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Tuesday, November 01, 2016

Brexit and the dangers around the Nissan comfort letter

All the indications are that the UK Government are going to refuse to publish details of the assurances given to Nissan that allowed the firm to invest further in its Sunderland plant. It may be that this refusal is because Ministers are embarrassed at how they are having to circumnavigate Brexit, but more likely it will be down to a fear that everybody else will want the same assurances and that may become very costly indeed.

Now the Guardian report that Japanese companies based in Britain have already started to receive offers from other European countries and could postpone investment decisions if Theresa May’s government fails to negotiate a close economic relationship with the EU:

Haruki Hayashi, president of the Japanese chambers of commerce in Britain and the European CEO of Mitsubishi, who said businesses needed more than “general reassurances” if his country’s investment presence in Britain was to be maintained.

Speaking to MPs in parliament, including the Brexit secretary, David Davis, Hayashi said that in a complex and interdependent world, the decision to leave the EU would have a serious impact on individuals and businesses.

His visit came after it emerged that the government had written to Nissan to promise it would remain competitive following the Brexit process.

Hayashi emphasised the importance of factors such as membership of the single market and customs union.

“Some examples of areas of concern for Japanese companies include validity of the single passport system, the free movement of skilled workers between the UK and different parts of Europe and whether the continuation of the current environment of uncertainty will lead the Japanese companies to postpone further investment decisions,” he told a reception organised by the Japanese embassy in London at which dozens of companies were represented.

It could also mean companies would seriously consider relocating to other countries, he added, urging the government to speak to Japanese business figures throughout the renegotiation process.

“Some Japanese companies have already started receiving offers from alternative European host countries,” said Hayashi.

“I cannot speak on behalf of each individual member of the chamber but the message coming through loud and clear is that more than general reassurances are called for at this stage to ensure that the Japanese investment presence in the UK is not diminished for lack of consultation and information sharing.”

Those who say that the economy have survived the referendum decision to leave the EU are being premature. We have not even invoked Article 50 yet. There is a long way to go before we can form a proper judgement on the impact of Brexit on the UK.
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