Automotive Industry

– in the House of Commons am 12:50 pm ar 12 Gorffennaf 2023.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy 12:50, 12 Gorffennaf 2023

I beg to move,

That this House
recognises that the automotive industry is the jewel in the crown of British manufacturing and believes it can have a bright future creating good jobs for people across the UK;
regrets that after 13 years of Conservative neglect the UK risks losing this world-class industry, putting thousands of jobs under threat;
condemns the Government for its lack of an industrial strategy and the negative impact this has had on investment in the UK’s automotive sector;
calls on the Government to urgently resolve the rules of origin changes which are due to take effect in 2024, working with partners across Europe to negotiate a deal that works for manufacturers;
and further calls on the Government to adopt an active industrial strategy to build the battery factory capacity needed to secure the automotive sector for decades to come.

It is a real pleasure to open this debate on an issue that I know is close to the hearts of many colleagues and constituents. Many Members present represent some of the most iconic names in UK automotive production. For me, it is very much an issue of huge personal significance. Sunderland, where I grew up, is of course renowned not just for its wonderful football team but for the tremendous success of the Nissan plant. I am very proud to say that many friends from my childhood still work in that plant. Of all the great businesses that I get to visit, that is one of my absolute favourites, and I know that colleagues will feel just as strongly about the parts of the automotive industry that they and their constituencies are associated with.

That industry is full of skilled and committed workers, innovation, export success and huge growth potential. However, we have called this Opposition day debate because even the most ardent defender of the Government could not fail to be worried about the health of the sector as it stands. The British car industry should and could be booming, as should the wider automotive sector, yet production has slumped by over a third under the Conservatives. There are huge concerns about a series of major policy failures, including domestic battery production facilities, trade barriers post Brexit, and higher energy costs and other supply chain issues. Although this is an Opposition day debate, I know that those concerns are shared widely across the House, and I hope that, by having this debate, we are able to express the clear political commitment of this House to that crucial sector.

Photo of Mark Tami Mark Tami Opposition Pairing Whip (Commons)

My hon. Friend will be aware of the world-class Toyota engine plant in my constituency that produces the highest-quality hybrid engines—one of the first plants outside Japan to do so. Does he agree that hybrid is part of the solution, not, as the Government think, part of the problem?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I do not know whether I am supposed to declare an interest, but I drive a Toyota hybrid myself—I have a large family and have to get between Manchester and London, and that is a pretty sound option for doing so. I am aware of the issue that my hon. Friend raises, as is the shadow Transport Secretary, my hon. Friend Louise Haigh. We must be careful to ensure that there is certainty so that that transition we are all seeking can happen. I know that there are particular issues relating to that sector and that side of the industry. We are alert to those issues, and we will, of course, work with him, his constituents and the expertise in this country and beyond to ensure that that timescale is done properly. For many people seeking to make the transition—we are seeing a huge response from the public on that—that is the option that is currently available, particularly for families. We must bear in mind that the solution has to be something that works for all our constituents, and we must be cognisant of their concerns. I am grateful to him for raising that point at this stage of the debate.

I worry at times that the Government, and maybe especially the Secretary of State for Business and Trade, do not have a great deal of time for industry at all. Artificial intelligence, tech and financial services are all crucial sectors, but we should not for one moment think that there is no role for industry. Nor should we ever believe that there is a false choice between services and manufacturing. Support for the automotive sector is not nostalgia. Many of the plants that we will talk about in the debate are the lifeblood of their communities, providing good work and good wages. However, just as in other crucial industries—steel is another good example—I get no sense that securing the long-term future of the sector and managing the transition to a low-carbon economy are priorities for the Government.

That is not just the view of the Labour party; it is what industry itself has been telling the Government. Mike Hawes of the Society of Motor Manufacturers and Traders said at its recent conference:

“We…need a…response urgently”.

Stellantis has warned that:

“If the cost of EV manufacturing in the U.K. becomes uncompetitive and unsustainable, operations will close.”

The automotive industry faces a series of challenges that must be taken seriously. The rules of origin, which are due to come into force from January next year, will require 45% of a vehicle’s value to be made in the UK or the EU or a 10% tariff will be imposed that will destroy most profit margins entirely. Of course, those requirements increase significantly over time. We have a lack of progress on battery manufacturing; Germany already has 10 times the battery-making capacity of the UK. We have wider business challenges, including the highest industrial energy costs in the G7, and rising inflation and borrowing costs.

However, what we have seen from other countries is that none of those challenges is insurmountable. Other countries are pulling ahead. China is home to numerous battery giants such as CATL and BYD, while the United States famously has Tesla. But the EU has also ramped up battery production through initiatives such as the European Battery Alliance and how has 35 battery factories in place. In contrast, the UK is yet to develop a robust battery manufacturing sector, which makes us heavily reliant on imports and risks the long-term presence of automotive production in this country.

I think we all recognise that, over time, vehicles will be built where the batteries are made, not the other way around. We will never be able to match the sheer fiscal firepower of the US Inflation Reduction Act, but we do have advantages—competitive advantages on workforce and skills, and on research and development—and if we had a Government with sufficient political commitment, the future could be very bright indeed.

