A row has broken out over Toyota’s decision in March to commit £240 million to upgrading its plant at Burnaston, Derbyshire, after politicians called for the publication of a letter apparently containing reassurances made to the carmaker by the business department.
Nicky Morgan, in her first outing as chairwoman of the Treasury select committee, said that publication of the letter would provide clarity “as the assurances may cost the taxpayer money”.
Rachel Reeves, her counterpart on the business committee, who is also new to the job, said: “It is vital that the government is not seen to be cutting sweetheart deals or granting special favours.”
The existence of the letter, which was written to the Japanese manufacturer ahead of the decision to invest in the Burnaston plant, was revealed by Reuters. Neither Toyota nor the department were prepared to comment. An attempt by Reuters to see the letter, using a freedom of information request, was refused, with officials saying that any information was “both highly commercially sensitive” and “would be likely to cause harm to the company’s commercial interests if disclosed”.
The revelation mirrors a letter sent to Nissan last year when it decided to build two new models at its car plant in Sunderland.
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Greg Clark, the business secretary, who has tried to reassure foreign carmakers concerned about trade with Europe after the UK’s withdrawal from the EU, has said that he will release the Nissan letter when it is no longer commercially confidential.
Toyota, which builds about 10 per cent of the 1.7 million cars made each year in the UK, announced the investment in March to fit new equipment, technology and systems at Burnaston after the government pledged to provide £21.3 million to support skills and training, research and development and innovation there. The department has confirmed that a letter was sent to Toyota ahead of the decision. A source quoted by Reuters said that Toyota had received “a similar set of warm words as Nissan” on electric vehicles, commitment to further training and to ensure the competitiveness of the British car industry.
At the time the investment was announced, the head of Toyota in Europe said that tariff-free access from the UK to the Continent was vital to the future success of the plant.
The industry has warned the government that a so-called hard Brexit and the ending of trade ties could have a damaging effect. Other carmakers have continued to invest in the UK since the referendum. They include Jaguar Land Rover, which is owned by Tata of India.
Toyota builds the Auris hatchback and the Avensis family car at Burnaston. It established its first business in the UK in 1989 and has invested £2.5 billion in its two plants at Burnaston and Deeside in north Wales.