The Japanese Government’s intervention in the debate about Britain’s future relationship with the EU – as reported in these pages yesterday – may have been unexpected, but it was also timely.
For just a few days earlier, the North East was celebrating the latest good news involving a Japanese-owned inward investor.
Hitachi Rail Europe’s securing of a £1.2bn contract to build trains for the East Coast Main Line was a tremendous boost for the region’s economy, with the deal effectively providing orders for the firm’s new Newton Aycliffe factory until the end of the decade.
It will also mean the ageing fleet of Intercity 225 trains that have been ferrying folk up and down the line for nearly three decades will finally be replaced rather than refurbished: good news for passengers, who will enjoy more comfort and faster journeys.
It is great that the sparkling new County Durham factory will be building trains for the benefit of UK passengers. But in reality Hitachi’s enormous investment in the UK has even grander ambitions: the Japanese firm wants this factory to be a train workshop for the whole of Europe.
Which brings us back to the warning from the Japanese government. In its submission to the Foreign and Commonwealth Office, it says some 130,000 UK jobs could be at stake if Britain pulls out of the European Union after the planned referendum. It says inward investors would simply look to go elsewhere if the UK no longer provided a gateway to European markets: a frightening prospect for a region such as the North East whose economy depends so heavily on Nissan and its supply chain.
Eurosceptics counter that there is little prospect of tariff barriers being erected should Britain go it alone: Continental firms could ill afford to find the lucrative UK market closed off to them in retaliation. But others question why we’d even encourage the prospect of a trade war at a time when so many of our exports head to our nearest foreign markets.
The CBI is gathering members’ views on ramifications of a UK exit, but there is no doubt many of this region’s largest employers are concerned.
As we say today in our response to the first six reports in the Review of the Balance of Competences examining the UK’s relationship with the EU: any EU reform agenda should focus on growth and jobs.
That means retaining access to the single market, expanding that market fully into the service sector and push- ing ahead with trade deals – not building barriers with the Japanese or any others who want to come to our region and create jobs and wealth.
:: Andrew Hebden is assistant director of CBI North East