Photo of Gareth Johnson Gareth Johnson Ceidwadwyr, Dartford

Last month, I visited the new Caterham Cars production plant in my constituency, to which the company has had to move because its production is insufficient to meet the demand that it has at the moment. It will take on more employees and apprentices, and it will manufacture more of the vehicles for which it is famous. I remind the shadow Secretary of State that that expansion in the industry has happened under a Conservative Government. Does he welcome that news?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I am incredibly happy to welcome that news and the positive story that the hon. Member sets out, but I do not think that any of the success that he has seen detracts from the fact that there are significant policy challenges. The overall number of vehicles has declined, as he will know, and yes, the pandemic and the semi-conductor supply chain issues happened, but that does not remove the need for this House to take seriously the rules of origin, the battery-making capacity and so on. We are not in any way on track. There is also, frankly, the international competitive position. Other countries are simply indicating that they want those industries and that investment much more than we do. It is not so much that the Conservative party has turned up to a gunfight with a knife, but that it is not showing up to the fight at all.

What we need is a plan of action. That is what the Labour party has developed, and it is what we want the chance to implement should we form the next Government. Our plan addresses battery capacity and charging infrastructure, as well as key issues such as planning and grid regulation. We are up front about the challenges that we face, but we are ambitious for the future. Frankly, that is nothing short of what is required. Our plan starts with having an active industrial strategy. I know that some Conservatives do not like that kind of terminology, but I say simply that all countries need an industrial strategy. To go back to the example of Nissan, that was part of an explicit strategy—by even Margaret Thatcher’s Government—to attract automotive expertise to the UK. The absence of any coherent modern industrial strategy is hurting investment into the UK.

Other countries are simply pushing ahead, recognising that the challenges that we are facing have to be met nationally by Governments with skin in the game. Industry is crying out, first, for stability, and secondly, for a partner and some clear policy signals. That is exactly what it will get from a Labour Government. That is why we have said that we would put the new Industrial Strategy Council on a statutory footing, giving some reassurance that the instability of the Conservative years is at an end.

Our green prosperity plan will part-fund the battery-making gigafactories that are so essential to our future. That will be catalytic public investment to unlock the much greater sum of private investment we need. The reality is that no battery factory in the world has been developed without that kind of Government commitment. We know that the Government are in talks with some firms about potential investment decisions, and I say in good faith to Ministers, “That is good. We want you to succeed.” Where those companies need assurances from the Opposition should a change of Government occur, we will of course have those talks. However, it would be far better and a far better deal for the taxpayer to make those offers publicly, and to be negotiating with a range of potential partners to get the best deals for Britain, because domestic battery production is so important.

Photo of Mike Amesbury Mike Amesbury Llafur, Weaver Vale

Could the shadow Minister clarify how many gigafactories this Government have enabled to be built in the UK?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I am more than happy to. My hon. Friend will know that we currently have one facility, which is the Envision facility at Nissan in Sunderland. The overall number will depend on how big those factories are, but broadly we will need three to four in the interim, and by 2040 we will need eight to 10.

Germany, for instance, already has four to five gigafactories up and running. A further four are almost up and running, and it is in talks for a further advance on that position. The sense is that Germany is genuinely 10 times ahead of us in that capacity, and while people might think, “Well, Germany is a country with incredible automotive history, reputation and strength”, there are other countries that we are already losing out to. Spain, for instance, has a very active industrial strategy when it comes to the automotive sector, and eastern Europe has had tremendous success in that area. Because automotive is about regional markets, simply seeing what other countries are doing will have huge consequences for the potential for investment in this country. Crucially, we should be playing to the UK’s strengths in areas such as research and development, like the fantastic programmes at the UK Battery Industrialisation Centre in Warwick, which my hon. Friend the Member for Sheffield, Heeley and I were able to visit recently.

Photo of Mark Tami Mark Tami Opposition Pairing Whip (Commons)

My hon. Friend has rightly talked about producing batteries, but the position with hydrogen is very similar: if we look at what Germany is doing, particularly with buses and bigger vehicles, we are years behind. We really need to invest in that area.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I thoroughly agree—the scale of ambition that I see around the world daunts me when I compare it with this Government’s ambition. There are some incredibly exciting technologies out there, including sodium-ion batteries that would reduce our dependence on lithium and almost certainly cut costs in battery production. Hydrogen is clearly going to be extremely exciting, as are fuel cells, and there are markets for off-road vehicles that could be huge potential markets for the UK. We should also not forget buses: that is an area in which new technology could contribute to things like cleaner air, as well as better transport.

Photo of Greg Smith Greg Smith Ceidwadwyr, Buckingham

Does the shadow Minister agree that on top of battery innovation and hydrogen innovation, the UK is leading in another field: that of synthetic fuels? However, giving the automotive sector a really strong future in this country involves a whole-system analysis, not just of how the vehicle is manufactured but how the energy that will run it is manufactured. That involves looking again at the zero tailpipe standards that are coming in, because if we have that whole-system analysis, we will get to green technology and greener transport but with a whole-picture effect.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I agree with part of what the hon. Gentleman has said. I agree about the whole-system analysis: many parts of the decarbonisation journey that industry will need to take on will be a much bigger question than simply unplugging one form of old fossil fuel technology and plugging in another. For instance, the steel industry will have to think about scrap if it is to make the conversion to electric arc furnaces; and if we are to move towards synthetic fuels, we will clearly have to look at where the feed stocks are coming from.

