Motor manufacture and EU membership

Last week Nissan made a most welcome announcement. They said the new Juke car will be made in the UK, with a £100 million investment in their Sunderland factory assuring its jobs and success through into the next decade. When asked by the BBC, their Chairman confirmed that this decision was not dependent on any particular outcome to the referendum on UK’s membership of the EU. The decision is a recognition of the efficiency and quality of work in the UK and the growing market for cars here.

Tata Motors have come to a similar decision, with their announcement of a £400 million expansion, including a new engine plant in the UK. They too have been impressed by the quality, efficiency and technology the UK is capable of delivering, and like the UK domestic market for their products.

I welcome this for its own sake. I too have been impressed by what has been achieved in recent years. The UK now has world beating factories achieving great results.

I also welcome what this means for the EU referendum debate. Some years ago three leading car producers with factories in the UK made clear they wished the UK to enter the Euro, and went on to say they would not carry on investing here if the UK stayed out. I will not repeat the quotes and name the companies, as I am pleased to report they all changed their minds, and all went on to invest more. It appears that this time round the pro EU politicians will not be able to rely on quotes from overseas car producers to justify their threatening and wrong forecasts that we will watch our car industry shrink if we leave the EU, as the main players are committed to long term expansion plans regardless of the decision.

As I have long argued, there is no way we wish to end up with tariffs against German or French car imports into the UK, even though they sell more to us than we sell to them. There is no likelihood of new higher tariffs on cars made here. Germany has told us she does not want higher tariffs on the car trade with the UK. The worldwide industry will go on investing in the UK all the time management and workforce do a great job on quality, efficiency and cost. If we vote to leave the EU we will still trade with them, be friends with them, and have many agreements and contacts with them.

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75 Comments

  1. Peter A
    Posted September 8, 2015 at 5:18 am | Permalink

    Apologies, on a separate topic.

    It is outrageous the sanctimonious, head in the sand, BBC led outcry over these drone strikes in Syria.

    Call Me Dave’s timidity in representation of this to parliament was also disheartening, though understandable given that he has agreed to mass immigration from that part of the world.

    1 These traitors had renounced their citizenship
    2 They are at war with us , let’s wake up to this fact otherwise it will be too late
    3 let’s stop preventing those who hate our way of life from leaving, let them go to Raqqa and wage war against us but understand that there will be consequences

    • Denis Cooper
      Posted September 8, 2015 at 7:58 am | Permalink

      Agreed on all your points, and I would add that the media seem incapable of grasping that the previous Commons vote was on whether to attack the forces of the Assad regime in Syria not the forces of Islamic State in Syria. I have warned before about using the shorthand “bomb Syria” without clarifying which set of targets in Syria are to be attacked. This is a war, and ultimately an existential war against a sworn mortal enemy, the UK should be doing everything it possibly can to help to completely destroy Islamic State before it can get itself permanently established, and if renegade citizens of the UK get killed fighting on the wrong side then my reaction is “good riddance”. Of course I can understand the pain of their families and friends, but perhaps some of them need to consider where their own loyalty lies and they should certainly not be blaming the UK government.

  2. Lifelogic
    Posted September 8, 2015 at 6:27 am | Permalink

    Agreed. They can and will cause far more damage to the UK with us in the absurd EU treaties and under the ECJ than outside these structures.

    Good to see Cameron lost the purdah votes, but on 37 Tories, it seems, to want a fair referendum. Not that it can ever be fair given the absurd bias of the BBC.

    • Know-Dice
      Posted September 8, 2015 at 7:34 am | Permalink

      Yes good news for the “Euro Skeptics” but I wonder with the polls currently showing the “Leave” campaign in the lead, how long can Cameron delay having a referendum?

      And back on topic, keep up the message “The EU needs the UK more than the UK needs EU”…

      A BBC blog yesterday by Robert Peston (whoever he is…) tries to show that Germany’s desire to let in more migrants/refugees is not entirely altruistic.

      Why Germany needs migrants more than UK

      • Lifelogic
        Posted September 8, 2015 at 6:25 pm | Permalink

        Robert Preston is some chap with a silly voice, irritation pregnant pauses, over theatrical presentation of mainly vacuous drivel. This combined with a total failure to grasp anything much about business, politics or economics.

        I would guess from his style that he is EUphile, lefty, believing in green crap and ever bigger government. Someone more interest in presentational theatrics than substance.

        Ideal qualifications for a job at the BBC it seems.

  3. Iain Gill
    Posted September 8, 2015 at 6:39 am | Permalink

    NE? It’s Sunderland, indeed the plant was built on the site of what was Sunderland airport. Every time something is in Newcastle its mentioned explicitly, otherwise its NE. There is real resentment in the area about stuff like this. So be careful.

    They will still depend on favorable quota terms if we do leave. But given the other European cars we buy we are on strong ground.

