I wrote last month that a key test of Brexit success will be whether Nissan is still making cars here in ten years’ time. A few days later, Nissan chief Carlos Ghosn issued a warning that ‘If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government.’ The investment decision he referred to — expected by Christmas, which means before Brexit talks even begin — is whether to build the next Qashqai model at Sunderland or in France, to avoid tariffs on exports when we leave the single market. And the deal he was fishing for was a promise of compensation if tariffs are imposed.
What’s at stake is huge: the wider UK automotive sector supports 800,000 jobs. Nissan’s Sunderland plant accounts for almost a third of all UK car production, and three quarters of its output goes to Europe. If Nissan scales back, Toyota in Derbyshire and Deeside — shipping 85 per cent to Europe — will follow. The head of Germany’s automotive industry association, Matthias Wissmann, weighed in last week to say that a hard Brexit could see the UK industry shrivel as production shifted to low-cost EU bases such as Slovakia and Poland.
And though Ghosn is a hard-headed decision-maker, there are emotional factors in play. He also runs Renault, which owns 43 per cent of Nissan, having spent much of his working life in France, where industrial jobs are in short supply. And his affection for his British workforce may have been tempered by the fact that Sunderland voted 61 per cent for Leave.
But sure enough, Ghosn drove into Downing Street in a Qashqai last Friday to receive ‘positive’ assurances from Theresa May that Nissan’s trading conditions will not be changed by Brexit — a promise that can only be fulfilled either by a guarantee of tariff compensation or by negotiating exemptions for the automotive sector in recognition of its pan-European supply chain, in which EU manufacturers stand to benefit from continuing access to the UK.
Is that second option really likely to be on the table? No signal from Brussels or Berlin suggests it could be. And if one sector gets special treatment, how many others will demand it? The City is already lobbying for ‘passporting’ exemptions in financial services, even at the price of residual UK contributions to EU budgets. What a nightmare this negotiation will be — and how lucky we are, at least for the time being, that the devalued pound is saving our trading bacon.
The next Governor
Will Mark Carney go or stay? On appointment in 2013, he indicated he would leave the Bank of England and return to Canada in 2018 (‘We’ll be back in five,’ his wife tweeted), but he has an option to stay a further three years. Theresa May’s criticism of QE in her conference speech was interpreted as an attack, but she and Philip Hammond have subsequently been described as ‘supportive’. Admirers say continuity would be a good thing through the pre-Brexit period, especially if inflation picks up, while detractors such as Nigel Lawson (‘He’s behaved disgracefully’) long to see the back of him. But there’s no big vacancy for him to fill in Ottowa and the chance to succeed Christine Lagarde at the IMF in Washington doesn’t come up until 2021. So the betting is he’ll stay. If Mrs May follows her Johnson-Fox-Davis policy of pushing Brexit cavaliers into the front line, however, might it be worth a flutter on Governor Rees-Mogg?
In 1996, the Telegraph sent me to Russia to report on British entrepreneurs trying to make a buck in the rodeo ring of ‘cowboy capitalism’. They were a rum bunch, led by the likes of bankrupt ex-boxer George Walker, who was beaming live dog–racing into Moscow betting shops and encouraging local punters to shout ‘Go on, my son’ at the screens. In louche Moscow bars and a smoke-filled St Petersburg pool hall, I heard tales of KGB-controlled gold mines, container-loads of cosmetics and Burberry raincoats, timeshare scams, chancers who had fallen foul of the local mafia — and others who had literally been caught in the gangsters’ crossfire.
Among this crowd was one straight arrow: Peter Owen Edmunds, a former Guards officer who was running St Petersburg’s first commercial mobile phone network. He went on to become one of this column’s valuable sources as ‘my man with his ear to the Kremlin wall’ and to battle for two decades against every bear-trap Russia could put in his way, latterly building a business that owns phone masts along thousands of miles of railway tracks. That kind of intrepid entrepreneurship, like the wilder shores of oil and gas exploration, requires grit far beyond the cosy experience of business familiar to most of us, and deserves to be saluted. In recent years Peter also battled cancer; he died last month, aged 57.
As others see us
What kind of economic player do we want to be in the post-Brexit world? A nation of intrepid entrepreneurs and competitive exporters; a beacon of digital research, a buzzing hive of deal-making and a red-hot incubator of bioscience? Or a cut-price shopping mall? In Majorca last week I scoured the local press for glimpses of home through Iberian eyes: ‘Londres está barato [cheap] en euros,’ said El Pais under a picture of Chinese ladies laden with designer bags in South Molton Street, illustrating a 4 per cent rise in foreign visitors to Britain in July. The fall of the pound ‘convirtío al pais en un destino turístico atractivo’.
Elsewhere, I came across this saying: ‘The best way to predict your future is to create it’ — attributed both to Abraham Lincoln and the management guru Peter Drucker. If ever there was a time for titanic efforts to raise our global game and change our future, this is it — lest the rest of the world sees us as little more than a giant Bicester Village.