However, one of the most defining features of the past 13 years—I say this without any kind of partisanship—has been a series of very ambitious targets from this Government in areas that relate to decarbonisation, but with no real means to deliver them. That target is then pulled away, and confidence in the British state to decarbonise falls apart. I am thinking particularly about the famous “cut the green crap” comments from the former Prime Minister, David Cameron, regarding home insulation. When we talk about changing existing Government policy, we should not underestimate just how little confidence the international business community has in this Government’s promises at times. Broadly, the approach has been very ambitious targets but with no means to actually deliver them, which undermines the case.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Cabinet Office), Shadow Minister (Culture, Media and Sport)

My hon. Friend is making a very effective speech. As he is talking about targets, will he come on to the roll-out of charging points? My constituency has three motorways in it and incredibly high levels of pollution. We need to remove all the barriers, both to net zero and to reducing that pollution. Does my hon. Friend agree that constituencies in the north such as mine need that situation addressed? It is shameful that, as I understand it, more chargers were installed in Westminster this year than across the whole of the north of England. We in the north have those issues of pollution, and we need to move faster in addressing them. My hon. Friend may be planning to come on to that point, but it is an important one.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I am incredibly grateful to my hon. Friend for making those points. The approach of the Front Bench—from her, from me on industrial policy, and from my hon. Friend the Member for Sheffield, Heeley on transport policy—must bring those two things together. We need the policies in place that will make this country a world leader in the production of vehicles and ensure that it also works for consumers. She raises the fact that there are more charging points in Westminster—I know my hon. Friend’s constituency, which is not far from mine—and the difference between comparable parts of this country, north and south, in the level, density and availability of chargers is unthinkable, let alone in comparison with Norway, for instance. Not only do we not have enough chargers but grid, maintenance and connection issues often mean they are out of order. I absolutely assure my hon. Friend that when we as a shadow Cabinet and a potential Government think about these issues, both vehicle production and consumers are paramount. Clearly, consumers want to purchase electric vehicles—that is the growth part of the market—but too often we do not have the infrastructure in place. It cannot be some form of novelty. I have driven electric vehicles around Greater Manchester when it was something of a novelty—I could get access to chargers and, at times, preferential parking spaces near Deansgate, which is no small thing—but for mass market usage, neither the policies nor the infrastructure are yet in place. That needs to be widely recognised.

On the international trade position, it was always imperative to have a domestic battery industry, but it has become an existential issue because of the Government’s approach to our trading relationship with the EU. As discussed in relation to regional export markets, eight in 10 vehicles made in the UK last year were exported, so it is widely recognised that the impending cliff edge in the trade and co-operation agreement with the EU on rules of origin is a serious challenge to the future of the sector in the UK. The Government have been far too slow to realise the scale of that danger, and while they may promise that a deal is coming soon, I am afraid that “soon” cannot come soon enough. Major UK manufacturers including Stellantis, Jaguar Land Rover and Ford have all warned that a failure to reach a deal would cost jobs in the UK.

It has been two and a half years since the trade and co-operation agreement was formally signed. That is precious time that could have been used to plan and prepare, but those are two words that this Government often fail to understand. What have they done in that time? They have not secured investment in battery capacity. They have not improved our relationship with our biggest export market, and they certainly have not worked with industry to find solutions.

We know that a breakthrough is needed, and we would use our plans to make Brexit work to ensure that the rules of origin work for British manufacturers. We cannot achieve a compromise without working with our partners in Europe, and I believe that only Labour can be that good-faith partner. Our plan to invest in battery capacity, alongside compromises on the rules of origin, is the sensible way forward to meet our climate objectives and trade obligations and retain our industrial base.

We will make the UK a clean energy superpower by 2030, with net zero carbon electricity lowering costs for the UK car industry by no longer leaving UK industry prone to the volatility of international gas prices, alongside better grid connections and planning reform to ensure that “made in Britain” does not become a thing of the past. That is the prospectus for action we need. Right now, this country needs some optimism. The mantra of this Government—that this is as good as it gets—is as depressing as it is wrong.

Photo of Luke Evans Luke Evans Ceidwadwyr, Bosworth

There is a news report about a new global company being launched by the French motor giant Renault and the Chinese manufacturer Geely that will invest €7 billion here, creating 19,000 jobs. Is that not exactly the kind of optimism Conservative Members talk about?

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I think those companies must have seen the opinion polls and are wondering whether a Labour Government are coming, if there is as positive news as that could be. I would simply say to all Conservative Members that, on any aspect of industrial policy, there is too often on their side a desire to pick individual stories or statistics and try to pretend that substantial and significant issues do not exist. If we talk to anybody reasonably objective in this sector, they will point out—on battery production, rules of origin, charging infrastructure, industrial energy prices—that there are real challenges and they require some serious engagement from the other side, which to date has not been forthcoming.

Photo of Matt Western Matt Western Shadow Minister (Education)

I would like to add to that comment—my hon. Friend is making an excellent speech, by the way—what was said at the industry conference held by the Society of Motor Manufacturers and Traders a couple of weeks ago. The industry was speaking as one, and I am afraid it was critical of the Government, saying, “All these years on, remember that Baldrick at least had a cunning plan. Sadly, the Government don’t.”

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I followed that conference very closely—my hon. Friend the shadow Transport Secretary spoke at the conference, and I have spoken at that conference in the past—and that was absolutely the sentiment. Perhaps humility does not come easily to Conservative MPs, but I ask them to take on board those genuine views from the industry on the situation we find ourselves in.

The automotive sector could be a practical illustration of the transition to new jobs and new opportunities that we all want to see. We have laid out our plan for the sector. Some Conservative colleagues may disagree, but let us have from them some alternative proposals, because the status quo will not do. Our motion is a plan to deliver £30 billion in economic growth in the parts of the country that need it most. It is a plan that could create 80,000 additional jobs—good jobs of the kind that people can raise their family on. It is a plan for Britain that would mean we once again lead the pack and feel confident for the future. I believe the choice is clear—a plan under Labour or further decline under the Conservatives—and I think we all know whom the public would prefer behind the wheel.

