Where are those blue-skyers who keep saying there’s nothing to worry about and the UK won’t lose any business because of Brexit?
I’d like to see how they explain this away.
Japanese car-maker Nissan is set to abandon its plans to build its X-Trail model at its Sunderland plant, according to reports.
The company is said to have performed a U-turn on its intention to build the car in the northeast less than two months before Britain is set to leave the European Union, amid increased Brexit uncertainty.
Nissan boss Carlos Ghosn received assurances from the prime minister that the carmaker would be shielded from the impact of Brexit [Montage: FT/Getty].
It’s looking as though Anna Soubry was right and Nissan was indeed offered a ‘sweetener’ deal to stay in the UK after Brexit.
It seems certain that other firms will rush to secure similar assurances – that would leave the Treasury, and the hard-working UK citizens the Tories are so fond of praising, seriously out of pocket.
It seems the Conservative Government under Theresa May is unsafe wherever it goes.
If it denies any further ‘sweeteners’ to other multinational firms, they may pack their bags and head for the continent.
If it gives in, then not only will it seem weak but it will also create a spending commitment that taxpayers will struggle to meet.
So a deal that the Tories were touting as a huge victory only two days ago now stands revealed as a monumental mess.
Still, it’s a rosy result for Nissan and company director Carlos Ghosn, who will build two new models at a plant in Sunderland from 2019.
These are the X-trail and the Qashqai – although Mr Ghosn may wish to consider renaming the latter.
In the light of recent events, ‘Cash Cow’ seems more appropriate.
Nissan warned the British government that the carmaker would wind down UK operations if it was not guaranteed competitive trading conditions with Europe, according to two people involved in negotiations over future investment in its Sunderland plant.
During talks that led to a meeting between Theresa May and Nissan chief Carlos Ghosn, the Japanese carmaker said it was prepared to shift production to its Spanish and French factories in a move that would lead to the closure of its British plant and other UK sites.
Government assurances offered to Nissan led to its decision this week to locate two new cars at the plant from 2019, safeguarding more than 30,000 jobs at the site and in its supply chain.
Sunderland’s closure would have caused a political tidal wave and set a precedent for other carmakers to locate future work outside Britain.
Rival carmakers are now demanding the same assurances offered to Nissan to shield them from the impact of Brexit. While technology and pharmaceuticals companies are prioritising visas for skilled workers, other exporters including chemicals manufacturers have set tariff-free access to the EU as a priority.
The prime minister’s office faces calls from Labour to disclose details of its exact pledges to Nissan, including the contents of a letter written by Greg Clark, the business secretary, to Nissan’s executive committee in Japan.
According to several people familiar with the contents of the letter, it contains the same assurances that were offered to Mr Ghosn by the prime minister — namely that the carmaker would face no change in its trading conditions following Britain’s exit from the EU.
The production line was stopped at 11:00 BST on Thursday so workers could be told about the decision [Image: Getty Images].
Here’s another chance for Theresa May’s Tories to tie themselves in knots.
The car manufacturer Nissan announced yesterday (Thursday, October 28) that it will remain in the UK post-Brexit, meaning more than 7,000 jobs at its Sunderland plant are safe and it will manufacture two new models there.
But was it offered a ‘sweetheart deal’ to stay? Business Secretary Greg Clark says no.
“There’s no cheque book. I don’t have a cheque book,” he said on the BBC’s Question Time.
“The important thing is that they know this is a country in which they can have confidence they can invest. That was the assurance and the understanding they had and they have invested their money.”
Was he lying, though? According to The Guardian, “Greg Clark reportedly gave a ‘last-minute written promise’ to Nissan to protect the company from the consequences of Brexit, in a pledge that will fuel Labour’s demand for the government to publish any private guarantees.”
And fellow Tory Anna Soubry indicated her own conviction that a ‘sweetener’ had been applied. The Telegraph reported: “She said she had met Nissan on June 30, a week after the Brexit vote, and that the company expressed ‘profound concerns’ about tariffs.
“She told BBC Radio 4’s World At One: ‘They didn’t give the detail of what they wanted, they made it very clear that without a guarantee that they would not be subject to tariffs or if they were subject to tariffs the Government would do something to mitigate the damage of tariffs… that without that, they told me, my understanding actually was that they would go to Renault because they clearly had the capacity there.’
“On the assurances that helped Nissan decide to build its next-generation Qashqai, and add production of the new X-Trail model, at its Sunderland plant, Ms Soubry said: ‘I don’t know what it is but I would be very surprised if there hasn’t been some sort of guarantee to mitigate any tariffs should they be imposed.'”
