Nissan in Sunderland — House of Lords, 2019-02-05
Topic: Macroeconomics
Christopher Fox (Liberal Democrats, Centre to centre-left): My Lords, I too thank the Minister for repeating the Statement. Just over a year ago Secretary of State Greg Clark launched the automotive sector deal. Things were a bit different then: in a confident, upbeat foreword, he said that, "the government is investing in a new industry-led programme to raise the competitiveness of UK suppliers to match the best in Europe" Today’s Statement underlines how much things have changed. How can the Government claim to be raising competitiveness when uncertainty and delay make it impossible for businesses to plan and invest? Nissan’s comments underline its struggle to plan ahead. Manufacturers do not even know what tariffs they will face at the end of next month, never mind the supply chain friction that will confront them. They are having to plan shutdowns in April to take stock of the situation. That is hardly raising competitiveness, and it is a key reason why confidence in the automotive industry is plummeting and, as the noble Lord on my right said, investment is halving One of the foundations of the Government’s industrial strategy was to create the best place to grow a business. It is clear that the abject confusion over Brexit and the surrounding discussions is weakening communities and the strategy. As the Minister said, we had confirmation yesterday that Nissan has decided not to build the X-Trail in the UK. However the Minister and the Secretary of State seek to dress this up, that is not a vote of confidence in the Government’s strategy. As the Secretary of State acknowledged, it injects uncertainty into an industry that is very important for the north-east—uncertainty over 7,000 direct-employment jobs and approximately 35,000 in the supply chain In the Statement, the Secretary of State was clear that Nissan had located in the north-east, "having been persuaded by Mrs Thatcher that the combination of British engineering excellence and tariff-free access to the European Union made Britain an ideal location" So, when the chill winds blew in the year before last, the Minister acted fast and secretly to seek to insulate Nissan. In 2016, in order to reassure the company, the Government made a deal, which included public investment of around £60 million, as we heard, and was sealed in a letter that the Government moved heaven and earth not to publish. They cited commercial sensitivity as the reason—until this week, when publishing suddenly suited the Government. I have a number of questions about that letter First, what was commercially sensitive before that is not so now, particularly when the Secretary of State goes out of his way to explain that the funding surrounds the Juke and Qashqai ranges but not the X-Trail? That range will continue, so any commercial sensitivity should surely continue, too. Secondly, and perhaps more importantly, did the Government notify the EU competition authorities about their deal with Nissan? If not, why not? I note that in 2001, some £40 million of support for the production of the Nissan Micra was cleared through the EU. What was different about this support The Minister stated that the Government’s fourth commitment is to the, "strong common ground that exists between the UK and other EU member states" I suspect that we would question that. He also said that Her Majesty’s Government would, "pursue a deal that could ensure free trade unencumbered by tariffs or other impediments" There is no sign that the Prime Minister’s red lines will allow this to happen—and clearly Nissan no longer believes the Government, either. The reduced sector investment tells the same story The prime phrase in all this is "damaging uncertainty". Faith is falling, even in the Minister’s own department. His colleagues in the other place sound increasingly worried about what is going on and whether the right of his party will drive the country over a cliff. Mr Harrington has called no deal a "complete disaster", while Mr Clark warned that a no-deal Brexit would be "ruinous" to the economy. Can the Minister tell us the adjective he would use to describe it?