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office) 1:12, 12 Gorffennaf 2023

What a disappointing opening speech. There was an opportunity to praise, promote and protect the automotive sector—and to talk about all the positive news stories—but all we have heard for the last 10 or 15 minutes was the automotive sector being talked down. I appreciate that the timing of this debate has not gone well for the Opposition: as my hon. Friend Dr Evans mentioned, today we have heard about the Renault Group and Geely having chosen the UK as the headquarters of a new company developing ultra low emission engines and potentially investing billions of pounds in the UK—up to €7 billion. That shows not only the confidence of the automotive sector, but its commitment to the UK, and these are the opportunities or the stories we should be talking about.

Jonathan Reynolds constantly referenced the SMMT statistics, but he forgot to mention the ones he should have reported at the Dispatch Box so that we could once again promote how healthy and dynamic the automotive sector is. Car production in Britain rose for a fourth straight month in May. The SMMT has confirmed that a total of 79,046 cars rolled out of the factory gates a few months ago, which is an increase of more than 26%. Passenger car numbers are boosted by a greater appetite for hybrid electric motors built in Britain. The bosses at the SMMT have said that, while there have of course been challenges around the world, manufacturers have

“defied the challenging economic backdrop to fulfil customer demand for the latest British-built models, at home and overseas,” so that manufacturing and production are indeed up.

This is a positive news story, and any opportunity we have to speak about the automotive sector should be positive, not negative or all about political point scoring. This is a serious topic and a serious industry. I know the hon. Gentleman is keen to be very ideological within the Westminster bubble, but I would suggest he steps a little outside it. I know my hon. Friend Mrs Wheeler, who is a champion for Toyota, which has the largest manufacturing plant in her constituency, would welcome a visit by Labour Members so they can see how the sector is booming just in her constituency. There are over 2,000 people working at the plant in South Derbyshire and involved in the supply chains, and 80% of the cars manufactured are exported to Europe. Exports are up, by the way, which I will get on to. Toyota continues to innovate and it is at the forefront of producing hybrid cars. It has been cutting emissions for over a decade and takes net zero seriously, having energy from solar panels all around the plant. The point she would want to make is, “Get out of the Westminster bubble, visit South Derbyshire, see what is happening at Toyota”—and at many other firms, as I will go on to say—“and you will see the work is going well.” Our job is to protect, promote and praise, not to talk the sector down.

Photo of Sarah Owen Sarah Owen Shadow Minister (Levelling Up, Housing, Communities and Local Government)

It is all very well and good talking about optimism, but does the Minister accept the reality facing the automotive industry in the UK today, and the stark warnings given by Stellantis about future job losses if the Government do not sort out the rules of origin problems?

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

I want to state for the record—and for the hon. Lady, who was obviously sitting there while I was speaking—that that was not optimism. Those were the facts and figures promoted not by Government, but by industry representatives. I had a meeting with Stellantis recently. We know that a number of challenges are reflected globally, not just in the UK, such as being able to recruit into the sector. The hon. Member for Stalybridge and Hyde missed another opportunity to talk about the fantastic jobs that are available. Of course, on rules of origin, that is an issue not just in the UK; it is an issue for lots of other countries that want to export and import, too.

Photo of Mark Tami Mark Tami Opposition Pairing Whip (Commons)

The Minister talked about the importance of the Toyota factory. In my constituency, I have the engine plant, which produces quality hybrid engines. Why are this Government opposed to hybrid engines?

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

This Government have a strong mandate to reach net zero and the consultation has just taken place on said mandate. The right hon. Member will know that I have been spending a lot time with the automotive sector, including taking delegations to meet the Minister of State, Department for Transport, my right hon. Friend Jesse Norman, who will be overseeing that. My job—I also chair the Automotive Council—is to champion business, and on occasion to try to remove all the barriers it needs removed for it to manufacture more and export more. I know that the Transport Minister will be speaking more about that later.

I will get on to all points the hon. Member for Stalybridge and Hyde raised, but he mentioned growing up in Sunderland. Just for the record—I can see there is a Birmingham MP here, Mr Mahmood—I grew up in Birmingham very close to a car plant that employs many members of my family, including my brother Nasim, so this sector is very close to my heart. I have been told not to make any football jokes about Birmingham and Sunderland at this point; I will leave that for the final speech.

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

Is it on a football point, because I will not be able to handle that? If it is not on a football point, I will take the intervention.

Photo of Matt Western Matt Western Shadow Minister (Education)

This point is not about football; it is about the debate. To pick up on the Minister’s analysis, she is correct on the statistics she gave about the UK market. She will know that we started from a pretty poor base post the pandemic and that our production was particularly hit, but other countries recovered better. It is an international market that is fighting for investment—I am sure she will accept that—and that is why it is of concern.

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

It is an international market that is fighting for supply chains. The SMMT was clear that, when manufacturing production was low, that was down to access to products and critical minerals, which I will come on to. As well as taking care of the industry, I am responsible for critical minerals and for supply chains. We are working with the industry, which I met just this morning, to put together a supply chain import strategy, which will be out in the autumn. We need to get a number of things right to make it even easier for the sector to do even better than it already is, but it is in a really good place and I will go on to mention some of the facts and stories about that.