    Tata is different they are moving some production to south america, India and China. They bought the brand not the skills. Indeed they already left the skilled Coventry workforce behind jobless.

    • Edward2
      Posted September 8, 2015 at 7:52 am | Permalink

      “Left the skilled Coventry workforce behind jobless…”

      Last time I checked Tata were investing hundreds of millions and were recruiting thousands in the area.

      • Jagman84
        Posted September 8, 2015 at 11:33 am | Permalink

        Ian Gill ….. JLR is more Solihull, Castle Bromwich & Halewood these days. We get a little touchy about such things! Moving from hand-built to mass production will always de-skill the workforce. Reduced new starter wages are also a factor in the investment decisions. Energy costs will become the deal breaker for further growth in UK jobs.

        • agricola
          Posted September 8, 2015 at 12:32 pm | Permalink

          Someone has to programme and maintain the automation, they are usually highly skilled. Above all, said automation and quality control leads to a reliable product which customers might choose to buy. Our weakness is the failing of the education system and as you point out, the cost of energy.

      • Iain Gill
        Posted September 8, 2015 at 12:42 pm | Permalink

        I stand by everything I said. Jag in Coventry had top notch skills in the wood shop, in the leather shop, in the engine production, and in the assembly itself, and so much more. Those people spent a long time perfecting their skills and most are on the dole. Solihull is not “the area”.

        • Edward2
          Posted September 8, 2015 at 5:07 pm | Permalink

          You talk of the 1970s
          Life and techology has moved on.
          Who wants wood and leather?
          Most you talk about are now retired.

        • Jagman84
          Posted September 8, 2015 at 7:26 pm | Permalink

          Jaguar ceased to be a Coventry-only company a very long time ago. Apart from the head office, the only ‘Cov’- based facility is Whitley engineering. As for “most are on the dole”, many are no longer of this earth and the remainder are in other roles within the company. Your ignorance of the actual state of the company is appalling. Tata have faith in the business, even if you do not.

          • Iain Gill
            Posted September 10, 2015 at 12:19 pm | Permalink

            I have 1st hand knowledge, slagging me off does not change the facts.

          • libertarian
            Posted September 11, 2015 at 9:40 am | Permalink

            Iain Gill

            You haven’t presented a single fact, you’ve provided no evidence. Its all just your opinion. Oh and you’re wrong, see the links I’ve already provided to real facts.

    • oldtimer
      Posted September 8, 2015 at 8:05 am | Permalink

      You are wrong about Tata. They have built new capacity here in the UK, recruited many more people, and have developed excellent apprenticeship schemes. They have also added or are adding capacity in overseas markets, in part because this is a condition of doing business or expanding their business in those markets. JLR says it has doubled employment in the past five years and invested £11 billion in new product development and capacity.

      • Iain Gill
        Posted September 8, 2015 at 12:47 pm | Permalink

        yawn, you only have to dig a little under the surface to see what is going on.

        • libertarian
          Posted September 8, 2015 at 4:16 pm | Permalink

          We can safely ignore Iain Gill he is living in the last century still.

          He has no understanding of the FUTURE of car production.

          Yes some old traditional wood and leather craft skills are no longer needed, so what. Evolution happens.

          By the way Ford has also invested a considerable amount in its Dagenaham diesel engine plant which means it will be the biggest global supplier of diesel engines. Producing 1.4 million units per year

        • oldtimer
          Posted September 8, 2015 at 4:34 pm | Permalink

          My remarks are entirely factual. Tata`s acquisition of JLR has been beneficial to the company and to the UK economy. Your gripe appears to be related to the Coventry area and ignores the investments made at Solihull, Castle Bromwich, Halewood and Wolverhampton. Furthermore it has been and is being substantially funded by sales of Range Rovers around the world; it is certainly not by sales of Jaguars – a brand which only survives because, it seems, the the new owner and current CEO are supporters of it.

        • Edward2
          Posted September 8, 2015 at 5:08 pm | Permalink

          Like Tata investing a total of a billion recently in their company
          Yawn, its 2015 now.
          Customers want different vehicles.

  4. margaret
    Posted September 8, 2015 at 6:40 am | Permalink

    Of course business matters and all nations prosperity will find a way, through trade.

  5. alan jutson
    Posted September 8, 2015 at 6:51 am | Permalink

    The vast majority of Business owners and managers do not run their business for political reasons.

    They simply want to operate profitably, with a stable/knowledgeable/skilled workforce, in a stable country.

    They want to keep it as simple and cost effective as possible, because that is the most efficient way to operate.

    If the UK fits the bill they will come and stay, if somewhere else offers a better opportunity or significantly lower cost, they will go.

    Simples.

  6. Anonymous
    Posted September 8, 2015 at 6:54 am | Permalink

    The argument is that we will lose 3 million jobs if we leave the EU.

    I don’t know what this figure is based on but the figure for my argument for getting out is based on our experience since 1997:

    If we remain in the EU there will be at least 10 million more people to find jobs for in the next twenty years.

