Nissan Must Reapply If It Wants U.K. Support: Brexit Update

(Bloomberg) -- Business Secretary Greg Clark said Nissan will need to reapply if it wants a U.K. financial grant, after it decided not to produce the X-Trail model at its Sunderland plan in northeast England.

Key Developments:

  • Clark says Nissan support won’t be paid, company must reapply
  • Merkel called for creativity to solve impasse over Irish border
  • May will travel to Northern Ireland for a speech on Tuesday
  • Selmayr met U.K. members of Parliament in Brussels
  • U.K. minister met Conservative MPs to try to find a compromise before May heads back to Brussels to seek changes

Clark: Companies Waiting for Brexit Deal to Invest (6:20 p.m.)

Clark said he’s aware of proposed investments in the motor manufacturing industry that are waiting on a Brexit deal, and urged Parliament to come together to find a solution.

“There are investments poised to be made if we can settle this question of the terms of our exit and future relationship,” Clark told the House of Commons. “It might involve members on all sides of this House leaving their comfort zone and being willing to compromise.”

Clark also said that a no-deal Brexit “is agreed by me and the industry to be ruinous for our prospects.”

Talks on Malthouse Plan ‘First Step’ to Compromise (6 p.m.)

Tory MPs met Brexit Secretary Steve Barclay to discuss how technological solutions could replace the need for the Irish border backstop plan, but it doesn’t seem they’ve solved everything just yet.

“We had a constructive meeting on the detail,” said Steve Baker, deputy chairman of the pro-Brexit European Research Group of Conservatives. “It was the beginning of a process and I look forward to further meetings.” More talks are planned for Tuesday and the coming days, a Brexit Department spokesman added. The spokesman said Monday’s discussions were “the first step of a process to find common ground.”

Nissan Must Reapply If It Wants U.K. Grant (5:55 p.m.)

Business Secretary Greg Clark told Parliament that Nissan will need to reapply for government grant funding for training development and environmental improvements at its plant in Sunderland, after its decision to move production of its X-Trail model to Japan.

“The support is available to the sector, they will be invited to resubmit an application in the light of the changed investments that they’re making,’’ Clark told the House of Commons. “Given yesterday’s announcement, if the company seeks to participate in these industry funding schemes, as I hope and expect that it will, the company will submit new applications in the standard way and undergo a process of independent assessment.”

Clark said that while Nissan’s decision was “made on broader business grounds,” the company had called on the U.K. “to resolve the question of our future relationship with the European Union.”

Clark: Nissan Offer Won’t Apply If Terms Not Met (4:15 p.m.)

In a letter Monday to Parliament’s committee on business and industrial strategy, Business Secretary Greg Clark said the government’s package of 61 million pounds to support Nissan will not be paid if the company doesn’t meet the “terms of the offer.” The government also published Clark’s letter to Nissan in 2016, which states the assistance was dependent on Nissan producing both the Qashqai and X-Trail models at its Sunderland plant.

The company announced over the weekend it would not be making the X-Trail in Sunderland, and Clark is expected to give the government’s response in Parliament shortly.

U.K. to Wave Most Goods Through If No-Deal (3:10 p.m.)

The government has issued its latest notice on its no-deal Brexit preparations, this time for importers of goods to the U.K. from the European Union.

For a temporary period after Brexit, “most” shipments from the bloc will be allowed to leave the U.K. port even before customs declarations have been made. The measure applies to so-called roll on, roll off locations that include Dover and the Channel Tunnel. These are critical to manufacturers’ just-in-time supply chains.

Importers would still have to submit full declarations at a later date, with the timing dependent on the type of declaration.

Treasury Committee Demands Nissan Help Details (2:30 p.m.)

Parliament’s Treasury Committee is demanding explanations on the money the government promised Nissan to try to keep it investing in the U.K. after Brexit.

“Any assurances provided to Nissan, especially ones that may cost the taxpayer money, should be put in the public domain immediately,” said Nicky Morgan, the Conservative member of Parliament who chairs the committee.

Brexiteers Return From Brussels Empty-Handed (2:15 p.m.)

At least two pro-Brexit members of Parliament came back from their meeting with Selmayr pessimistic about the prospect of May winning any concessions from the EU.

“I certainly didn’t hear anything that gave me great hope that the prime minister would come back with a change to the withdrawal agreement,” John Whittingdale, a Conservative member of the Brexit committee, told the BBC.

Pro-Brexit MP Andrea Jenkyns sounded shocked as she took to Twitter to report that Selmayr told her May hasn’t asked for the Irish backstop to be removed from the deal, or even for negotiations to be reopened.

May says she will ask the EU to change the backstop -- the controversial part of the divorce deal that seeks to avoid a hard border on the island of Ireland as a result of Brexit. The EU has repeatedly refused to do so.

U.K. Vowed to Protect Nissan From Brexit Fallout (2 p.m.)

The Financial Times has obtained a copy of the “Nissan letter” -- the memo listing the assurances the government gave the company in 2016 in an effort to safeguard its investments in the U.K. after Brexit.

According to the text reported in the FT, the government promised to protect Nissan from Brexit-related disruption.

It made clear that a state support package of about 80 million pounds 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.” But on Sunday, Nissan announced it won’t build the X-Trail model in Sunderland after all. That’s leading some to question whether ministers should now cut the support package.

Pro-Brexit Tories will also be interested to learn that Business Secretary Greg Clark -- who wrote the letter -- did not make a secret promise to keep Britain in the customs union, a conspiracy some had suspected.

Selmayr Dashes U.K. Hopes of Tweaks to Deal (1:30 p.m.)

Selmayr met a delegation from the U.K. Parliament’s Brexit committee on Monday and came away pessimistic about the chances of reaching a deal. MPs couldn’t give him a clear idea of what the EU needed to do to help May get the deal past Parliament, he said on Twitter.

“The meeting confirmed that the EU did well to start its no deal preparations in December 2017,” Selmayr wrote.

May is trying to reopen talks on the deal she spent 18 months negotiating after Parliament rejected it last month by a record 230-vote margin.

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