Government Admits Nissan Was Offered A Massive Brexit Handout

By Holly Brockwell on at

Nissangate continues with the news that as previously suspected, the government had offered Nissan a huge pile of cash to manufacture its new car in the UK.

The car company recently cancelled its plans to manufacture the new X-Trail SUV at its Sunderland plant (as well as at the Kyushu plant in Japan). Instead, the car will be solely manufactured at Kyushu, meaning the investment and jobs the North East would have received as a result of the move are now not happening.

We now know, after an embarrassing admission by Business Secretary Greg Clark, that Nissan had been offered a package of government perks worth up to £80m. This contradicts the government's previous statement that "there was no special deal" for Nissan, and Clark's own repeated refusal to admit to the existence of the package.

Clark has now released the four-page letter sent to Nissan in 2016, promising "a package of support in areas such as skills, R&D and innovation" that "could amount to [...] up to £80m." Essentially, despite apparently having no money for trivialities like the NHS and the police force, the government somehow found £80m of taxpayers' money down the back of the sofa to hand Nissan under the table.

The final package was formally agreed in June last year, and the total ended up at £61m. The condition was that Nissan manufactured the X-Trail and the Qashqai here, and continued to do so after Brexit. We now know the X-Trail won't be manufactured here after Brexit (though the Qashqai should continue to be), yet Nissan has already pocketed £2.6m.

While Nissan said its decision to cancel making the X-Trail here wasn't because of Brexit per se, it did say that "the continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future." In other words, it's less than two months til B-Day and we still have absolutely no idea what's going to happen. It's quite impressive that we're now so unappealing as a manufacturing base that a company would turn down sixty million pounds rather than make its new product here.

It probably isn't a coincidence that Japan, where the car will now be made, has just signed a free-trade agreement with the EU.

Just to rub salt in the wound, Nissan might actually still get the rest of the money. Greg Clark says they'd have to reapply, but presumably if Nissan says "give us the dosh or we're leaving entirely," it would arrive on a velvet pillow sealed with a kiss.

Clark has also used the opportunity to speak out against leaving the EU with no deal:

"No-deal is fully acknowledged, certainly by me and the industry, as being ruinous for our prospects. But in order to avoid no-deal, we need to come to an agreement in this house."

Louder for the MPs in the back.