The sector is indeed a jewel in the crown of our economy. It is vital, because of where it is based across the country, to supporting the levelling-up agenda, net zero and advancing global Britain. Our automotive industry employs 166,000 people, adds over £70 billion to the UK economy and is our second largest exporter of goods. The UK is proud to be home to major global manufacturers such as JLR, Nissan, Stellantis, Toyota, BMW and Ford. But that is not the whole of the UK’s automotive eco-system: we have a lot more to be proud of, from our luxury and performance sector, including Rolls-Royce, Bentley, Aston Martin, McLaren and Lotus, to heavy goods vehicles and buses, such as Leyland Trucks, Wrightbus, Alexander Dennis and Switch, as well as the future of mobility, encompassing connected and autonomous vehicles. Those manufacturers are supported by a diverse, resilient and growing UK supply chain that spans a wide range of components and includes companies such as Bosch, NSK, Meritor and Swindon Pressings. These are valued partnerships, and the sector knows that my Department for Business and Trade is the Government’s first port of call to help businesses grow and flourish, and to create jobs, apprenticeships and opportunities around the country.

Photo of Mike Amesbury Mike Amesbury Llafur, Weaver Vale

I thank the Minister for being generous with her time. All the manufacturers that she mentioned face a cliff edge in January 2024, with the 10% tariff. What are the Government going to do about it? It is desperate in terms of those jobs in our communities.

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

I assume that the hon. Member is referring to the rules of origin tariff. That is why we are working hard and negotiating with the EU, and working with our partner representative groups within the EU, so that they can be lobby as well. This is not just an issue in the UK. This is a European issue too, and we are making sure that those voices are heard loud and clear with our partners across Europe.

Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy)

I have a specific question for clarity: have the Government formally requested a reopening of the rules of origin for 2024?

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

The Government are working hard to share the challenges that will be faced by all manufacturers in Europe, not just the UK, when it comes to importing and exporting vehicles. This is not just a UK issue, and it is important that not just we but our counterparts in Europe make these arguments loud and clear to the EU. I recently met SMMT and asked that its sister bodies do the same where they reside in European countries, to ensure that those arguments are heard loud and clear.

As I said, there is huge diversity of companies within the supply chain and manufacturing of all automotive vehicles, and the UK has a full automotive eco-system across the UK. The sector is here because it recognises the UK’s unique strengths. Our engineers are world class—it is not for nothing that six out of a total of 10 Formula 1 teams are based in the UK. More broadly, the sector recognises that this Government have its back. We want to use innovation, skills and a competitive business environment to ensure that the UK automotive sector can thrive.

Photo of Luke Evans Luke Evans Ceidwadwyr, Bosworth

I am grateful to the Minister, because she alluded to the point that I was making about the automotive industry. We have talked a lot about manufacturing, but the UK is the world leader in things such as research and development, as well as in testing—autonomous testing, safety testing; we are literally the world leaders in this stuff. I mainly know that because a lot of it is based in my patch. Does the Minister agree?

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

I could not disagree with my hon. Friend, who is a champion for all things technology and transport, as well as for his constituency. The investment made in R&D has enabled large manufacturing firms to work closely with our academic institutions, and to de-risk some of the technologies that are now becoming mainstream, and we continue to support that area. That leads on to my next point about the Advanced Propulsion Centre and the automotive transformation fund, which are key in us trying to de-risk and adopt new technologies to drive the sector forward.

On the Automotive Council, the hon. Member for Stalybridge and Hyde said that he was engaging with the sector, but I am not quite sure where and when. A lot of the comments he made will not go down well with the sector because they were not very positive on all the work it has been doing. I engage directly with firms to see how hard they are committed to the sector, and what they expect from their politicians is support, not to be talked down.

I put on record my thanks to Graham Hoare, the current co-chair, Mike Hawes, Neville Jackson, Ian Constance, Markus Grüneisl, Paul Willcox, Murray Paul, Adrian Hallmark, Michael Leiters, Tim Slatter, Alan Johnson, Richard Kenworthy and many other indispensable members of the Automotive Council. I thank them for all the work they do, considering how challenging times have been not just for us but for our counterparts in Europe. I recently spoke at the Society of Motor Manufacturers and Trader’s parliamentary reception, and I welcome its “Manifesto 2030” with its five key priorities: green automotive transformation strategy, net zero mobility, green skills, made in Britain, and powering UK clean tech. There is a lot that we agree on, and I look forward to working with the sector to try to protect and strengthen the whole automotive industry. Car companies want to innovate, and we want to support them to do so. That is why the Government have an overarching goal of making the UK a global hub for innovation, as alluded to by the my hon. Friend the Member for Bosworth.

Photo of Greg Smith Greg Smith Ceidwadwyr, Buckingham

In embracing that innovation—this is further to my intervention on the shadow Minister—the UK is a leader in the development of the synthetic fuel sector. By that, I do not mean fuels made from feedstocks; I mean green hydrogen merged with atmospheric carbon capture, whereby what comes out of the tailpipe is the same volume of carbon that is then recaptured to make the next load of fuel. With whole system analysis, that will be shown to be net zero, but the zero tailpipe mandate gets in the way of that. Does the Minister agree that, to embrace this innovation properly and to give an eclectic future to the automotive sector, we need to embrace those innovators as well?

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

We do need to embrace those innovators. One of the reasons we have so much investment in the UK in innovation and the automotive sector is that we are often first out of the door in helping to de-risk and test that technology. The Minister of State, Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire, will touch on tailings, but just last week I was at the Lower Thames Crossing, which is putting out a pitch to ensure that all vehicles on the construction site have green hydrogen. The several thousand vehicle movements on and off the site carrying freight will also have green hydrogen. The site is a port, and given the level of construction that is taking place, it may be one of the largest construction sites to get to green hydrogen first. I am not sure, but I think it is pretty well on track to being a world leader in that.

