'Convincing rather than compensation' secured Nissan deal, says Government

The Government has insisted it was "convincing rather than compensation" that persuaded Nissan to boost production at its Sunderland plant.

Labour is demanding the Government comes clean on any "secret deal" with the car manufacturer.

It comes amid reports the company was given written guarantees it would be compensated if the EU imposed a post-Brexit tariff barrier against British exports.

Downing Street suggested written assurances were given to Nissan, with a spokesman saying the Government and the company had communicated in "all forms".

But he reiterated that there was "no compensation package" and "nothing about tariffs".

The spokesman said: "There's been communications in all forms.

"The dialogue between Nissan and the Government has obviously been going on for some period of time.

"We've made it perfectly clear, Nissan have made it perfectly clear, there was no deal, there was no compensation package, there was nothing about tariffs.

"It was just an open and honest dialogue about what the Government sees in the future for the automotive industry of this country and what we are determined to do for that industry in terms of getting the best possible deal leaving the European Union."

The Government earlier told Sky (Frankfurt: 893517 - news) 's Darren McCaffrey it was "convincing rather than compensation" that secured the deal.

The controversy was triggered when Nissan boss Carlos Ghosn said the company's decision was driven by Government "support and reassurances".

It was the term "support" that raised eyebrows, as the firm had threatened to put the brakes on new UK-built models following the EU referendum if there were no assurances on compensation.

Iain Wright, a Labour MP and chairman of the Commons Business Select Committee, said Business Secretary Greg Clark should appear before the watchdog to give evidence on the matter.

He told Sky News: "In very general terms I think the Government shouldn't betray commercial confidences, but should set out the principles, the criteria, by which this assistance, this reassurance and support is provided, and how that will be applied to other companies and to other sectors.

"So if Nissan has received this, and I really welcome the fact that it has and I applaud the Government for what they have done, how will that be applied further across our economy? Which other sectors will be guaranteed reassurance and support? Will all sectors get it, or will just certain sectors?"

Mr Clark told the BBC on Thursday that no financial favours were offered, saying: "There's no chequebook. I don't have a chequebook.

"The important thing is that they know this is a country in which they can have confidence they can invest.

"That was the assurance and the understanding they had, and they have invested their money."

When pressed on whether written assurances on compensation had been given to Nissan, Mr Clark said: "We have had, obviously, as you might imagine, lots of communication between us, but actually what it rests on is a very strong mutual confidence."

Nissan's decision to build its next-generation Qashqai and add production of the new X-Trail model at Britain's biggest car plant will secure more than 7,000 jobs and 28,000 more in the supply chain.

Prime Minister Theresa May has hailed it as proof the UK is an attractive investment hub despite the uncertainty caused by the Brexit vote.