Labour has accused the business secretary, Greg Clark, of misleading MPs by failing to tell parliament that a £61m package of state aid had been granted to Nissan, despite assuring the Commons that he would do so.
Rebecca Long-Bailey, the shadow business secretary, said that as a result the cabinet minister had “dodged scrutiny” over the promises he had made to Nissan in October 2016 to boost manufacturing in Sunderland after Brexit.
At the time Clark had refused to say exactly what assurances he had given Nissan, even saying there was “no chequebook” involved, despite intense pressure on him to reveal how he had persuaded the company to demonstrate confidence in the UK.
The business secretary promised MPs from the floor of the Commons that any offer of taxpayer support for Nissan would ultimately be reported to parliament once it had formally been agreed, in remarks seized upon by Labour.
Clark said on 31 October 2016 that all proposals for state aid were “subject to rigorous external scrutiny” by the independent Industrial Development Advisory Board (IDAB) and were reported on to parliament.
A package worth £61m was ultimately granted to Nissan in June 2018, but it was kept secret until earlier this month, when the Japanese car maker changed its mind, and decided it would not make the X-Trail SUV in Sunderland after all.
Long-Bailey said: “The government has dodged scrutiny of the assurances it gave to Nissan ever since it was first brought to light. While Labour is in favour of supporting UK industry, we do not support sweetheart deals with no strategy or transparency.”
Clark has said that Nissan would have to reapply for state aid after abandoning its commitment to make the X-Trail in Sunderland, which had it gone ahead would have created 740 jobs at the Sunderland plant, which employs 7,000 people.
Long-Bailey also wrote a letter to Clark, accusing him of failing “to keep your own promise to Nissan” and called on him to “demand that the prime minister rules out a no-deal Brexit – a promise we know you have made abundantly clear in private and must now have the guts to make in public”.
Car makers have repeatedly warned of the dangers of a no-deal Brexit, with Ford and Toyota and the trade body the Society of Motor Manufacturers and Traders among those who have gone public with their concerns.
Last week, Rachel Reeves, the chair of the business select committee, extracted a promise from Clark that he would in future notify the committee every time a company had been granted a state aid package.
A total of £150m in state aid to car makers, including Toyota, Ford and BMW has also been granted without MPs being made aware of them, in a wide-ranging programme to help key manufacturers retain confidence in the UK after the country leaves the European Union.
Richard Harrington, a junior business minister, confirmed in a written answer that while the £61m package was scrutinised by the IDAB, parliament was not notified.
Justifying Clark’s decision, Harrington said: “Only if the secretary of state wished to act contrary to the board’s recommendation (which was not the case with the Nissan award), he shall (if the board [the IDAB] requests) lay a statement before parliament.”
The junior minister added: “There is no obligation to do so when he acts in accordance with their recommendation.”
• This article was amended on 14 February 2019. An earlier version mistakenly said Clark had said Nissan would not have to reapply for state aid. This has been corrected.