The UK-wide innovation strategy sets out our long-term plan for delivering innovation-led growth. Our primary objective is to boost private sector investment across the whole UK, creating the right conditions for all businesses to innovate, giving them confidence to do so and ensuring that we are leading the future by creating it.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Cabinet Office), Shadow Minister (Culture, Media and Sport)

Will the Minister come on to the point that I raised with my hon. Friend Jonathan Reynolds about the roll-out of charging points? That is an important point. People are making decisions about electric vehicles, and we want them to make the right decisions. There is an absolute dearth of charging points in my constituency and many parts of Greater Manchester, and Westminster has installed more public electric charging points than the whole north of England. The Government are asleep at the wheel. When will they wake up and do something about that?

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

We are topping and tailing this debate with a Transport Minister and I know he is keen to touch on charging points, but the public charging network is growing quickly, and public charging devices have more than tripled in four years, from 10,300 devices in January 2019, to more than 43,000 in June 2023. The Government expect that around 300,000 charge points will be needed as a minimum by 2030. They are being rolled out at pace, but I do not doubt there will be constituency, case-by-case charge point concerns and the Minister will reflect on those.

One concern that the SMMT and all Members of Parliament who have manufacturing plants in their constituencies regularly raise with me is access to talent. Car companies need highly skilled individuals across the entirety of their business. One reason the UK is attractive is our world-leading universities, with four UK institutions in the global top 10, according to the QS world university rankings. But that is not all. We have supported the automotive sector through the apprenticeship levy, with £2.7 billion funding by the 2024-25 financial year. That will support apprenticeships in non-levy employers, often SMEs, where the Government will continue to pay 95% of apprentice training costs.

We recognise the importance of a level playing field. That is why, at the spring Budget, the Chancellor launched a new capital allowance offer. Businesses will now benefit from full expensing, which offers 100% first-year relief to companies on qualifying new main-rate plant and machinery investments from 1 April 2023 until 31 March 2026, the 50% first-year allowance for expenditure by companies on new special rate assets until 31 March 2026, and the annual investment allowance, which provides 100% first-year relief for plant and machinery investments up to £1 million.

Due to Putin’s invasion of Ukraine, energy costs have been an issue and a concern for the sector. That is why we have again intervened on behalf of the automotive sector, as well as many others, to ensure that the UK’s offer is competitive. It is why the Government have implemented a range of targeted measures to ensure that energy costs for high energy intensive industries, including battery manufacturing, are in line with other major economies around the world, levelling the playing field for British companies across Europe through the British industry supercharger scheme. In addition, to take just one example, the industrial energy transformation fund, now in its third phase, was designed to help businesses with high energy use to cut their energy bills and carbon emissions by investing in energy-efficient and low-carbon technologies. This Government announced £315 million of funding in the 2018 Budget available up to 2027.

The hon. Member for Stalybridge and Hyde talked about providing confidence and support for the sector, and I want to flesh out some of the announcements he was unable to bring himself to say at the Dispatch Box in case that was put into Hansard. Companies continue to show confidence in the UK, and we have announced major investments across the UK, including the £1 billion from Nissan and Envision to create an EV manufacturing hub in Sunderland. I was just on the phone to Envision this morning. It is an end-to-end supply chain. We have £100 million from Stellantis for its site in Ellesmere Port, and £380 million from Ford to make Halewood its first EV components site in Europe.

Jaguar Land Rover has also announced that it will be investing £15 billion over five years into its industrial footprint as part of its move towards electrification. That is great news for the west midlands, where JLR has three production sites, research and development facilities, and its headquarters. I am hugely confident that the UK will continue to attract investments large and small to enable the EV transition and deliver green jobs. Those are the stories we should be promoting at the Dispatch Box, not playing down.

The Government recognise the concerns of the sector, and we are dealing with serious global challenges, including rising costs because of Putin’s horrific war in Ukraine, supply chains disrupted by covid aftershocks and countries turning inward towards protectionism, by which, of course, I mean the Inflation Reduction Act. Acknowledging those issues, over the course of the summer I have been holding a series of business roundtables to understand exactly where the challenges in supply chains are most acute, and where the Government and businesses can work together more closely to ensure that the UK’s supply chains are resilient, now and in the future.

Those headwinds have been felt across the globe, and where the UK sector has been impacted, it has not been uniquely impacted. The entire automotive sector is midway through a once-in-a-lifetime shift away from the internal combustion engine towards zero-emission vehicles. That is good not just for our net zero ambitions; it also has the potential to provide wider economic and social benefits. Of course, our competitors know that too, and the race to secure zero-emission manufacturing capacity across the world is fierce. Some countries seem willing to spend eye-watering amounts. We will be offering targeted investment in the future of the auto manufacturing sector. That means focusing on exactly where we know we are ahead of the game internationally, offering targeted and measured support that reflects the size and scale of our outstanding automotive sector.

As I have said, we have more than a chequebook to attract companies to these shores; our highly productive and skilled workforce, focus on innovation and tech and the ease of doing business are key factors in a company’s decision to base itself in the UK. There is a backdrop of intensely challenging constraints on the sector globally, while the sector is undergoing a seismic technological transformation. It is clearly a difficult situation for manufacturers across the world, but there are positives to be considered, especially here in the UK. The SMMT reported that UK commercial vehicle production has just had its best May performance since 2008, growing by 36.9%—I thought the hon. Member for Stalybridge and Hyde might crack a smile for the sector—and year-to-date output is some 47.6% above the pre-pandemic levels of 2019. That is the message we want to send internationally. It clearly shows that the UK automotive sector is strong, dynamic and fundamentally capable. I want the UK to have a thriving automotive industry. As we take on these global challenges, we will take them on together with the sector.

