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Future of Nissan grant unclear

PRIME Minister David Cameron yesterday said he wanted electric cars to be developed in Britain but could not say if a £20m grant pledged to Japan’s Nissan was safe, Reuters reports.

Nissan said in March it would begin building the Leaf electric compact car at its Sunderland plant in northeast England from early 2013, making Britain its third global production site for the zero-emission vehicle.

The former Labour government pledged a grant of £20.7m in support of the investment, which was also backed by a proposed finance package of up to £183m from the European Investment Bank.

The new Conservative-Liberal Democrat coalition government that took power after the May 6 election is searching for savings to rein in a budget deficit of around 11% of gross domestic product.

Newspapers have reported that the Nissan grant and other government funding for the car industry could be at risk as the new government reviews spending decisions taken by the former government.

Cameron could not confirm whether the new government would honour the grant when asked about it by a local MP during his first prime minister’s question time on Wednesday.

He said it was an “absolute wonder” to see the investment that had gone into the Nissan plant and the jobs that had been created there and in its supply chain.

“I want to see electric cars being developed. When I was at Nissan we discussed that specifically. In terms of the grant, I don’t have a specific answer for (you),” he said.

Facing jeers from opposition politicians, he said he wanted to give accurate answers and would write to the MP to let her know as soon as possible.

The British unit of Nissan said last month it was confident the new coalition government will keep the loan in place.

“It is our understanding that an agreement has been made with the Department of Business, Innovation and Skills (BIS) and that the new coalition government is fully supportive of progressing a greener economy and zero-emission transport will be at the heart of that,” a Nissan UK spokeswoman said then.

This was posted in Bdaily's Members' News section by Ruth Mitchell .