£800m in corporate welfare

Posted on 30 October 2017

A new report from Kevin Farnsworth, Nicki Lisa Cole and Mickey Conn reveals the cost of Nissan UK's sweetheart deals.

When we think of the welfare state, we tend to focus on citizens: pensions, unemployment benefits, healthcare and other services. However, taxpayer money also supports private businesses - not only through direct subsidies and grants, but also indirectly, for example through investment in infrastructure, transport links and education.

Oiling the wheels: Nissan, private investment and British corporate welfare, draws on public statements from executives, transcripts of parliamentary hearings, and government documentation to reveal the level of dependence of Nissan UK on the British government. The report shows that the company has extracted £800m in governent benefits and services since it began negotiating entry to the UK in 1980.

Declassified memos from the Thatcher administration paint a picture of a company of skilled negotiators on the one hand, and a government desperate to win much-needed investment to prop-up its ailing automotive industry on the other. The authors argue that this represents an emerging pattern of major transnational corporations forcing governments into inreasingly-exploitative deals.

The report raises questions about the loyalty, costs and contribution of companies such as Nissan. It asks whether such provision is sustainable and whether the UK can afford to increase corporate welfare handouts whilst cutting corporate taxation and imposing austerity on the social welfare state.

Recent developments suggest that Brexit has given the company even more bargaining power. It's likely that the government will have to craft a new and even more lucrative deal to keep the company in the UK.