Just to muddy the waters, though, it seems Nissan never had any intention to leave – according to right-wing gossip-monger Guido Fawkes’ blog, which stated in May: “Nissan are on the record saying they won’t leave Britain post-Brexit and have been at pains not to scaremonger about the referendum. So they were a bit put out by Anna Soubry using their reception in parliament last night to preach doom on their behalf. The event had nothing to do with Europe, but Soubs misjudged the tone and told guests how leaving the EU will cause a ‘disaster for manufacturing’ and result in ‘an immediate 10% tariff on Nissan cars’.”
Now she pops up again, again talking about tariffs. And we have no guarantee that Nissan meant what it said before the referendum; it could have been angling for a ‘sweetener’, even then.
And a ‘quiet’ deal would be handy for the government, if it didn’t want to promise a mitigation deal for every Tom, Dick or Harriet who is now facing a 15% tariff on imports/exports.
Bizarrely, some commenters on Twitter were all right with that:
Foolish question. It's time to keep cards close to chest.
Fight for dignity: When the government announced in March last year that 36 Remploy factories would close, unions campaigned alongside workers in a bid to help them maintain the dignity they keep by holding a job and paying their way.
Employees at the Marine and Frontline Textile factories at Leven, Cowdenbeath, Stirling, Dundee and Clydebank will be thrown onto the dole, albeit with help from the government’s funded package to help them get into mainstream employment.
We have no idea how well this package works, despite its having been in use since March last year, when Maria Miller announced the government was closing 36 of what were then 54 Remploy factories. A BBC article in May stated that the DWP was “aware of” 351 former employees who have found new jobs – fewer than a third of the laid-off workforce. We don’t know whether any of those jobs were a result of help from the government package.
Also facing the dole are disabled workers at Packaging factories in Norwich, Portsmouth, Burnley and Sunderland, bringing the total number of job losses up to 234.
Employees were well aware of the situation – an announcement before Christmas made it clear that 875 jobs were at risk, on top of the 1,700 axed in March last year, with only an automotive business and (ironically) employment services remaining safe.
The Frontline and Packaging factories were slated for closure then, and the marine textiles business was described at the time as making “significant losses” despite an established market position. It was not considered sellable as a going concern.
It was, therefore, surprising to hear Esther McVey say, in a statement today, that there had been “considerable interest” in the Scottish factories.
She went on to say Remploy “did not receive a Best and Final Offer for these businesses as part of the commercial process”. Why not?
And she added that there were no viable bids for Packaging. This implies that there were bids, and begs the question: What was wrong with them?
That question becomes urgent when one considers the following, again from Ms McVey’s speech: “Businesses like textiles which didn’t have commercial interest and closed afterwards re-opened as social enterprises or new businesses, and in fact nine sites have been sold on that basis. This has resulted in employment opportunities for original employees.
“For example, businesses have opened under new ownership in the Bolton and Wigan factory premises, who are looking to create up to 35 job opportunities for disabled people, including former Remploy employees.
“In addition Remploy have confirmed already they have received an asset bid from a Social Enterprise organisation for the purchase of assets from within the Textiles business. This may have the potential to create employment opportunities for disabled people.”
If that is the case, they why has the government not considered restructuring the businesses along these lines, and leaving them to the employees – to manage as they will?
After all, according to the same government which is planning to close these factories without having considered this way forward for them, “Employee-owned businesses enjoy greater staff retention, innovation and motivation than non-employee owned businesses and, in turn, these deliver wider economic benefits including increased productivity, profitability and more resilience to economic shocks”.
All of the above makes it very hard to believe another statement made by Ms McVey: “We have always made it clear that this is about supporting the individuals in the factories, and disabled people across the country. £50 million was going into funding failing factories which meant £50 million not available to support disabled people across the country.”
Unfortunately for her, we know that this government has been cutting support for the disabled, partly by refusing them benefits, pretending that they are lying or deluded about their disabilities.
And her claim that, “As announced in the Spending Review, the Government further committed to continuing to support disabled people to move into, remain in, and progress in work” rings hollow when one considers the appalling result of the government’s work programme for people on Employment and Support Allowance.
It managed to hit only one-third of its target. Only 5.5 per cent of people on ESA were moved into employment via the work programme, compared with an expectation that 15 per cent of them would have, if they had been left to their own devices (the targets are based on numbers of people who would otherwise get work, plus 10 per cent. The work programme’s result – 5.5 per cent – is significantly lower than its target of 16.5 per cent).
All of this, coupled with the possibility of Scotland seceding from the Union after next year’s referendum, points to the possibility that the Conservatives are using Remploy as one last, great act of spite for our cousins north of the border.
I would just like to make it clear that this has nothing to do with me. I neither support nor condone it and I think more could have been done to find a fruitful way forward.
Scottish people always saw through the Conservatives – look at the way they reacted to the imposition of the Poll Tax, back in 1989 or thereabouts.
I fear for the rest of the UK if we should lose that perspective after the referendum.
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.