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4 February 2019

What does Nissan’s U-turn on production in Sunderland mean for Brexit?

The decision to move production to Japan is a handy reminder of the consequences of going over the cliff without a deal.

By Stephen Bush

Nissan has cancelled production of the new model Nissan X-Trail, the car giant’s new 4×4, at the company’s Sunderland plant. 

It means the loss of future vacancies at the plant rather than the scrapping of existing jobs, as the production of the Qashqai and Juke models is set to continue, and the decision is driven in part by concerns over the future of diesel vehicles in the UK and Europe, but it is also, of course, driven by uncertainty over the Brexit outcome.

It highlights the economic consequences of any form of Brexit. Leave the customs and regulatory framework of the European Union and you have lower growth in companies and industries that sell heavily into the rest of the European Union. Stay within the customs union and/or the single market, and be subject to rules that you can’t shape or influence. Leave the whole thing and say goodbye to large chunks of the British economy.

But does it move the dial as far as the question of how the Brexit crisis will be resolved? It is a political humiliation for May, who staked a great deal of time and energy on reassuring Nissan at the start of her premiership. (The Times reports that the government is considering reneging on the £60m package to support Nissan as a result of the decision to scrap the X-Trail.)

It is, however, a handy reminder of the consequences of going over the cliff without a deal – and a boost to May’s hopes of passing something that looks a lot like the withdrawal agreement. For Jeremy Corbyn, it underlines the importance of staying in a customs union with the European Union, the Labour party’s main policy ask from its negotiations with the Conservative Party.

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The big hope for parliament’s small band of pro-Europeans is that this reminder of the price of Brexit will change minds both in the country and equally importantly in SW1.