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Government offered Nissan up to £80m to build new cars in UK

Time 3 years ago

THE government offered Nissan support of up to £80 million if the Japanese firm built new models at its UK plant, it was revealed today.

Business secretary Greg Clark made the offer in a letter to the then-head of Nissan, Carlos Ghosn, in October 2016, a few months after the EU referendum. The letter has now been made public.

Clark said he wanted to set out ways the government wanted to work with the carmaker ahead of investment decisions it was due to make.


The letter said: ‘As a demonstration of the UK Government’s commitment, we are already working with your UK team on a package of support in areas such as skills, R&D and innovation.

‘Work continues but I understand this could amount to additional support of up to £80 million. You will understand of course that this figure will be subject to business cases being developed, which are independently assessed, and the usual processes of due diligence.

‘It is contingent too on a positive decision by the Nissan Board to allocate production of the Qashqai and X-Trail models to the Sunderland plant. We recognise that the UK has a stake, and we are backing your continued success in Sunderland to the hilt.’

The letter was published a day after Nissan announced it would not be building its X-Trail car in Sunderland.


The company said the decision was taken for business reasons, but made clear that continued uncertainty around the UK’s future relationship with the EU was not helping it plan for the future.

Clark said in his letter: “The Government fully recognises the significance of the EU market to your presence in Sunderland. It will be a critical priority of our negotiation to support UK car manufacturers and ensure that their ability to export to and from the EU is not adversely affected by the UK’s future relationship with the EU.

‘We will set our ambitions high and vigorously pursue continued access to the European market as an objective in future negotiations.’

The development came after union leaders pressed Nissan for guarantees on jobs and future production.

Officials from Unite met with management at the Sunderland plant today and expressed their ‘anger and disappointment’ over how the announcement over future production of the X-Trail was handled.

An offer of grants totalling £61 million was made to Nissan in June 2018, Clark revealed today. He said in a letter to Rachel Reeves, who chairs the business select committee, that a package of support included skills, research and development and innovation.

Clark added that when he appeared before the committee in December 2016, there were aspects of his letter to Nissan that were commercially confidential. ‘Further to my discussions with Nissan on Friday and over the weekend, I understand that the commercial confidentialities for Nissan are now reduced,’ he wrote.

The lower offer followed a review carried out by an independent advisory committee, and it is understood that the government has since said that Nissan must now reapply for the £61m, as it had gone back on its pledge to build the X-Trail in Sunderland.

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MORE: Union presses for guarantees on investment by Nissan

MORE: Nissan takes swipe at Brexit ‘uncertainty’ as it confirms X-Trail Sunderland axe 

MORE: Nissan makes further commitments to Sunderland post-Brexit

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