Nissan in Sunderland

Debate between Lord Fox and Lord McNicol of West Kilbride

Tuesday 5th February 2019 Lords Chamber

[Lord McNicol of West Kilbride (Lab)]

My Lords, I thank the Minister for repeating the Statement made in the other place and must declare an interest as having bought a Qashqai for the very reason that it was made in the UK.

Nissan’s decision that the new X-Trail will no longer be built in Sunderland but instead in Japan is a bitter blow to the people of Sunderland and to the wider north-east. Close to 7,000 people are employed at the plant in Sunderland, with many thousands more along the wider supply chain and support services. Although the X-Trail decision does not impact directly on the existing workforce, it sets a worrying trend for the future.

What is interesting in the Secretary of State’s Statement is that the Government, as far as we are aware, are trying to pursue an industrial strategy that looks to develop a co-operative partnership approach with such an important sector—an initiative that we support and something that this side of the House has been calling for for many years.

Of course, Brexit was not the only factor in Nissan’s decision, and it would be dishonest to suggest that the issue of diesel did not play a part in Nissan’s thinking. However—and this is important—Nissan for the first time, through its European chairman, Gianluca de Ficchy, has brought to the fore the uncertainty of Brexit as a key factor. He said on Sunday:

“The continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future”.


That is a damning statement. The continued uncertainty is not helping.

What is more worrying is that the Government could help by ruling out the worst aspect of that uncertainty: that of a no-deal Brexit. The Government have the ability, the authority and the duty to do all they can to protect the interests of our businesses and economy.

Can the noble Lord confirm that the Government will actively engage with the trade unions and automotive manufacturers to protect what is now left? The truth is that the news of Nissan’s departure is not isolated and, in the coming months, more jobs and investment could well be lost in industries elsewhere across the UK. Only last week the Society of Motor Manufacturers and Traders announced that car production is down to its lowest level in five years: in total it has now slumped by 9%; and in the past year alone new investment has halved. What considerations are being given through the industrial strategy to ensure that other parts of the industry, such as Bridgend or Ellesmere Port, do not suffer in the same way?

Our automobile industry and wider manufacturing sector is in desperate need of assurances from the Government. They must finally rule out a no-deal Brexit, which in itself is the single most important decision they could take to remove that uncertainty.

Finally, why has no discernible progress been made on trade agreement negotiations, despite pledges otherwise? Where are we with the commitment that there will be no tariffs on British-made vehicles entering the EU?

[Lord Fox (LD)]

My Lords, I too thank the Minister for repeating the Statement. Just over a year ago Secretary of State Greg Clark launched the automotive sector deal. Things were a bit different then: in a confident, upbeat foreword, he said that,

“the government is investing in a new industry-led programme to raise the competitiveness of UK suppliers to match the best in Europe”.

Today’s Statement underlines how much things have changed. How can the Government claim to be raising competitiveness when uncertainty and delay make it impossible for businesses to plan and invest? Nissan’s comments underline its struggle to plan ahead. Manufacturers do not even know what tariffs they will face at the end of next month, never mind the supply chain friction that will confront them. They are having to plan shutdowns in April to take stock of the situation. That is hardly raising competitiveness, and it is a key reason why confidence in the automotive industry is plummeting and, as the noble Lord on my right said, investment is halving.

One of the foundations of the Government’s industrial strategy was to create the best place to grow a business. It is clear that the abject confusion over Brexit and the surrounding discussions is weakening communities and the strategy. As the Minister said, we had confirmation yesterday that Nissan has decided not to build the X-Trail in the UK. However the Minister and the Secretary of State seek to dress this up, that is not a vote of confidence in the Government’s strategy. As the Secretary of State acknowledged, it injects uncertainty into an industry that is very important for the north-east—uncertainty over 7,000 direct-employment jobs and approximately 35,000 in the supply chain.

In the Statement, the Secretary of State was clear that Nissan had located in the north-east,

“having been persuaded by Mrs Thatcher that the combination of British engineering excellence and tariff-free access to the European Union made Britain an ideal location”.

