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Secret deal for North East economy

Posted by
24 Nov 2016
With the announcement of Nissan’s extra investment and bill of confidence in the North East, a row has erupted over allegations of a secret deal promising support from the government.

After the Brexit vote, the Japanese company raised major concerns that the decision could cut it off from other European markets, with the consequence of majorly reducing investment. With a factory employing 7,000 staff in the North East and 30,000 in the supply chain, this understandably raised concerns with the local community.

Many people, myself included, were bracing themselves for bad news when the announcement was due, so it came as a very welcome surprise when Nissan confirmed it “will continue to invest in Sunderland”.

This investment is set to be in the region of £100 million, with the building of the new Quasqai and latest X-Trail models securing the livelihoods of all 7,000 employees and affiliates.

This is a great relief and vote of confidence for the region’s industry which has not had the best time of late, however some have thrown into doubt how this decision was made with such uncertainty surrounding the UK’s markets.

Nissan’s boss Carlos Ghosn was invited to a private meeting with Theresa May at Downing Street before the announcement and left feeling “confident”, leading people to question just what had been said behind closed doors?

Further suspicion was raised when Ghosn said “The support and assurances of the UK government enabled us to decide that the next generation Qashqai and X-Trail will be produced at Sunderland. I welcome
Theresa May’s commitment to the automotive industry in Britain and to the development of an overall industrial strategy”.

Although this may seem like positive news, the terms of support have not been announced, leading to John McDonnell, Labour’s Shadow Chancellor, to brand the talks as a “secret deal”.

He went on to describe the post-referendum strategy for the industrial sector as “chaotic”, adding that “you can’t go around the country doing secret deals”.

An industry expert at Aston University added to the questionable meeting saying “We don’t know what deal has been done to secure investment…whatever the deal is, other car firms will want similar support”.

This view has been firmly denied by No.10 and that they will not be offering any extra financial support to Nissan in the event of Brexit having an adverse effect on the company. It has since been revealed that
the government is offering extra support to the automotive industry as a whole by encouraging investment in research and development of greener vehicles and improving manufacturing skills.

With many people in the North East depending on large foreign business employment and investment, whatever talks went on to convince Nissan to remain within the UK have obviously worked and the region will breathe a sigh of relief. This being said Hitachi, another large Japanese employer in the North East, were vocal about keeping the UK within the EU and the adverse effects a vote out would mean. I hope along with many others that they can be convinced to remain committed to the region.

With half of all Japanese investment into the EU currently going to the UK, most of which within the North East economy, I hope the decision by Nissan can give other foreign investors some direction.
I’d love to hear your thoughts on how you think the North East Region can adapt to Brexit. Leave your thoughts in the comments section below. Alternatively, you can contact be for a further discussion by emailing adam.burgess@sellickpartnership.co.uk or call 0191 261 8585.
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