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Nissan assurances over Brexit cannot be published, says business secretary Japanese companies in UK 'already receiving offers from EU'
(about 3 hours later)
The government’s letter to Nissan promising to keep the car industry competitive after Brexit cannot be published because of commercial sensitivity, Greg Clark, the business secretary, has said. Japanese companies based in Britain have already started to receive offers from other European countries and could postpone investment decisions if the government fails to negotiate a close economic relationship with the EU.
He was pressed three times by the shadow business secretary, Clive Lewis, to “show us the letter”, amid speculation it contained promises that could have financial implications for the taxpayer. That was the stark warning of Haruki Hayashi, president of the Japanese chambers of commerce in Britain and the European CEO of Mitsubishi, who said businesses needed more than “general reassurances” if his country’s investment presence in Britain was to be maintained.
But Clark said he had already set out the broad principles of the correspondence, including an aim of negotiating an EU deal for cars that is free of tariffs and bureaucratic impediments. Speaking to MPs in parliament, including the Brexit secretary, David Davis, Hayashi said that in a complex and interdependent world, the decision to leave the EU would have a serious impact on individuals and businesses.
He said it was no sweetheart deal and only contained three commitments to continue funding as well as the promise that carmakers would still be competitive when the UK leaves the EU. Speaking after it emerged that the government had written to Nissan to promise it would remain competitive following the Brexit process, Hayashi emphasised the importance of factors such as membership of the single market and customs union. “Some examples of areas of concern of Japanese companies include validity of the single passport system, the free movement of skilled workers between the UK and different parts of Europe and whether the continuation of the current environment of uncertainty will lead the Japanese companies to postpone further investment decisions,” he told a reception organised by the Japanese embassy in London at which dozens of companies were represented.
Labour and the SNP said it was not good enough that parliament was not allowed to see the terms of the deal that enabled Nissan to announce it would boost its production at Sunderland. It could also mean companies would seriously consider relocating to other countries, he added, urging the government to speak to Japanese business figures throughout the renegotiation process. “Some Japanese companies have already started receiving offers from alternative European host countries,” said Hayashi. “I cannot speak on behalf of each individual member of the chamber but the message coming through loud and clear is that more than general reassurances are called for at this stage to ensure that the Japanese investment presence in the UK is not diminished for lack of consultation and information sharing.”
Clark said: “You asked me whether I would publish the correspondence. I have set out the information that I gave them and I would just say this to you. My responsibility, on behalf of the government, is to encourage and to attract investment in this country, and it’s important that when companies of all types and in all sectors share with me their investment plans that are of information to their prospective competitors that they can be assured that they are not going to be disclosed to their competitors to their disadvantage.” His comments came alongside a warning from Koji Tsuruoka, the Japanese ambassador to the UK, that his government could not instruct companies over their decisions, as they were private entities. But he said the Japanese were willing to engage in “periodic meetings with the UK” through the Brexit process, stressing that the embassy was informing the Japanese government in Tokyo about what was happening in Britain on a daily basis. “Of course Japan will not sit at the negotiating table,” he said, but warned that it was a “very major stakeholder”.
Lewis said it was not good enough for the cabinet minister to “ask people to believe that Nissan is risking millions of pounds of investment and the success of its newest models on the basis of the government’s good intentions alone”. The strong interventions came as the business secretary, Greg Clark, claimed the government’s letter to Nissan cannot be published because of commercial sensitivity. He was pressed three times by Labour’s shadow business secretary, Clive Lewis, to “show us the letter” that persuaded the company to boost its production in Sunderland, amid speculation it could have financial implications for the taxpayer.Clark said he had already set out the broad principles of the correspondence, including the aim of negotiating an EU deal for cars that is free of tariffs and bureaucratic impediments. He insisted it was no sweetheart deal and only contained three commitments to continue fundings as well as the promise that carmakers would still be competitive when the UK leaves the EU.