So, when the chill winds blew in the year before last, the Minister acted fast and secretly to seek to insulate Nissan. In 2016, in order to reassure the company, the Government made a deal, which included public investment of around £60 million, as we heard, and was sealed in a letter that the Government moved heaven and earth not to publish. They cited commercial sensitivity as the reason—until this week, when publishing suddenly suited the Government. I have a number of questions about that letter.

First, what was commercially sensitive before that is not so now, particularly when the Secretary of State goes out of his way to explain that the funding surrounds the Juke and Qashqai ranges but not the X-Trail? That range will continue, so any commercial sensitivity should surely continue, too. Secondly, and perhaps more importantly, did the Government notify the EU competition authorities about their deal with Nissan? If not, why not? I note that in 2001 some £40 million of support for the production of the Nissan Micra was cleared through the EU. What was different about this support?

The Minister stated that the Government’s fourth commitment is to the,

“strong common ground that exists between the UK and other EU member states”.

I suspect that we would question that. He also said that Her Majesty’s Government would,

“pursue a deal that could ensure free trade unencumbered by tariffs or other impediments”.

There is no sign that the Prime Minister’s red lines will allow this to happen—and clearly Nissan no longer believes the Government either. The reduced sector investment tells the same story.

The prime phrase in all this is “damaging uncertainty”. Faith is falling, even in the Minister’s own department. His colleagues in the other place sound increasingly worried about what is going on and whether the right of his party will drive the country over a cliff. Mr Harrington has called no deal a “complete disaster”, while Mr Clark warned that a no-deal Brexit would be “ruinous” to the economy. Can the Minister tell us the adjective he would use to describe it?

Timeshare, Holiday Products, Resale and Exchange Contracts (Amendment etc.) (EU Exit) Regulations 2018

Debate between Lord Fox and Lord McNicol of West Kilbride

Wednesday 21st November 2018 Grand Committee

[Lord Fox (LD)]

My Lords, this appears to be so uncontroversial that the noble Lord, Lord Foulkes, has left the room. However, I have a couple of questions. The Minister has done a great job in describing the limitations as well as the extent of this move. It is of course the limitations that concern me. One of the main ways in which timeshares, particularly non-British timeshares, are sold is in situ. In other words, people are sold to by people who literally come up to them in the street. It will not be clear to those individuals, who have been used to the process of being sold to and, in some cases, buying such products that the legal basis on which they are buying property will change. No longer will the contract be unified across the state. They will have bought a property in a foreign legal environment.

I make the same point as I made on the previous SI. That foreign legal environment will gradually diverge. It will diverge slowly or quickly, but it will change. It is clear that if that is how it goes, the Government and the industry have to work very hard to explain the legal complications that can arise from buying a property from a EU 27-based seller in an EU 27 country. It is not clear to me what is the legal redress if you buy a property from a UK-based seller in an EU 27 country. My suspicion is that it probably depends. That is another point on which serious information will be required to avoid people being mis-sold on that basis.

The Minister did not to any great extent address resale. Where does this leave the UK owner of an EU timeshare bought from an EU seller who comes to resell? It does not appear to me that this SI addresses this issue at all, but it is of great concern. Say the Minister had, in a fit of excitement, bought a timeshare on a golf course in the Algarve several years ago. He is shaking his head, but perhaps he should have done that—he would be relaxed. If he had bought that timeshare from a Portuguese seller, where does this leave him when it comes to the contract and process of resale? Where is the court of redress? Where is the process?

The SI is good as far as it goes, but it does not address the key consumer issues. Once again, it is consumers who will suffer. Whether we crash out or have a deal, the divergence will potentially create a significant downside for consumers. I would like to hear the Minister’s view on that.

