Nissan was 'offered up to £80m' for UK Brexit commitment

The business secretary offered Nissan up to £80m of "support" in a series of Brexit assurances before it committed to building new models in Sunderland.

The revelation is made in a letter Greg Clark wrote to the-now ex-chairman of Nissan, Carlos Ghosn, as the company pondered its investment in the UK in 2016 after the EU referendum.

Nissan confirmed days later it was to build new Qashqai and X-Trail models in the North East.

But that decision was partly overturned this weekend, when Sky News revealed the firm had decided to build the X-Trail in Japan instead amid a collapse in diesel sales in Europe and continued Brexit uncertainty.

The government has always denied that any sweetheart deals were made with the company in return for its investment commitment - refusing to reveal the details on the grounds of commercial sensitivity for Nissan.

But the information was released on Monday by the Department for Business - with the backing of Nissan.

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Mr Clark wrote on 21 October 2016 it was a "critical priority" of the UK's negotiation with the EU to ensure that the ability of carmakers to export to and from the EU was not "adversely affected".

On the pledge of financial support, Mr Clark wrote: "As a demonstration of the UK government's commitment, we are already working with your UK team on a package of support in areas such as skills, R&D (research & development) and innovation.

"Work continues but I understand this could amount to additional support of up to £80m.

"You will understand of course that this figure will be subject to business cases being developed, which are independently assessed, and the usual processes of due diligence.

"It 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.

"We recognise that the UK has a stake, and we are backing your continued success in Sunderland to the hilt."

Mr Clark has since disclosed that £61m in grants was offered to Nissan in June 2018 - offers later declared in an EU transparency website five days before Christmas.

Nissan responded: "The letter, written in October 2016, shows Nissan and the UK government's continued desire to support investment in the UK and maintain Sunderland as one of Nissan's manufacturing hubs in Europe.

"The letter is no longer commercially sensitive as it contains nothing that hasn't been disclosed publicly before, and the projects referenced in the letter have now changed."

Mr Clark later told MPs (BSE: MPSLTD.BO - news) in the Commons that the company would have to reapply for grants in light of its decision.

He did not say if the company would have to repay £2.6m already handed over.

The episode is the latest in the car industry to be linked to Brexit - with carmakers including Jaguar Land Rover closing production temporarily in early April in case of disruption.

Industry experts say the diesel factor, as regulators crack down on the fuel, was bigger for Nissan in this case.

Sky News understands only eight Infiniti models, including diesels, are now being produced per shift in Sunderland - down from a high of 150 - because of a lack of demand in key markets.

Mr Ghosn is unable to face questions over his handling of the negotiations with the government as he is currently in a Japanese prison awaiting trial on charges of financial misconduct related to his pay and use of company money while at Nissan.

He denies any wrongdoing.