Nissan’s U-turn explodes myths spread by Brexit criminals
Those who predicted disaster might point to the counterfactual: Johnson did indeed secure a free trade deal with the EU. If he hadn’t, maybe Nissan’s plans for Britain would have turned out differently. But there is reason to doubt it: Not only did the cliff top scenarios never materialize, but contingency plans reported from February 2020 (denied by Nissan) suggested that in the event of a no-brexit okay, he wouldn’t back down. UK, but instead doubling its Sunderland operations.
The timeline of the catastrophic predictions could be called hilarious, if they did not threaten thousands of workers at the Sunderland plant for years (and 70,000 more workers connected to its supply chains).
The politicization of their livelihood hasn’t aged well: Former MP Anna Soubry described Nissan’s decision to ditch the X-Trail SUV as a “Brexit reality” rather than the company’s decision to weigh the future of diesel and invest in a green alternative instead. Meanwhile, Andrew Adonis’ stern warning at the start of the year that there would be “no new investments or new models” to Sunderland turned out to be false within weeks.
It would appear that – despite constant fear-provoking incentives throughout the transition years – Nissan continues to position itself firmly on the side of the home team. But there are bigger lessons to be learned from the Nissan saga, more important than taking the predictions of Armageddon with a very big pinch of salt.
The corporate welfare creep began long before the pandemic, and Nissan was no exception. It was in the carmaker’s best interests to try to squeeze everything out of the Brexit process, but the onus was on the government not to budge. The £ 60million document to Nissan under Theresa May only encouraged rent-seeking by companies and may help explain why the threats intensified in the following years.
Government donations to businesses are likely to increase as the country recovers from Covid-19. In the 2019 election, Johnson pledged to provide more generous state aid to struggling businesses, using taxpayer dollars. Then, the rescue of the disastrously managed Flybe airline in January 2020 proved that they were ready to act on their new interventionist principles.
Now Whitehall is emerging from the pandemic by eyeing a more practical state. This will likely translate into a more protectionist stance, especially about what it sees as key industries, to make sure they stay afloat.
But Nissan is teaching the opposite lesson: With every opportunity to reverse its UK business during the lockdown, the company has instead decided to cut production in Barcelona and Indonesia and invest more here. This shows confidence in the UK’s economic rebound and its prospects after Brexit.
This faith is rooted in good policies and data: The Chancellor’s temporary super-deduction for business spikes the UK’s OECD Competitiveness Index, giving businesses the opportunity to invest in their equipment and see the returns. The OECD has once again revised upwards its forecast for a recovery in the UK, now estimated at more than 7% growth this year alone.
This is where Britain’s strength lies: to create not a free state, but a pro-growth pole where industry can thrive. Both Brexit and the pandemic recovery provide an opportunity to further revise policies to make the country resolutely business-friendly. No reason to give in to the arsonists now.