    A deficit of 7 million jobs in favour of the Out’s argument. Even if Nissan did decide to go we cannot afford to remain within the EU just to keep them here.

  7. Anonymous
    Posted September 8, 2015 at 6:59 am | Permalink

    The Ins argue that we will lose 3 million jobs if we leave the EU. (this is based on pure conjecture)

    The Outs argue that at least 10 million new jobs will need to be created if we remain in the EU. (This is based on the immigration figures since 1997)

    A deficit of 7 million jobs in favour of us getting out. We cannot afford to keep Nissan here if this is the cost of the present arrangement.

    (To clarify my previous effort on this submission)

  8. Boudicca
    Posted September 8, 2015 at 7:04 am | Permalink

    Well done Mr Redwood and chums for defeating Europhile Dave and ensuring that Purdah will apply to the EU Referendum debate AND there is a 4-month notice period so that both sides can campaign on a fairer basis.

    I’m sure Mr Cameron was celebrating the fact that he has a majority last night.

  9. Peter van Leeuwen
    Posted September 8, 2015 at 7:04 am | Permalink

    True Britons will not go for Nissan. “Buy British” is their motto.
    So why not buy a third-generation Mini hatchback and remain a true Briton! 🙂

    Reply Not so, and a big misunderstanding. Both Nissan and Mini are British made cars, and both are foreign owned companies. Both are very welcome here and both make attractive products.

    • JimS
      Posted September 8, 2015 at 7:45 am | Permalink

      I can’t fit a third-generation ‘Mini’ on my drive – more Eurospeak?

      • Peter van Leeuwen
        Posted September 8, 2015 at 10:47 am | Permalink

        @JimS: it was only a little joke. Google for VDL Nedcar Born Mini”and you’ll probably find it, a British car, produced in the Netherlands, owned by a German company (BMW)

    • agricola
      Posted September 8, 2015 at 7:45 am | Permalink

      Does Google have a link to the dark side of the moon. Such continued nonsense can only be coming from there.

    • Edward2
      Posted September 8, 2015 at 7:54 am | Permalink

      Buy British is their motto…
      Far from it, the majority of cars sold in the UK are imports.
      Compared to France where home built vehicles are favoured by French buyers.

    • CdBrux
      Posted September 8, 2015 at 8:18 am | Permalink

      Peter,

      You very much misunderstand how most Brits will think as JR has mentioned. We will look to buy what we consider the best product for the money we wish to spend, and where and by whom it was made is much less important. For sure the majority of people would like to see more of those companies British owned and, where sensible, making products in UK but that is not the same as buying UK products if they are not good enough value for money. UK people in general are very open to the world in this way and understand if the wish to have more UK products for us to buy is to be realised then the producer needs to earn that right. Very meritocratic!

      On a side note the success of Nissan Sunderland plant shows with good management and unions working together rather than in a more confrontational approach then UK value added manufacturing can be a success.

      • Peter van Leeuwen
        Posted September 8, 2015 at 10:49 am | Permalink

        @CdBrux: Actually, I like British companies and factories and economy doing well! Much of my family is British. A good British economy benefits a very open economy like the Dutch one.

    • Peter van Leeuwen
      Posted September 8, 2015 at 8:25 am | Permalink

      Reply to reply: I thought I’d just do a little promotion for a car (third-generation Mini hatchback) which is being produced in the Netherlands 🙂

      • libertarian
        Posted September 8, 2015 at 4:27 pm | Permalink

        Peter vL

        I understand your comment was a tongue in cheek joke. However the point is valid. People that bang on about the “nationality” of products are living in the wrong century. Most cars are made using technology, systems and components designed, built, integrated and assembled from and in many places in the world. That is why the EU is so old hat Peter its a Little Euroland closed shop trying to shut out the rest of the world. VW build in Mexico, Mercedes in USA and motor manufacturers makie things in plants scattered far and wide. I own 2 German and 1 Italian cars all of them incorporate technology developed by F1 engineers in the UK amongst others.

        • Peter van Leeuwen
          Posted September 9, 2015 at 10:27 am | Permalink

          @libertarian: An inward-looking EU is not what we need. Actually, as trade partners with China, neither Germany nor The Netherlands are doing badly at all. I cannot ever see “nations” in the EU disappearing, something that some in the UK argue will happen.
          In my perspective “Small is beautiful” could be a tiny specialist Scottish whisky producer, for which customers are willing to pay extra when they order online (both Chinese and Dutch customers). It could also be all kind of start-ups in the digital world that we are bound to see in the coming years. The EU is not to become some empire, but it is meant to bring peoples in Europe closer together.

