The Government’s “lack of transparency” over a £61m grant for Nissan must never be repeated, MPs say.
Business Secretary Greg Clark was criticised by the influential House of Commons Treasury Committee over his failure to reveal exactly what the Government promised carmaker Nissan.
He sent a letter to Nissan in October 2016, in what appeared to be an attempt to persuade the Japanese firm to continue investing in its Sunderland plant following the referendum decision to leave the EU.
But Mr Clark refused to publish the letter, saying it contained sensitive commercial details.
Details only emerged this month, after Nissan announced it will no longer be building the new X-Trail model on Wearside.
Nicky Morgan, chair of the Treasury Committee and a fellow Conservative MP, said: “It has now become clear that the Government offered £61m of support to Nissan in April 2018, which was accepted in June 2018.
“At this point, in the interest of transparency, the Government should have informed Parliament about its offer to Nissan. Instead, details were only available on a little-known European Commission website.
“This lack of transparency cannot be allowed to set a precedent. When Parliament shows such a keen interest in a particular issue, the Government has a duty to keep it informed.”
Mr Clark has now written to the Committee to confirm that £61m was awarded from a Government scheme to support industry called the Regional Growth Fund.
How the North East voted in the EU Referendum in June 2016
Newcastle: Remain 65,404 (50.7%); Leave 63,598 (49.3%)
Sunderland: Remain 51,930 (38.7%); Leave 82,394 (61.3%)
North Tyneside: Remain 52,873 (46.63%); Leave 60,589 (53.37%)
Gateshead: Remain 44,429 (43.2%); Leave 58,529 (56.8%)
South Tyneside: Remain 30,014 (38%); Leave 49,065 (62%)
Durham: Remain 113,521 (42.5%); Leave 153,877 (57.5%)
Northumberland: Remain 82,022 (46%); Leave 96,699 (54%)
He said: “I can confirm that the award was to support investment in the Sunderland plant covering three key components aimed at improving the productivity, capacity and future prospects of the plant.
“These were to secure new production of the X-Trail, expanded production of the Qashqai (for General Overseas Markets beyond the EU) and investment to raise the plant’s output to 600,000 units per annum.”
Previously, the Business Secretary has said that Nissan will now need to re-apply for the money, because it was offered on the basis that the firm would build the X-Trail in the UK.
So far, £2.6m has been paid out.
Mr Clark has argued that while Nissan is not blaming Brexit for the X-Trail decision, it does illustrate the need to avoid a “no-deal” Brexit.
He is believed to have effectively told the Prime Minister he will resign if she allows a no-deal Brexit to take place.
This was before Theresa May’s announcement this week that MPs will be given a chance to stop the UK leaving the EU with no deal.
Speaking earlier this month, he said Nissan managers wanted MPs to back Mrs May’s proposed Brexit Withdrawal Agreement.
Mr Clark said a “senior executive” at the Japanese firm told him on Sunday to “please pass on the view to your opposition that they need to meet in a way that forms a deal”.
The Sunderland plant, which opened in 1986, employs 7,000 workers, producing around 2,000 cars a day.
Other Nissan models built at the site include the Qashqai, Juke, Q30, Note and the zero-emission electric Leaf.
Other firms have also announced they are cutting production in the UK.
Japanese carmaker Honda is to close its Swindon car plant in 2021 , with the loss of 3,500 jobs.
Ford is seeking up to 400 voluntary redundancies at its engine plant in Bridgend, south Wales, while Jaguar Land Rover is to reduce its 44,000 workforce by 4,500 under plans to make £2.5bn of cost savings – with most of the cuts in the UK.