Some mention was made of R&D support, and I will share all the work we have done. Our R&D and capital programmes delivered through the Advanced Propulsion Centre and the automotive transformation fund are positioning the UK as one of the best places in the world to design, develop and build zero-emission vehicles. They are working together to support the creation of an internationally competitive electric vehicle supply chain. In the coming months, after engagement with industry, the Government will build on those programmes to take decisive action and ensure future investment in the manufacture of zero-emission vehicles, as part of our commitment to building a cleaner, greener, more sustainable Britain fit for the world of the future, not the world of the past that the hon. Member for Stalybridge and Hyde is fixated on.

The automotive transformation fund supports the creation of an internationally competitive electric vehicle supply chain in the UK. It provides support to late-stage R&D and capital investments in strategically important technologies. That includes unlocking strategic investments in gigafactories, which I will come to, motors and drives, power electronics and fuel cell systems. Our automotive industry has a long and proud history. We are determined to build on our heritage as we invest in the technologies of the future, positioning the UK as one of the best locations in the world to manufacture electric vehicles.

I have spoken previously about the Advanced Propulsion Centre, because it does fantastic work in driving technology forward. It was founded in 2013 as a £1 billion joint venture between the automotive industry and the Government to help the industry meet the challenges of innovation and decarbonisation. It facilitates funding to UK-based research and development projects developing zero-emission technologies. The programme helps accelerate the development, commercialising and manufacture of advanced propulsion technologies in the UK. So far, it has supported 199 projects involving 450 partners. It is estimated to have supported more than 55,000 highly skilled jobs and is projected to save more than 350 million tonnes of CO2—the equivalent of removing the lifetime emissions of 14.1 million cars.

Those projects include the setting up of a joint venture between Unipart and Williams Advanced Engineering to manufacture batteries in Coventry, Danfoss setting up a centre of excellence for hydraulic R&D at its plant in Scotland, and Equipmake increasing the size of its manufacturing plant in Norfolk to meet demand for its electric drive unit. That shows how much work can be delivered and how many jobs created if we work with industry and help it de-risk in adopting new technologies.

I recently visited the Warwick Manufacturing Group, which the hon. Member for Stalybridge and Hyde alluded to. I am surprised he did not applaud the work further.

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

He could have gone further.

I saw at first hand the cutting-edge future mobility research being done in Coventry, the birthplace of British motor manufacturing. While in Coventry, I also had the opportunity to attend the Advanced Propulsion Centre to discuss how we can build on the success of our existing R&D and capital investment programmes. During the visit I met year 6 pupils from Templars Primary School in Coventry who attended the Advanced Propulsion Centre’s STEM day. That is a prime example of outreach activity to inspire the next generation of automotive engineers.

We cannot talk about the automotive sector without thinking about the broader supply chain and one of my particular passions, critical minerals, which I am surprised the hon. Member for Stalybridge and Hyde did not spend more time discussing. He missed out the key point of what is needed to produce electric vehicles. We know that China dominates the EV market, partly due to its grip on the supply chain. It controls much of the mining of crucial raw materials, and 80% of battery making for EVs is controlled by Chinese firms. It is also the world’s top car exporter.

I am not sure whether the hon. Member has had time to read Ed Conway’s recent book, “Material World”, which makes some key points on lithium. We know that reserves of the metal are concentrated in a handful of nations. In his book, he said that lithium reserves are concentrated in “a handful of nations”, so that “while the rest of the world panics about China’s dominance of the battery supply chain, many in Beijing are simultaneously panicking about China’s reliance on the rest of the world’s raw materials.”

We know that an EV car battery contains 40 kg of lithium, 10 kg of cobalt, 10 kg of manganese and 40 kg of nickel, and that is before we consider the graphite that goes into the anode. Those materials have to come from somewhere, which is why we updated our critical minerals strategy in the “Critical Minerals Refresh”—[Interruption.] That was a positive noise from the hon. Member—to ensure we were supporting the sector through the whole supply chain. I encourage colleagues to read Ed Conway’s book. I am not on commission, by the way; it is just a good read.

The hon. Member for Stalybridge and Hyde talked about not having a strategy, but we are working with industry to make sure it can plan for the future. To do that, we had the “Critical Minerals Refresh”, which came from the integrated review. We are making sure that we are focused on batteries and the EV supply chain here in the UK. Recent good news that the hon. Member also forgot to mention is the joint venture between British Lithium and Imerys, announced on 29 June. That is a massive boost to the critical minerals supply chain in the UK.

By the end of the decade, the development of Cornwall as the UK’s leading lithium hub will supply enough lithium carbonate for 500,000 electric cars a year. To help secure the supply of critical minerals, the Government have not only refreshed our critical minerals strategy, but put in place a task and finish group to work with industry so that it can highlight its particular vulnerabilities and we can provide it with the confidence and resilience it needs in its supply chains.

Most recently, I visited Indonesia, where I met Indonesian Ministers to emphasise that the UK has a lot to offer on critical minerals, particularly in relation to private finance, environmental, social and governance capabilities, and mining services. I also visited key mine sites and met companies that are critical in the battery supply chain and in critical mineral production, including some innovative UK companies showcasing the best of British—I know that sentence would be hard for the hon. Member for Stalybridge and Hyde ever to put on the record.

This year, I have also visited South Africa, where I represented the UK at the Minerals Security Partnership ministerial meeting and confirmed the UK’s intention to host the next such meeting during London Metal Exchange Week in October. I also visited Canada, where I signed the UK-Canada critical minerals statement of intent and launched our critical minerals dialogue with Canada, forging a key partnership with one of the most important global players in the critical minerals ecosystem. The hon. Member will want to have a moment to reflect on and applaud our work internationally and domestically on critical minerals.

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

So many—too many to list right now.