        • Edward2
          Posted September 9, 2015 at 6:19 pm | Permalink

          You are so right Libertarian.
          Economies of scale and the huge costs setting these production lines mean the plants producing engines, gearboxes, suspension systems etc, need to sell them throughout the world from a factory that works non stop.
          National is long gone
          Europe is still too inward looking.
          World is where we need our vision to be.
          Worrying about who owns what, forgets that huge smounts of UK investment is into businesses all over the globe just as world investment comes to the UK.
          Welcome it all and prosper.

    • Mike Wilson
      Posted September 8, 2015 at 12:03 pm | Permalink

      True Britons will not go for Nissan! What twaddle. I have despaired for decades at how readily we will buy ANYTHING but British – especially where cars are concerned. And hi-fi. And white goods. And … so on.

      This country is full of Toyotas, Hondas and Nissans – many of which are made here. Likewise the BWM Mini.

      • fedupsoutherner
        Posted September 8, 2015 at 9:54 pm | Permalink

        Add to that, BMW, Audi, Volkswagen, Skoda, Subaru, Kia and Hyundi. Sit on a motorway any day and you will find yourself surrounded by foreign cars.

    • Anonymous
      Posted September 9, 2015 at 8:28 am | Permalink

      Anyone with any sense in my pay grade buys second hand. Nearly new if keeping up to date is really important.

      • libertarian
        Posted September 9, 2015 at 1:41 pm | Permalink

        Anonymous

        You’d be better off on a 3 year personal lease ( contract hire) . Brand new car for £200 per month depending on type/make/spec. Hand it back at the end and repeat.

  10. ian wragg
    Posted September 8, 2015 at 7:28 am | Permalink

    Of course companies will continue to manufacture in Britain if conditions are favourable. that may not be the case when we start to get power cuts due to the stupidity of the Climate Change Act and your 100% support for intermittent renewables.
    It was said in Sundays papers that Millipede and Bliar didn’t understand the difference between Megawatts and MWH. What idiot advises these childish PPE people.
    The Daily Wail says we may be sued for millions for killing the treacherous IS Britons. Tell me why John, in the past they woul;d have been shot for treason. They are our enemies. etc ed

  11. Denis Cooper
    Posted September 8, 2015 at 7:32 am | Permalink

    Congratulations on the results achieved in the Commons yesterday. Of course it is a pity that we have to rely on Labour and the SNP supporting your efforts to make the government do the right thing, which they only do from a desire to embarrass Cameron.

    However now there is still the matter of the proposed franchise for the EU referendum being wrong. That is unless somebody can explain why we should allow Irish citizens to vote on the future of the UK when UK citizens are not allowed to vote in any Irish referendums.

  12. Denis Cooper
    Posted September 8, 2015 at 7:33 am | Permalink

    Congratulations on the good results achieved in the Commons yesterday. Of course it is a pity that we have to rely on Labour and the SNP supporting your efforts to make the government do the right thing, which they only do from a desire to embarrass Cameron.

    However now there is still the matter of the proposed franchise for the EU referendum being wrong. That is unless somebody can explain why we should allow Irish citizens to vote on the future of the UK when UK citizens are not allowed to vote in any Irish referendums.

  13. Denis Cooper
    Posted September 8, 2015 at 7:41 am | Permalink

    Unfortunately there will be a significant chunk of the electorate who vote to stay in the EU out of misplaced, albeit perfectly understandable, fears for their own jobs or those of their family members. The government and its allies, including most of the mass media, will no doubt seek to exacerbate those fears, and it will be a hard job to counter their propaganda however unsound it may be. As I recall in the 1975 referendum campaign some large companies actually sent letters to all of their staff warning that their jobs would be a risk if there was a vote to leave the EEC, and I expect that may well happen again.

    • Anonymous
      Posted September 9, 2015 at 8:33 am | Permalink

      Denis – the ‘3 million jobs’ saved by staying in Europe (unverifiable) has to be offset by the millions of jobs that need to be created for people allowed to come via Europe (verifiable.)

      • Anonymous
        Posted September 9, 2015 at 8:35 am | Permalink

        Europe leads to increasing welfare, entitlement and dependency, in Britain in fact.

  14. forthurst
    Posted September 8, 2015 at 7:56 am | Permalink

    What does this tell us? That foreign car manufacturers have listened to the arguments of the Conservatives, Labour and LibDem whose Europhile leaders have claimed that three million jobs, including presumably those of car assembly workers, would be put at risk if we were to leave the EU? That they have listened to the BBC which has been bloviating with this argument on a continous loop? That they have been assiduous readers of JR’s blog?

    With due respect to JR’s excellent blog, I suspect the answer is none of these; they have taken professional advice and been told to ignore the posturings of deceitful politicians because the business risk to them should we opt to leave the EU is negligible and that is what determines the opinions of real business men.

