Fury over £60m government 'Brexit bung' for Nissan after firm cancels car project
3 min read
The Government promised Nissan £60 million in taxpayers' cash to build two new car models in Sunderland, it has been revealed.
Nissan agreed in 2016 - just months after the EU referendum - to build a number of models in Britain in exchange for the cash for its northern factory, but yesterday announced one of them - the SUV X-Trail - would be manufactured in Japan.
It said the decision was taken for “business reasons” but noted that the ongoing uncertainty around Brexit was “not helping companies like ours to plan for the future”.
The announcement serves as a blow for ministers who had worked to shore up investment in the UK in the wake of the vote for Brexit.
Business Secretary Greg Clark made the deal with Nissan, but a letter spelling out the arrangement was never made public until today.
The letter offered the company £80m in investment, but the Government has since clarified that the final deal was for £61m. It is unclear whether the Government will now ask for the money back.
Mr Clark insisted in the note that car manufacturing would be a “critical priority of our negotiations” with the EU, despite making no specific promise on the UK’s future trading relationship with the bloc.
It said: “The Government fully recognises the significance of the EU markets to your presence in Sunderland.
“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.”
Eloise Todd, the CEO of pro-EU campaign Best for Britain, lashed out at the revelation of the £61m “Brexit bung”.
“The Government have promised and promised to release this letter to Nissan but they couldn't bring themselves to do it and now we can see why,” she said.
“As Nissan make a U-turn and say sayonara to building the X-trail in Sunderland, the Government is left deeply embarrassed. This Brexit bribe has come back to bite the Government.”
'UNCERTAINTY'
Nissan announced on Sunday that the SUV X-Trail model will be built in Japan in a major shock for the north-east region.
It said in a statement: "While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”
Mr Clark - who is among those in the Cabinet urging Theresa May to rule out leaving the EU without a Brexit deal - said the decision was “very bad news” for the economy.
He told the Financial Times that bosses of the car giant had warned a no-deal outcome in Brexit talks was casting a "shadow over their future in Britain".
"They said it was a warning sign," he told the paper.
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