Yesterday, Greg Clark made a statement about Nissan to the House of Commons. During the debate, Sir William Cash made the following intervention:
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark): With permission, Mr Speaker, I would like to make a statement about Nissan. The House should know the background to the decision that the company announced yesterday. In July 2016, the allocation decision for the next model of the Nissan Qashqai was about to be made, and it was set to be awarded to a European plant other than Sunderland.
Nissan had located in Sunderland in 1986, having been persuaded by Mrs Thatcher that the combination of British engineering excellence and tariff-free access to the European Union made Britain an ideal location. So it proved, and the Sunderland plant grew to be the largest car plant in the history of Britain. The firm invested nearly £3.7 billion in it, and it currently employs about 7,000 people, with approximately another 35,000 in the supply chain.
The prospect of losing easy access to the EU market was the principal concern of the company at the time. It was clear that if Sunderland lost the Qashqai, which accounted for over half its production, mostly for export, the medium and long-term prospects for a plant losing scale would be bleak. Determined not to see the 30-year success of the plant come to an end, we set out over the coming months a strong case for backing Sunderland that centred on four areas, all of which were about highlighting the success of, and our strategy for, the British motor industry.
First, we would continue our successful and long-standing support for the competitiveness of the automotive sector, which has been available to all firms for skills and training the local workforce and for innovation. The regional growth fund has supported over 30,000 companies—large, medium and small—since 2010, with £2.6 billion of public support. Some £335 million of that has been invested in the automotive sector via the regional growth fund since 2010. All proposals are assessed independently by the Industrial Development Advisory Board and are subject to UK and EU rules. In 2016, Nissan initially considered applying for a total of up to £80 million in support over nine years for skills training, research and development, and environmental improvements, and it was eventually awarded £61 million—around £7 million a year over nine years.
The second commitment was that we would work with the automotive sector to ensure that more of the supply chain could locate in the UK, in close proximity to manufacturing sites. Since 2016, as many hon. Members know, our automotive sector deal has established with the industry an ambitious programme to do just that.
The third was that we would make a strong commitment to research and development, particularly to the development of new battery technology and its deployment in connected and autonomous vehicles. Our joint industry-Government £1 billion advanced propulsion centre R&D programme, along with our £250 million Faraday challenge, is putting Britain at the leading edge of battery technology and manufacturing. We have introduced testbeds for autonomous vehicles across the country. Indeed, the longest autonomous car journey in the UK will take place in November this year from the Nissan site at Cranfield to its site in Sunderland, covering more than 200 miles on public roads.
Our fourth commitment was that, in our negotiations to leave the EU, we would always emphasise the strong common ground that exists between the UK and other EU member states and pursue a deal that could ensure free trade unencumbered by tariffs or other impediments.
These commitments proved persuasive, as they have subsequently for investments by Toyota at Burnaston, BMW Mini at Oxford and PSA at Luton. Indeed, every competitive allocation decision taken since 2016 in this industry has gone to Britain. Although the discussions had been around the Qashqai, Nissan proposed towards the end of the discussions to add a further model, currently produced only in Japan—the X-Trail—to Sunderland. On 27 October 2016, Nissan announced that both the Qashqai and the X-Trail would be built in Sunderland, securing the plant’s future and adding 741 new jobs.
Last Friday, I was informed by Nissan that following a global review of its capital investment, future capital was needed to accelerate the shift in Europe from conventional to lower-emission vehicles. The Qashqai and the Juke will in future have petrol and plug-in hybrid variants made in Sunderland, and as a result, more capital will be invested in Sunderland than was originally planned in 2016. However, this was accompanied by a decision to maintain Japan as the sole production location for the X-Trail model, rather than to establish a new production line in Europe. The consequence of this is that the existing jobs in Sunderland will be maintained by the increased investment, but that the 741 additional jobs that would have been created in Sunderland will not now be available. Nissan confirmed that production of the new Qashqai, Juke and Leaf will continue at Sunderland, and that the decision has no implications for the existing jobs at the plant.
Nissan also pointed out, as it is done consistently since 2016, that the risk of a no-deal Brexit was a source of damaging uncertainty. While I am pleased that the decision taken in 2016 to build the Qashqai and secure the Sunderland plant is unchanged, it is deeply disappointing to me and to the workforce that the extra jobs that would have come from the X-Trail will no longer be created. I told the House that I would publish the correspondence with Nissan at the time of its original decision, as soon as the company advised that it was no longer commercially sensitive. I have previously shared it with the then Chair of the Business, Energy and Industrial Strategy Committee, but I have now agreed with Nissan that it is reasonable to publish it in full today. Colleagues will see that it sets out exactly what I told the House in October 2016.
Grant support for training and development and for environmental improvements were applied for and approved by the Industrial Development Advisory Board on the basis that both the Qashqai and the X-Trail models would be built in Sunderland. Given yesterday’s announcement, if the company seeks to participate in those industry funding schemes—as I hope and expect it will—it will submit new applications in the standard way and undergo a process of independent assessment.
I am disappointed that the new jobs associated with the X-Trail will not now come to Sunderland, but I am pleased that the plant will benefit from substantial new investment in the existing models and that the decision to continue with the vital investment in the Qashqai, Leaf and Juke, and the jobs associated with them, is unaffected. These decisions were made on broader business grounds, but Nissan has commented on the need for us to come together to resolve the question of our future trading relationship with the EU. I believe that its advice should be listened to and acted upon, so that our automotive industry—which will undergo more change through innovation in the decade ahead than it has for most of the past century, in areas such as battery technology and artificial intelligence—can seize the opportunities for Britain to be a world leader in state-of-the-art car making, providing great jobs and careers for hundreds of thousands of people across our country during the years ahead. I commend this statement to the House.
European Parliament, so that we can have precisely that certainty that Nissan and other investors have called for.
Sir William Cash (Stone) (Con): Will my right hon. Friend accept that, rather than being about Brexit, a fundamental reason for the decline in demand for diesel cars—not only in Sunderland, but elsewhere in the UK and throughout the whole of Europe—is the imposition of EU regulations, which will continue in UK law under the European Union (Withdrawal) Act 2018, to reduce emissions and diesel particulates, which are harmful to health? So what on earth are the anti-Brexiteers complaining about?
Greg Clark: First, the company sells most of its output into the rest of the European Union so will need to maintain its ability to meet the requirements to which my hon. Friend refers. Secondly, as I said to my right hon. Friend the Member for Wokingham (John Redwood), Nissan in particular has been among the prime advocates of the drive towards cleaner vehicles. That has often been to this country’s benefit, because the Leaf, which is made in Sunderland, is the best-selling electric vehicle in Europe.