  15. agricola
    Posted September 8, 2015 at 7:57 am | Permalink

    These two car manufacturers merely confirm that the UK is a good place to make cars. I would think that BMW, Toyota and Honda would concur. The three million lost job merchants backed by the BBC must be taken to task every time they put forward this argument. Ridicule and satire are possibly the best weapons, a chance to use them without being accused of being racist. I believe the clegglet pulled the three million from his EU hat in defence of his future pension from them, and we know the BBC is on a nice little earner from the EU. I thought we had put an end to buying votes long ago.

  16. Shieldsman
    Posted September 8, 2015 at 8:02 am | Permalink

    A few days ago you covered the Northern Powerhouse.
    In the Harold Wilson era Industry went into decline due to too much reliance on Government and poor productivity due to Union domination. Remember British Leyland.
    Poor management was not prepared to pay for automation and increased productivity, they relied on cheap dissatisfied labour.
    The Japanese car companies were prepared to make the investment, recognising the skills and technical ability of the UK.
    The success of the Japanese two stroke motor bike was due to information from research carried out at Queens University Belfast into gas expansion.

    There is a limited place for cheap unskilled labour, minimum wages mean eventually it is no longer cheap. Increasing immigration requires the creation of more jobs and the roller coaster of more infrastructure. Better to stick with a balanced efficiently employed workforce.

    • forthurst
      Posted September 8, 2015 at 11:06 am | Permalink

      “Poor management was not prepared to pay for automation and increased productivity, they relied on cheap dissatisfied labour.”

      Very misleading. The failure to automate was from the intransigence of shop stewards, decreeing that following the introduction of new equipment, manning levels would remain the same with the threat of strikes until such manning levels were achieved. The indigenous automotive industry was destroyed by the failure of succeeding governments to grant the owners of businesses their right to manage them.

      • oldtimer
        Posted September 8, 2015 at 1:57 pm | Permalink

        Quite right. One of the defining images of Red Robbo, the Longbridge shop steward and avowed Communist, was leading a strike supported with barbed wire barricades to prevent production of the new Metro. That car, incidentally was produced efficiently, as was confirmed by Bill Hayden, then VP Manufacturing of Ford, of Europe in comments he made to a House of Commons Select Committee.

        It is often forgotten that the real architect of the Leyland-BMH merger (which became British Leyland) was the Wilson Labour government; a folly later reinforced by Wedgwood-Benn when Callaghan was PM.

  17. Posted September 8, 2015 at 8:29 am | Permalink

    The Nissan additional investment in the NE is a very welcome boost to the economy and , as the post points out , a pat on the back to the UK automotive industry . Nissan were clients of mine for many years and had always shown an enthusiasm for their activities in the UK . One of the reasons for their enthusiasm was the quality and depth of knowledge that supported the automotive industry in the UK and the fact that , as an Island , we were very similar to their position off the mainland of China .

    We are the biggest market in Europe for the Germans and their automotive industry is the major influence in their economy . The Germans will not encourage or impose restrictions on us were we to exit the EU because they would emerge the losers . In addition to their favourable trade balance , they rely heavily on our advanced design and engineering development services – Mercedes F1 is not based here for fun!!

    Sales of Nissans are increasing . Their products manufactured here are reliable , competitively priced and popular . The present Renault content in the ownership has not dimmed the outlook for their UK activities , quite the opposite – the interchange of engineering and product has kept Renault alive in Europe ; without this content Renault would have struggled to remain alive .

    • libertarian
      Posted September 8, 2015 at 9:35 pm | Permalink

      Bert Young

      Spot on, totally agree

  18. Ex-expat Colin
    Posted September 8, 2015 at 8:32 am | Permalink

    Ford didn’t think much of this place. Focus is the most popular car I believe along with the Fiesta. Likely some engines are built here along with out of date cheapo gearboxes to match. The rest of it is Europe and Turkey/Croatia.

    And assembly plants ain’t much to crow about. But its something that could lead to something…no holding breaths?

    I thought Tata was moving its steel plant out (energy) and part of the Rover vehicles?

    Business is business if you want to remain in successful business that is.

    O/T:
    Is the game of fairness over yet? And will the EU/BBC be silenced on the subject. Not holding breath on the either.

  19. alan jutson
    Posted September 8, 2015 at 8:42 am | Permalink

    Thanks for voting to help common sense and fairness to prevail last night John.

  20. Iain Moore
    Posted September 8, 2015 at 9:32 am | Permalink

    This is the well worn play sheet of the BBC. We see it over the EU and we have seen it over migrants.

    The migrant issues has been the perfect example of what the BBC gets up to.

    1/ The put leading questions to foreign politicians , a sort of would you like to put the boot into Britain type question. If a foreign politician says a word out of line, then this becomes the BBC’s headlines …’Nasty Britain isolated’

    2/ They fill the news programs with what can only be described as overt propaganda. With the migrant issue they have portrayed them as little girls skipping along railway tracks with teddy in her arms, and a young woman making her way to Sweden, what they haven’t represented them as is , what they are, mostly young men.

