The Nissan car plant in Sunderland employs 7,000 people and churns out more cars than the whole of the Italian motor industry. It is a jewel in Britain’s post-industrial crown, which perhaps explains why its chief executive felt confident enough to threaten the British government.

Without “commitments for compensation” should tariff barriers to mainland Europe spring up, Carlos Ghosn warned that future investment in the plant was at risk. Until he knows the outcome of the Brexit negotiations, he said, everything will be placed on hold, explaining that “important investment decisions will not be made in the dark.”

Mr Ghosn is one of the world’s finest auto executives, and under him Renault-Nissan has undergone a remarkable revival, but this comment is as short-sighted as it is foolish. Important investment decisions are always being made in the dark. By the time the answer is obvious, say that Europe’s motorists fancy buying little SUVs, it’s too late. The Qashqai was there at the right time to catch the trend.

While his disappointment at the Brexit vote – including from many of the 50,000 with jobs that depend on the Sunderland plant – is understandable, he might consider what has happened since. The outcome has produced a massive boost to Nissan’s profits. On June 22, each euro earned by a Qashqai was worth 77p. Today, each euro earned is worth around 88p, as sterling has slumped following the vote.

Even allowing for a significant increase in imported component costs, that is a dramatic competitive gain which no realistic outcome of the tariff negotiations with the European Union would come close to eliminating. Currencies fluctuate all the time, and if the markets start to see the advantages of our release from Brussels’ hegemony, sterling could climb. Who knows? Like Mr Ghosn, we are all making important decisions in the dark, but while the financial sun shines, he might refrain from trying to blackmail the British government.

Quite beyond our Ken

As an indication that there’s no economic tonic like an unwanted devaluation, Britain’s forced exit from the Exchange Rate Mechanism is a model. Serialising his memoir in The Times, Ken Clarke tells the story of Wednesday September 16, 1992. In the shambles of early evening on Black Wednesday, with interest rates jacked up to 15 per cent, he relates how Douglas Hurd, then Foreign Secretary, insisted that we could not leave the ERM without permission from the European Union’s monetary committee. The treaty rules demanded that it would have to be obtained by sending a treasury official to Brussels to ask for it. Even at the time, this was self-evidently absurd.

Writing in the same slightly jocular way that he speaks, Clarke concludes: “We were now a government with its economic middle stump flying through the air.” This has turned out to be a particularly poor analogy. Not only was he not out, since he went on to become a rather successful Chancellor after the holder on that day was fired, but the devaluation triggered 15 years of economic growth and gathering prosperity. The inflation that so many had warned would follow a plunge in the pound never arrived.

The puzzle, in the light of Mr Clarke’s comments, is why he remains a passionate europhile. Britain’s fall from the ERM allowed us to learn before it was too late that linking the currencies of disparate economies is a recipe for misery and strife. Our unfortunate neighbours are still finding out.

You’re just another cost

Fund management is a rum old business. Apparently, having a mere $127bn to run with is “sub-scale”, so Henderson is taking over an American outfit called Janus, with a mere $195bn on its books. This will eventually produce $110m of economies of scale, mostly from combining funds and firing the managers, to help this transatlantic pantomime horse cut costs to compete with tracker funds. It is unlikely that much of the cutting will impact Janus’s Bill Gross, whose pay is not disclosed, but who was paid hundreds of millions of dollars in his last job. By comparison, the £6.5m headline pay of Andrew Formica, Henderson’s CEO, looks almost parsimonious. Clearly no scope for cost-cutting there, then.

This is my FT column from Saturday

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