[Lord McNicol of West Kilbride (Lab)]

My Lords, this is one of the more straightforward regulations. We can see that by the fact that we have lost my noble friend Lord Foulkes from our discussion. As was touched on, the main aim is to change references to “the EEA” to “the UK”, and similar changes in language from “official language of an EEA state” to “English”. At this stage, I cannot find much of substance to disagree with. However, I am sure my shadow BEIS colleagues may have some points to raise when this is discussed in the other place. Like my noble friend Lord Foulkes before me, I have just a couple of questions for the Minister.

First, much of the instrument deals only with replacing European references with domestic alternatives. However, the regulations will also ensure that contracts governed by the law of an EEA state will be treated in the same way as contracts governed by the law of non-EEA third countries. Did the Government consider any other option for EEA contracts?

Secondly, prior to the publication of this instrument, the Government chose not to carry out a consultation. This seems fair, considering the volume of secondary legislation and the relatively minor impact that this will have. However, it could be expected that the Government will have held informal conversations with those affected by the regulations. Will the Minister explain whether any such discussions, with industry or others, have taken place?

Thirdly, the Explanatory Memorandum claims that there is no impact on UK businesses. However, as a result of this instrument, businesses dealing with timeshares will surely have to acquaint themselves with the new regulations. Does the Minister not agree that, however minor, there will be some necessary adjustments for business to make?

Finally, on a similar note, does the Minister agree, like me, with the comments of his colleague the Secretary of State for Work and Pensions? This morning, she said that the UK will not be leaving on a no-deal Brexit as there is no majority in the other place for that to pass.

[Lord Henley]

My Lords, I remind the noble Lord that we had a referendum a couple of years ago and we agreed that we were leaving the EU. That was the manifesto that both the party I represent and the noble Lord’s party went to the country on in 2017. We are leaving the EU. It depends on what terms. These regulations are about dealing with the question: what will happen if there is no deal? We hope there will be a deal but if there is no deal, we want to make sure that the proper protections are there.

The noble Lord, Lord Fox, asked a number of questions which went slightly wider than the regulations in front of us. The important thing to say to anyone who is thinking of buying a timeshare, whether in this country or another, is that whatever they do, they must take all the proper legal advice. I have no plans, when I walk round a golf course on the Algarve—which I have never done and have no intention of doing—to buy a timeshare, but there are people who want to buy timeshares and they serve a purpose. Whatever they do, the important thing is to make sure that they are getting the right advice, either in this country, if they are buying it here, or in another country. I think we would all agree on that point. Where people have had problems, it is very often because they have bought in the manner that the noble Lord, Lord Fox, seemed to be suggesting—someone comes up to them while they are on holiday and makes this suggestion.

Now that we are leaving, what protection will UK consumers have when buying timeshares in Portugal? Obviously, it will depend on where the consumer bought the timeshare. UK consumers who buy timeshares under UK law will be covered by the protections in the existing timeshare regime. If they are buying timeshares in Portugal from Portuguese traders, they will generally be subject to Portuguese law and the protections that that member state extends to non-EEA nationals. Consumers will be encouraged to understand the specific conditions of the contract and to take all appropriate advice.

The noble Lord also asked: how do we prevent people being misled? Obviously, I share his concern for vulnerable consumers who are unfairly targeted by manipulative and misleading sales tactics in many industries, but particularly here. I believe that the current timeshare regime, reviewed and updated by the 2010 regulations, provides adequate protections for timeshare consumers. The regulations require that clear and comprehensive information is provided to the consumer before any contract is agreed; that information on termination must also form part of the contract; that timeshare buyers also have the option to change their mind within two weeks of signing a contract, during which no money can be taken; and so on.

The noble Lord, Lord McNicol, asked whether it was possible that there would be further changes. He will be aware that the European Union (Withdrawal) Act does not give us the powers to create any legislation or substantially change any retained EU legislation. The changes that this instrument would bring into effect are made in exercise of those powers, to remedy deficiencies in retained law and not to change the effect of retained law. But we know that many people have concerns about some of the protections. I can give an assurance to the noble Lord that my right honourable friend and others will always keep these matters under review if we feel that there are not the appropriate protections. This will always be a concern. The Government would act if necessary.