    3/ They never ever ask the difficult question of the group/cause that has been bestowed with their support, and yet against resort to feeding them soft and leading questions to get a response to support their cause.

    4/ They seek out the odd dissenting voice in the Government to give them headlines in order to add to the pressure on the Government .

    5/ When they have put in place the criticism , the propaganda, the dissenting MP’s voices, contributions from the Charities and Churches, and the claims that social media is all voice, the BBC will consider it has put in place an unstoppable momentum for their cause.

    Trouble for the BBC is that thought being very slick in their media operation, they have essentially been talking to themselves, and the public rather than being swayed by them, haven’t been moved at all. Here rather than the public opinion moving in favour of taking more migrants, it appears that a majority don’t, and the death of the little boy rather than being a ‘ game changer’ as the BBC was boasting, a significant majority of the public believes it was emotional blackmail, and should not be permitted to distort the debate.

    So though it is frustrating to watch the BBC play its games over the EU, if the migrant issue is anything to go by , then the public can be said to be very wise to their propaganda tricks.

    • Qubus
      Posted September 9, 2015 at 5:26 pm | Permalink

      Quite right. Whilst I agree that the death of the little boy was a tragedy, as is the death of any small child, especially for its parents. Nevertheless, I would equate the BBC reporting of that event as being on a scale comparable with the sad death of Princess Diana.

  21. MPC
    Posted September 8, 2015 at 10:58 am | Permalink

    Good news indeed about Tata but it’s also surprising given their recent announcement of 700 redundancies in Rotherham I thought in large part driven by high energy costs. Would you know whether their latest decision has in any way been based on a reconsideration of future energy costs since the election? If so that would be worth emphasising as a counter to the ‘3m jobs will be lost if we leave the EU’ crowd.

  22. CHRISTOPHER HOUSTON
    Posted September 8, 2015 at 10:58 am | Permalink

    Of course it could be that large global companies have little faith Mr Cameron will at any point even if the EU insists we each eat two tons of agricultural waste per year , advocate and exit from the EU.
    The Labour Party led by Mr. Corbyn , they know, would in such circumstances say that two tons was a national disgrace and how we should be ashamed. That our stomachs should be stuffed full of Twenty-Five tons of French manure and left-over German sausage and sauerkraut like foie gras or as we used to call it in Yorkshire: potted dog.

  23. agricola
    Posted September 8, 2015 at 12:06 pm | Permalink

    I have been at pains to point out in the past that the Motor Industry is not the familiar names in your local car showroom. A car consists of thousands of parts, the companies who make those parts and deliver them to the car plants on a Just in Time basis are the part of the manufacturing iceberg you do not normally know about. A good portion of this is British owned and located.

    On the subject of EU membership, Nigel Farage has now launched his Say No to EU campaign in Margate. No doubt it will be repeated up and down the country at other venues .

    The Eurosceptics in Parliament have won some useful concessions as to how the referendum campaign will be run. There are other points that need clarification. Who will be allowed to vote. I would want it confined to British passport holders who are allowed to vote in General Elections. Control over the impartiality of the BBC is another area that requires thought. Involvement by the EU or any of it’s agencies should in my view be blocked.

    The leadership of the Parliamentary group and the Business group that want out of the EU are, though named, virtually unknown outside their spheres of influence. Nigel is the opposite and has begun reaching out to the British electorate. He has the capacity to fill town halls that the others could not.

    I would suggest that the time has come to accept that this is a national sovereignty issue, and to begin talking to all those involved. Nigel has said again that he is happy to share his platform with people from other parties that believe as he does. Unity in the coming months will be of paramount importance.

    • ian wragg
      Posted September 8, 2015 at 3:23 pm | Permalink

      I agree that the Eurosceptic organisations other than UKIP are little known. Much as Richard North blames everything including the weather on UKIP in general and Farage in particular, Nigel can command an audience and he answers the questions in English. Not some parliamentary babble with no specific meaning.
      All along he has said that being able to control our borders is the first step to regaining sovereignty and he is 100% correct.
      All other things like energy policy, law and order etc etc require exit from the Marxist inspired rule from Brussels.

  24. behindthefrogs
    Posted September 8, 2015 at 12:50 pm | Permalink

    Rather than worrying about the politics of leaving or staying in the EU we should be worrying about the import export imbalance. Why do we import more cars from France and Germany than we export to them? It seems that the reason is not quality and so the likely cause is probably price. This points to a need to reduce the cost of manufacture in particular labour costs. An immediate solution wold be to reduce the employers’ NICs paid by manufacturers. This obviously cannot be done in a way that the EU would interpret as providing subsidies on goods manufactured in the UK and so it either needs to be a general reduction in employers’ NICs or possibly some form extended apprenticeships.

  25. Posted September 8, 2015 at 2:03 pm | Permalink

    Nearly all businesses where distribution costs are a great factor (like motor cars) need to manufacturer close to the demand, regardless of the politics that are going on.

