What do you do when democracy fails you?

The reports that Nissan are about to announce the cancellation of their proposed plans to build the X-Trail in Sunderland have led to a degree of comment. There are those who have rather unkindly suggested that the good people of Sunderland are paying the price for believing what they were told during the referendum campaign about the rosy prospects for the country outside the EU.

But, in a complex world, it is easy to believe those whose narrative reflects your perceived experience. After all, they’re telling you what you want to hear, feeding into years of unhappiness.

No, if such an announcement comes to pass, it will be a matter of some sadness for a community that has been forced to reinvent itself with little support from central government, and has had the guts ripped out of it by people who knew little of life in communities like Sunderland, or in so many other former heavy industrial towns and cities of the North.

The solution for the loss of heavy industry was two-fold - encourage foreign investment to create skilled jobs on the basis that we acted as a jumping off point into the European Single Market, and relocate public sector jobs to now struggling locations - Merthyr Tydfil, Bootle, East Kilbride, to name but three. The latter addressed two primary goals - reducing the cost of the Civil Service by removing tranches of work from the expensive South East, and creating jobs in deprived areas.

Reductions in the Civil Service paybill, combined with contracting out of more functions of government, have been a blow, and the current move towards reducing estates and focusing on regional hubs in bigger towns and cities won’t help. But, more importantly, putting foreign owned business facilities on the wrong side of an emerging tariff barrier risks jobs too.

In terms of Nissan, the signing of the new Japan/EU Free Trade Agreement offers three choices. First, with the tariff on car exports reduced, cars can be shipped to Europe directly from Japan. It doesn’t mean that they will, especially if manufacturing costs in Europe are competitive with those in Japan. Second, there is the option of moving car production into the remaining European Union, to benefit from remaining within the Single Market space.

It’s the third choice that is exercising some. At some point, Japanese car manufacturers operating in the United Kingdom were offered assurances by the United Kingdom Government. We don’t know what they were, but it might be reasonable to assume that the question of financial risk was at the heart of them.

Can the United Kingdom really offer an open-ended commitment like that, and how many other foreign investors would want to strike similar deals in return for staying in the country? That’s a challenge, and one which got little in the way of calm attention.

I don’t know how much of British industry is now owned, actually or effectively, by foreign investors, or how much of their production is sold within the EU-27, but I suspect that such companies employ a lot of people, many of whom will have been persuaded to vote Leave, even where their employers publicly acknowledged the problems that Brexit would cause them. The argument that, “they’re only saying that, they’ve invested too much in Derby/Oxford/Sunderland to move now”, is only valid where the impact of tariff barriers is, or is seen as likely to be, less than the cost of new plant and machinery somewhere in the European Union. And Slovak labour costs weigh that calculation against, say, Sunderland.

It could be that, in voting to leave the European Union, Sunderland inadvertently voted for the world to leave it. The bitter consequences of democracy, I fear, but with choices come consequences. Nobody ever said that they had to be desirable ones, but now is not the time for triumphalism. It never will be...