In the space of a short – sometimes elliptical – interview on BBC1’s Andrew Marr Show, Greg Clark, the business secretary, revealed more than any other UK minister not just about about the content of the successful talks the UK government has held with Nissan but also the wider negotiations strategy towards Europe. For what Nissan sought and received by way of government assurances will surely apply more widely.
Speaking to Marr, Clark made it clear that the UK objective is not just to avoid tariff and non-tariff barriers with the EU, but probably also to adopt a sector-by-sector negotiating approach.
He also confirmed that UK ministers also cannot by law provide direct compensation to industries that may be subject to tariffs, but they will endeavour to ensure the industry remains competitive.
The “demeanour of the UK government” in the talks with Brussels, as Clark described it, will be to reach a deal on access to the EU market, due to the extent to which UK industry supply chains are integrated with Europe. The aim will be to avoid a breakdown in these talks, or a hard Brexit. No decision has yet been crystallised about whether the UK believes it can afford to leave the EU customs union.
The overall tone is closer to the one Theresa May expressed in her private speech to bankers revealed by the Guardian last week than the one the prime minister set out in her speech to the Conservative conference at the beginning of the month.
It is striking how forthcoming Clark chose to be. The government may have felt it was not politically sustainable to keep the Nissan deal secret since there are issues of democratic accountability and commitments on behalf of the UK taxpayer. Keeping the contents of the letter entirely secret was never a viable option.
The rest of UK manufacturing would be battering on the door of the business department to be told its contents for fear they were missing out on a sweetheart deal.
It was also as a matter of raw politics since Clark, if he remained secretive, would have been flayed alive in front of the business select committee or if an urgent emergency House of Commons statement was granted by the Speaker, John Bercow, on Monday.
It is clear from the interview that the commitments made by Clark do not apply just to Nissan, but to the entire automative sector and possibly to the wider manufacturing industry. Clark repeatedly referred to industry sectors and their different needs, implying the UK would seek to negotiate sector-by-sector deals for UK industry with the EU.
The single most important commitment does not take the form of taxpayers’ cash but what Clark described as a demeanour to the negotiations with the EU.
He said the objective of the negotiations would be to prevent tariff barriers being erected and for the minimum of bureaucratic hurdles to be established, by which he meant a minimum number of non-tariff barriers.
Describing his talks with Nissan executives, Clark told Marr: “What I said was that our objective would be to ensure that we would have continued access to the markets in Europe – and vice-versa – without tariffs and without bureaucratic impediments and that is how we will approach those negotiations.
“For the continental European car manufacturers, they export a lot to us, we export a lot to them, components go backwards and forwards. If you conduct the negotiations in a serious, constructive and civilised way there is a lot in common that we can establish. I was able to reassure Nissan – and other manufacturers – that that is the way we are going to approach it.”
This implies that the business department regards access to the EU single market must at the least be set alongside control of migration and UK borders as a negotiating objective.
The aim, according to one minister, is for the outcome to feel like the UK is in the EU single market without being a member
The interview raises four issues immediately. Clark said no decisions had been made on whether the UK would remain inside the EU customs union, but the tone suggests that, as business secretary and a past advocate of remain, he believes the UK should do so. That view is not shared at the top of the Department for International Trade.
Second, a supervisory body of some kind may have to determine whether the UK is complying with the trading rules negotiated with the EU. That could either be the World Trade Organisation (WTO) or another EU-linked supervisory body.
Third, if the UK wishes to trade without tariffs, or other non-tariff barriers, the EU may still require the UK to make a contribution to the EU as the price of access to the single market. That fee may not be the same as the current UK contribution to the EU, and may instead take the form of a grant, similar to that paid by Norway, but cash for access to the single market may be required.
Fourth, it appears Nissan has accepted it cannot be directly compensated if the UK fails to meet its negotiating objectives of no tariff barriers. Clark confirmed that under WTO rules Nissan could not be compensated by the UK government if it faced tariff barriers.
More broadly, Clark’s letter to Nissan also made general commitments that the UK government would continue to keep the industry competitive. He said he would provide, subject to independent review, training and skills support to the car industry, help with regional grants such as nurturing the local supply chain and help in research and innovation. None of that is exceptional, unless the letter is more specific.
But it does sets out the nucleus of May’s as-yet half-formed industrial strategy – something that is likely to be more interventionist than anything proposed by David Cameron.