    Because it does not fit the BBC narrative, I doubt if they will bother to interview Nissan in the near future.

    Bernard Jenkin laid into the BBC on the Today programme this morning about BBC bias in this area. He was like a dog with a bone and wouldn’t let it rest.

    For most politicians this would be an almost suicidal move as they would be consigned to the wilderness by the BBC. However Mr Jenkins is a shrewd man. We all know that the BBC has given very wide coverage to Margaret Hodge and Keith Vaz who were chairmen of influential committees. The precedents that have been set must be applied to Mr Jenkin’s beefed up committee and even the BBC cannot ignore him.

  26. sm
    Posted September 8, 2015 at 3:33 pm | Permalink

    Good news and very wise by car companies to stay off politics.

    Now can we consider the role of other EU state companies in our infrastructure and security needs. Particularly the energy sector.

    We seem to getting some unfriendly comment from some EU quarters if we do not comply on all things as decided in Europe.

    Perhaps, Mr Corbyn may right. We may have to consider taking control of certain industry segments.

  27. David Pearl
    Posted September 8, 2015 at 4:16 pm | Permalink

    Dr Redwood,
    This is my first post on any site so please be gentle with your red pen!

    A fine speech in the House last night. Whilst working I listened to the entire debate and yours stood out. Wonderful. The points about the car industry and the pro-EU business leaders who constantly appear on the BBC were particularly well-made. Congrats to you and your colleagues on the final result.

    With your permission I’d like to make a few general points, with only one about business and the EU. However any future posts will be specific to the article in question.

    I’ve read your diary for a long time, as well as the comments of your correspondents. Thank you for the breadth and depth of your observations and for the time you spend on the matters you raise in the House and on your site.
    Please keep writing on a wide variety of interesting subjects, not just about immigration and the EU.

    I understand your approach to the issues you raise. I also understand the frustration of your correspondents, that you’re not more critical and demonstrative in your talk and action.

    To survive in politics as long as you have, you would go mad if you attacked every issue with intemperate language and with raised blood pressure. And you wouldn’t necessarily achieve any better results.

    For what it’s worth, I’m making this first post for three main reasons. Finally at 53 years of age I can no longer defend the BBC – or indeed the majority of our national newspapers. I’m afraid that any pretence at journalistic impartiality has simply disappeared over time.

    Secondly there’s the EU. I’m one of the thousands of British businessmen you referred to in the House last night, who will emphatically NOT withdraw his businesses from the UK in the event of exit. (And I could easily do so.)

    Finally there’s the perennial subject on here of immigration. For the moment I will say nothing more than that Frau Merkel embarked on an ill-advised strategy last week, which will come back to haunt her. And it certainly won’t do any harm to the ‘Leave’ campaign.

    I hope to make the occasional post on here when you write about something on which I have some knowledge and an opinion.

    Thank you again for your contribution to British political life over so many years.

    Reply. Many thanks for your views and kind words.

  28. Posted September 8, 2015 at 5:56 pm | Permalink

    Well done on passing the Third Reading of the EU Referendum bill. As you said in the past, their Lordships must let it pass because it is a manifesto commitment. Congratulations, too, on enforcing government purdah.

    Now for the campaign – taking no prisoners.

  29. turbo terrier
    Posted September 8, 2015 at 7:05 pm | Permalink

    If the government really want to support British car industry, try removing all the penalties associated with driving a Jaguar or Range Rover due to all these stupid greencrap taxes bought about by the stupid Climate Change Act, which was the first thing that should have been thrown out when the party returned to power. It is way past its sell by date.

    Regarding some of the off topic comments: Keep them drones flying. As for these so called politicians from the smaller parties squirming about the action, it begs belief. Thank God we didn’t have their kind around in 1939 they would have been rolling out the red carpet for Hitler. They are a disgrace to their country let alone ours.

  30. CHRISTOPHER HOUSTON
    Posted September 8, 2015 at 8:33 pm | Permalink

    http://www.ft.com/cms/s/0/9e9f9b44-3ffc-11e5-9abe-5b335da3a90e.html#axzz3lBEQJse8
    Tata appear to value the “Made in the UK ” stamp for its exports to China. I did not realise the UK could get out of having the umbrella stamp “Product of the EU ” . Looks like Tata actually favours Slovakia for production. Well Slovaks are already used to building Peugeot cars which, I notice when we have flooding here are the only vehicles merrily ploughing through the water leaving everyone in four-wheel drives stuck embarrassingly in a 4 inch deep puddle.
    Pity we can’t persuade Peugeot to build in the UK. Their windscreen wipers actually stop and start immediately too. I believe they have a patent on the device which other car manufacturers refuse to buy. Handy in rainy old Albion having a car fit for purpose in all respects.

    Reply There are many other car makes which work well in the rain! They would not sell many in the UK without wet weather capability.

