MRS THATCHER intervened in a dispute between two senior Cabinet ministers to save Nissan’s plans to invest in the North-East, confidential correspondence has revealed.
In January 1984, the Conservative Prime Minister secured a massive investment pledge from Nissan which eventually led to the construction of the Washington plant on Wearside, still one of the North-East’s biggest and most successful employers 30 years on.
Mrs Thatcher is said to have personally lobbied Nissan boss Katsuji Kawamata and Japanese Prime Minister Yashuhiro Nakasone to land the deal.
But in the run-up to the 1984 Budget, a Cabinet rift between Chancellor Nigel Lawson and Trade and Industry Secretary Norman Tebbit threatened the project, papers released today (Friday, January 3) reveal.
Mr Lawson was pushing for dramatic changes to corporation tax, including the abolition of capital allowances which permitted the tax-free purchase of industrial machinery.
This was a major selling point for the UK and Mrs Thatcher had used it to persuade Nissan to invest without unfeasibly high first-year costs.
Mr Lawson’s plans would have cost Nissan up to £27.5m by 1986, which would have taken years to recoup.
In a letter dated February 27, 1984, Mr Tebbit warned Mrs Thatcher the change threatened to damage the project and the economy and expose the Prime Minister to accusations of a breach of faith.
Mrs Thatcher wrote in the margin that she agreed, noting: “I continue to see this as a greater problem than the Chancellor suggests”.
The final Budget included the removal of capital allowances, but Nissan got a special deal modelled on Regional Development Grants.
Reacting to the news last night, Martin Callanan, Conservative MEP for the North-East, said: “We all know the central role Margaret Thatcher played in bringing Nissan to the North-East.
“It’s been one of the outstanding success stories of the region, due to the outstanding people who work there and the excellent work they do.
“It was a very far-sighted decision of Mrs Thatcher for which everybody in the North-East should be pleased.”
Reflecting on Mr Lawson’s time as Chancellor in her memoirs, Mrs Thatcher said he was a natural gambler.