Prime Minister Theresa May’s deal to keep Nissan investing in Britain opened the floodgates on Friday to demands from rival car companies chasing their own assurances from the government that they won’t be hurt by Brexit.
Britain’s biggest car maker Jaguar Land Rover and its biggest engine maker Ford welcomed the news that the Japanese group would build two new models in the northeastern English city of Sunderland. Both said they too needed to avoid the risk of being hit with tariffs on trade with the European Union.
While the exact nature of the deal remains unknown, its announcement raised the prospect that Britain might be adopting an interventionist approach to placate exporters as it prepares to leave the world’s biggest trading bloc – a stark change for a country known for its hands-off approach to business.
Dismissive of the more interventionist approaches of countries such as France and Germany, Britain became a leading destination for foreign investment by coupling a flexible labour market and low taxes with little state involvement in business.
But the shock vote in June to leave the EU has heralded the biggest change in the way corporate Britain is run for at least a generation.The British government promised extra support to Nissan in a written assurance that Brexit would not hit the competitiveness of the Sunderland plant, which exports 55 percent of its cars to Europe.
The government refused to go into details but said there had been no “sweetheart deal”. Last month Nissan’s CEO Carlos Ghosn warned that he would need a guarantee of compensation to offset any tariffs. Following a meeting with May earlier this month, Ghosn expressed confidence that her government would ensure Britain remained a competitive place to do business.