vol. 616, c. 684.]

That commitment continues.

The hon. Lady asks whether the financial support that Nissan applied for continues, and I hope that I was clear in my statement that the support is available to the sector and has been for many years. Nissan will be invited to resubmit an application in the light of its changed investment.

The hon. Lady’s second point is that we need to conclude our Brexit negotiations, but what she spectacularly ignores is that Nissan and the UK automotive industry back the deal that the Prime Minister has negotiated. The deal achieves what they need: no disorderly Brexit on 29 March, a transition period and a commitment to no tariffs, no quotas and no rules of origin checks at the border.

The Japan Automobile Manufacturers Association has welcomed both the withdrawal agreement and the political declaration, and it has called for this House and the European Parliament to ratify the agreement swiftly. If the hon. Lady wants to rule out no deal—if that is her concern and her motivation—she should back the calls from the industry to ratify the agreement.

The continued uncertainty I referred to in my statement, as the hon. Lady will acknowledge, is a reflection, in part at least, on the Opposition’s failure to come to a decision and back the deal. During all Nissan’s 30 years in the UK, it has been able to count on constructive support from all parties, yet Labour Front Benchers have evaded having a policy on this vital issue for our country, hiding behind six tests that are a fake and a sham designed expressly to avoid a deal, and they know it. They claim to represent the workers of this country, but the livelihoods of millions of workers are being jeopardised by the machinations of the people occupying the Labour Front Bench.

In a call from Japan yesterday, a senior Nissan executive told me, “Please pass on the view to your Opposition that they need to meet in a way that forms a deal.” I think all of us in this House should act on that.