The strongly worded message from the Japanese government to the United Kingdom and European Union on Brexit was both predictable and concerning. During the referendum campaign many Japanese companies warned of the uncertainty that a ‘Leave’ result would cause and also that it would mean a reassessment of future investment plans in both the UK and EU.
Japan is a major investor here. In my own constituency, plans to build a new nuclear power station are moving ahead by Hitachi/Horizon. This is a multibillion pound investment, important to the local, regional and national economy. Hitachi took over Horizon Nuclear Power after the German joint venture between EON and RWE pulled out. It then moved its European headquarters to the UK and, along with new nuclear, has major investments in the north-east of England in the manufacture of trains.
While the company has been clear that Brexit will not affect any of its current investment and business plans, it is looking to the future and, like all Japanese companies, wants certainty and clarity as to what Brexit means.
The Japanese government’s intervention is apt given that business from Japan has created 440,000 jobs in Europe, many of which are in this country, and nearly half of Japanese investment in 2015 that came to Europe flowed to the UK. The Japanese government has made a strong request to both the UK and EU that market integrity is maintained and the UK continues to be a gateway to Europe.
Horizon’s plans to build a new nuclear plant – Wylfa Newydd – on Anglesey is well under way, but it is not anticipated to make a Final Investment Decision until 2019. That said, it is continuing to spend on all the necessary consents for the site. The Wylfa Newydd project is engaging with local and national companies on site clearance and skills training in order to creat thousands of jobs. Such commitment does require business certainty.
When Horizon/Hitachi embarked on the project the UK was firmly in the EU. The EU-Japan Economic Partnership Agreement is currently in the negotiations stage, so it is reasonable for Japan to ascertain the positions of both the UK and EU, and therefore it is willing to cooperate so that the process of the UK’s withdrawal moves forward smoothly without causing any serious disturbances to the world economy.
When pro-‘Remain’ figures, including myself, raised the issue of Brexit and the uncertainty it may cause, we were dismissed as scaremongers. The new prime minister in her first encounter with the Japanese prime minister had a cordial meeting, but there is no doubt that the decision for the UK to exit the EU will have a profound affect, not just on Anglesey or the UK, but within the EU and indeed the global economy beyond. The UK and EU economies are recognised as an integral part of the world economy. Japan is aware of this, as are the people I represent on the Isle of Anglesey. They too have concerns for the future and want an open and transparent Brexit process to restore business confidence so that the UK remains open for Japanese business.
This post can also be seen as an article on the Progress website at: http://prog.rs/8dm