“If you didn’t offer Nissan a sweetener, then what have you got to hide? Show us the letter,” he said. “My responsibility, on behalf of the government, is to encourage and to attract investment in this country. And it’s important that when companies of all types and in all sectors share with me their investment plans – that are of information to their prospective competitors – that they can be assured that they are not going to be disclosed to their competitors to their disadvantage,” he said.
A string of other MPs including Hilary Benn, the new chair of the Brexit committee, Ed Miliband, the former Labour leader, and Andrew Tyrie, the Tory chair of the Treasury committee, pressed Clark for more details. However, Lewis said it was not good enough for the cabinet minister to “ask people to believe that Nissan is risking millions of pounds of investment and the success of its newest models on the basis of the government’s good intentions alone”. “If you didn’t offer Nissan a sweetener, then what have you got to hide? Show us the letter,” he said.
In his answer to Tyrie, Clark gave his strongest hint yet that the government would be seeking to stay in the customs union for the automotive sector at least. The issue has caused controversy over fears that other companies and industries will now be lining up for similar reassurances from government.
Asked whether his reassurances amounted to staying in the customs union, Clark answered: “This goes beyond any discussions I’ve had with any company. But it seems to me, why would you not aim as a matter of negotiations to avoid bureaucratic impediments. That seems to me common sense.” Hayashi pointed out that a survey of the Japanese chamber of commerce members in October, before the referendum, found that 96% backed Britain remaining in the EU, while 4% expressed no view.
When Benn pressed him on whether the UK would offer tariff-free access to all other parts of industry, Clark said it was only an ambition rather than a certainty that this would be achieved for carmakers in talks with the EU. He said that despite the clear view, which was still held, there was a desire to respect the democratic vote and “face the reality and get on with our lives - together with our trusted partners in the UK”.
“It is not in my gift to offer tariff-free access to the single market. What I was describing was what would be a positive outcome from the negotiations and therefore the demeanour we should take,” he said. But he said that the Japanese government had taken the exceptional decision to voice the concerns of businesses in the UK. He said the message was a friendly one to a strong Japanese partner but added: “I am confident that this statement helped convey the seriousness of the Japanese business community.
In another answer, Clark appeared to signal that the government wants different deals for different sectors of the economy. “Why are we so serious? Well because of the exceptional bilateral relationship we built over 400 years nurturing trust and common understanding towards the people, lives, culture, sustainable business practice here that requires.”
“It seems to me that the approach – not only that I intend to take, but that I am already taking – with the firms that are in our economy is to take time to meet them to understand the different needs of different sectors, so that we can be informed by them, as we form our negotiating mandate. It will be different from sector to sector. That’s obviously the case.” Clark faced questions from a string of MPs including Hilary Benn, the new chair of the Brexit committee, Ed Miliband, the former Labour leader, and Andrew Tyrie, the Tory chair of the Treasury committee, who all pressed him for more details.
On Sunday the former deputy prime minister Nick Clegg said in a letter to Clark that such an approach could cost the taxpayer a “colossal amount of money” as a patchwork of carve-outs, subsidies and sectoral arrangements would create winners and losers. In his answer to Tyrie, Clark gave his strongest hint yet that the government will be seeking to stay in the customs union for the automotive sector at least. Asked whether his reassurances amounted to staying in the customs union, he answered: “This goes beyond any discussions I’ve had with any company. But it seems to me why would you not aim as a matter of negotiations to avoid bureaucratic impediments. That seems to me common sense.”
When Benn pressed him on whether the UK will offer tariff-free access to all other parts of industry, Clark admitted it was only an ambition rather than a certainty that this will be achieved for carmakers in talks with the EU. “It is not in my gift to offer tariff-free access to the single market. What I was describing was what would be a positive outcome from the negotiations and therefore the demeanour we should take,” he said.In another answer, Clark appeared to signal the government wants different deals for different sectors of the economy.