Ministers condemned for hiding £61m aid package for Nissan to build new cars in UK after Brexit

Letter revealing the financial support is finally released – more than two years after No 10 insisted had been no ‘special deal’

Ministers have been condemned for keeping secret a £61m aid package for Nissan to build new cars in the UK after Brexit, after insisting there had been no “special deal”.

Greg Clark, the business secretary, came under fire as he announced the Japanese giant would have to reapply for the cash, after its shock decision to abandon production of the X-Trail SUV at its Sunderland plant.

A letter revealing the package – originally set to be up to £80m – was finally released, but only “after the press had got hold of it”, senior Conservative MP Nicky Morgan protested.

Yet, when rumours of a “sweetheart deal” first broke in October 2016, Theresa May’s deputy spokesperson had insisted “there was no special deal for Nissan”.

Labour said the letter also revealed “strong assurances that manufacturers would still be able to trade without barriers” – pledges broken, it said, by the prime minister’s determination to leave the EU customs union.

Eloise Todd, the head of the anti-Brexit group Best for Britain, said: “This Brexit bribe has come back to bite the government.”

Ms Morgan, writing in her capacity as the Conservative chairwoman of the Treasury select committee, demanded to know why Mr Clark had kept secret “direct financial assistance from the government to Nissan”.

“How much of the £61m is not going to be paid over?” she asked, during a Commons statement on the controversy.

Ms Morgan also demanded to know why Nissan had apparently been allowed to “decide that something is still commercially sensitive, two years after the event”.

In response, Mr Clark revealed that only £2.6m had been paid out so far – “about half for training of the workforce and half for environmental improvements to the plant”.

And he told MPs: “Of course, the company will need to resubmit on the grounds of the new information that it has.”

That new information, which emerged over the weekend, is that production of the X-Trail will be moved back to Japan, a decision partly caused by the Brexit crisis, the company said.

The decision is a further blow to the UK car industry, following recent moves by Ford, Jaguar Land Rover and Honda to reduce their workforces and cut costs.

Mr Clark said the decision meant that 741 planned extra jobs would no longer be created at Sunderland – although there were “no implications for existing jobs”.

And he admitted: “They [Nissan] also pointed out what they’ve said consistently since 2016, that a risk of a no-deal Brexit is a source of damaging uncertainty.”

Mr Clark, who has hinted he will resign if the UK looks like crashing out of the EU without an agreement, added: “No deal is fully acknowledged, certainly by me and the industry, as being ruinous for our prospects.”

The controversy blew up on a day when:

* It was announced that UK ports will wave through goods from the EU without checks if there is a no-deal Brexit, to avoid huge traffic jams.

* It was revealed that the prime minister will hold talks with business leaders in Northern Ireland on Tuesday, and its political leaders the following day.

* Lord Trimble, the former Northern Ireland first minister threatened to take the government to court over the Irish backstop, claiming a breach of the Good Friday Agreement.

* Angela Merkel, the German chancellor, raised hopes in Downing Street by saying a Brexit deal could be agreed if people were “creative” and if “there’s enough good will”.

* A poll found that 45 per cent of voters back delaying Brexit beyond the scheduled date of 29 March to allow time to negotiate a better deal.

Mr Clark defended the secrecy on the grounds that Nissan had been promised the aid would only be revealed “when the company said it was no longer commercially sensitive”.

It was offered in return for a decision to build the Qashqhai and X-Trail models at the flagship northeast plant. The first car will still be built there.

At the time, Mr Clark had said: “There is no question of financial compensation over tariffs because we have said that what is necessary is that we are going to maintain the competitiveness of the sector, and we are going to get the best deal possible.”

Rebecca Long-Bailey, Labour’s shadow business secretary, accused the government of planning “managed decline’, saying: “Of course Brexit was not the only reason but it was pretty prominent in Nissan’s decision.”

She said Mr Clark’s “quiet opposition to no-deal Brexit is of course well known, but still the juggernaut of government chaos hurtles on.”