  31. Posted September 8, 2015 at 8:37 pm | Permalink

    Even if say a 10% tariff WAS put in cars exported and imported from the UK, that would be a total irrelevance. It would just mean we bought a fewer Mercs and built more cars in the UK instead.

    Yawn yawn.

  32. Ken Moore
    Posted September 8, 2015 at 9:15 pm | Permalink

    I wonder if Chris Bryant Mp is going to apologise for falsely claiming his constituents ‘jobs would be at risk’ if the Uk comes out of the Eu.

    Why did Ford move Transit production from Southhampton to non Eu Turkey if membership is so important. It has been suggested that generous Eu subsidies to build the Ford plant in Turkey are to blame for the loss of the British jobs.

    http://www.dailyecho.co.uk/news/10020273.Ford_s___80m_EU_loan_to_boost_Turkey_factory___and_close_ours/

  33. Posted September 9, 2015 at 12:21 am | Permalink

    “there is no way we wish to end up with tariffs against German or French car imports into the UK”

    Tariff barriers are bad idea all round. I agree. But having tariff free trade does raise some interesting questions.

    If the big exporting countries like China, Singapore, Switzerland, Germany etc want to sell more to us than we sell to them and manipulate their currencies to achieve that end, how do we react?

    So far the UK has just let them. That does mean, though, that these countries do have to do something with the ££ they accumulate. They can’t just swap them for their own currencies or trade them for US$ or gold because that would cause the pound to fall. They don’t want that. They want to keep the pound high so we can continue to be their good customers.

    That means they are always net buyers of UK gilts. They buy government securities with their unspent pounds.

    Then what does the UK government do with the proceeds of these sales? Why, it deficit spends them back into the economy of course to keep the money circulating and complete the circuit. Money is rather like electrons in that respect. The electrons only have an electrical effect when they are moving along the wires.

    So ‘no tariffs’ does mean the UK government has to run a semi-permanent govt deficit. I’m fine with that. Is everyone else though?

    • Denis Cooper
      Posted September 9, 2015 at 10:15 am | Permalink

      Gilts are not the only assets which can be bought with pounds, are they?

      • Posted September 10, 2015 at 8:43 pm | Permalink

        There’s real assets like Rolls Royce jet engines and bottles of whisky! But purchases of those should show up in the trade and capital account figures.

        There are other govt financial assets on sale, like various stocks, but they are mainly in the form of gilts.

    • Edward2
      Posted September 9, 2015 at 6:23 pm | Permalink

      You assume we do not improve our offering, compete with others and rise to a challenge.
      The UK continues to prosper in many areas.
      Still one of the worlds top trading countries.

      • Posted September 10, 2015 at 8:23 pm | Permalink

        Edward2,

        You’re still looking at the trade deficit as if it were some sort of failure. It’s that word ‘deficit’ – I suppose.

        Left to the perfect workings of the free market all international trade would balance. Currencies would always self adjust to ensure that. Official trade and capital flow figures might not be perfect, though. It’s difficult to monitor all trade -especially illegal trade involving drugs and other forms of smuggling. Official trade figures are only a guide anyway. The currency market is just as much affected by illegal as legal trade and whatever the market says it is worth is exactly what it is worth – in a totally free system.

        But, once countries start to manipulate their currencies, trade no longer automatically balances. It’s obviously easier to manipulate a currency downwards. That distorts trade meaning that exports will exceed imports. It also means the population will have to put up with their currency being worth less than it should be worth. The price of all imported goods and even domestically produced goods will be higher as a result. Manufacturers won’t sell cheaper on the home market. Taxes have to be higher to prevent an influx of export money creating inflation. Spending by overseas buyers has just as much inflationary effect as any other spending in that respect.

        Manipulating a currency upwards involves a constant and expensive battle with the speculators as previous governments of both parties have discovered the hard way. That’s not to be recommended. But, if many countries such as the ones I’ve already mentioned plus Sweden, Denmark, Korea etc want to have a cheaper currency, and more exports, then other countries have to have a dearer currency and allow more imports to accommodate them. At present that means largely the UK and the USA. Both are running large trade deficits. The UK more than the USA in GDP terms.

        So is that a bad thing? It means the prices of all imported goods which also affects the price of locally made goods are lower as a result. That’s good. But it does mean that local manufacturers suffer from lower profitability. Money is leaving the country which adds to the deflationary effects of those extra imports.

        So, that’s where Govt and the general public have to be smarter about the money flows than they are. If we want the benefits of those cheaper prices for cars, computers, petrol etc we have to allow those flows to do just that. Money, like an electrical current, has to complete the circuit. That means governments have to be prepared to run continual budget deficits to make up for money lost to the economy and create extra aggregate demand so that local manufacturers don’t go out of business.

        If we aren’t prepared to do that we have to engage in currency wars by manipulating the pound to be a lower value. We have to put up tariff barriers against those big exporters to protect our local market.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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