We also need to look at battery recycling. We want to create a regulatory space that supports the appropriate treatment of EV batteries. The Department for Environment, Food and Rural Affairs is currently reviewing existing UK batteries legislation and working at pace to publish a consultation in the second half of 2023. We have also funded the Faraday battery challenge, which has enabled research into the safe and efficient segregation and repurposing of EV battery cell components. Altilium is exploring how to recover the critical metals from old EV batteries and process them effectively so that they can be reused in new batteries. Reblend aims to develop the core processes and capabilities for a UK-based automotive battery recycling industry that can recover cathode materials from production scrap and end-of-life automotive and consumer batteries for reuse in automotive batteries going forward. We are not only trying to get close to host countries and make sure that we are mining ethically, but seeing how we can ensure that we are recycling batteries.

The Minister of State at the Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire, will touch on a few issues about the zero-emission vehicle mandate, so I will quickly touch on rules of origin. To support the transition, we must not only champion innovation but address all barriers to trade with partners and markets all over the world. Our closest trading partner is of course the EU, with whom we share not only climate goals and a trajectory towards electrification, but deeply integrated supply chains. More than 50% of cars manufactured in the UK and exported are destined for EU consumers. For those reasons, I am working closely with the industry to address its concerns about planned changes to the rules of origin for electric vehicles in the trade and co-operation agreement between the UK and EU.

Since signing the deal, unforeseen and shared supply chain shocks have hit the auto industry hard. That has driven up the cost of raw materials and battery components, making it harder to meet the changing rules. That risks industry on both sides facing tariffs on electric vehicles at a crucial time in the transition to electrification. I am determined to seek a solution to this shared problem and will work with the EU to fix it for 2024. The Prime Minister has raised the issue directly with European Commission President Ursula von der Leyen, and I and other Ministers are engaging with our EU counterparts. We will continue to work closely with industry to address any and all blockers to the electric transition so that our great UK auto industry continues to benefit from access to global markets and UK consumers have the best possible options as we make the switch to electric vehicles.

I wanted to touch on hydrogen, but I believe I am running out of time. I was also going to reflect on success in the aerospace sector, which is very much linked to the automotive sector, but I will not because I can see that you would like me to conclude, Madam Deputy Speaker.

Photo of Eleanor Laing Eleanor Laing Deputy Speaker and Chairman of Ways and Means, Chair, Standing Orders Committee (Commons), Chair, Standing Orders Committee (Commons), Chair, Parliamentary Works Estimates Commission, Chair, Parliamentary Works Estimates Commission

Order. For the sake of clarity, there is plenty of time for the debate and the hon. Lady can take as long as she wants. She has so far held the floor for 32 minutes. It is not for me to judge how long she ought to speak for; it is for her to judge the mood of the House.

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

Well, I think the mood of the House is to be more positive about the automotive sector. I could list even more stories, but I will conclude because I believe that Opposition Members would despair about all the positivity about the automotive sector that we could talk about and reflect on.

We are home to more than 25 manufacturers that build more than 70 different vehicles in the UK, all of which are supported by 2,500 component providers and some of the world’s most skilled engineers. It is incredibly important to reflect how difficult it has been for the automotive sector globally, but of course we have huge success stories here in the UK. In 2022 we exported vehicles to more than 130 different countries and built more than three quarters of a million cars, with the onwards trajectory rising year on year. This is a healthy sector going above and beyond not only to reskill and upskill, but to meet net zero targets.

The Government are supporting the UK automotive industry, and the sector is a stalwart example of innovation and dynamism to the rest of the world. It is a great sector to get into, whether someone joins it as an apprentice or even by taking on a regular job. Of course, there is more to do. There are more opportunities to secure as we transition to zero-emission vehicles and we realise the potential of connected and autonomous mobility. We have already achieved a great deal in partnership with this fantastic sector, but we are determined to do more. We work with the sector—we do not sit in Westminster coming up with plans that we then U-turn on—and that has given the sector the confidence it needs to continue to invest in the UK. The job of those representing the sector is to praise, promote and protect, not to talk the sector down.

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

Delivery is based on the investment I have reflected on throughout my speech. I look forward to hearing lots of sensible speeches throughout the debate.

Several hon. Members:


Photo of Richard Thomson Richard Thomson Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Trade), Shadow SNP Spokesperson (Business) 1:46, 12 Gorffennaf 2023

I had ample cause to reflect as I listened to the Minister’s speech, replete with positivity as it was, that there are probably not all that many electric vehicles on the market that could not have been charged up to about 80% in the time the Minister was on her feet. I wondered whether she was looking to give her name to a standard unit of measurement that we might adopt for such an infusion of charge into a vehicle.

The debate is of course about an industrial strategy, or the lack thereof. While I was preparing for the debate, I had the opportunity to stumble over a few of the various iterations of industrial strategy we have had under Conservative Governments past and present. We had one called “Industrial Strategy: building a Britain fit for the future” dating from 2017, which in most respects seemed to be a pretty conventional industrial strategy in what it set out to achieve and the sectors it sought to develop to do that. That was of course replaced by something called “Build Back Better” under the unlamented premiership of the former Member for Uxbridge and South Ruislip, which notably promised an “open and dynamic economy” and “World-class knowledge and research”, all the while the Government seemed determined to cut us off from our largest competitors and closest market. It promised

“A stable framework for growth and strong institutions” and boasted of “low, stable inflation”, which sounds somewhat risible after the experience of the past few months. It also promised levelling-up in terms of people and places, despite the fact that we have seen a significant lack of transparency in the allocations made through that funding stream. I suggest that those allocations will do nothing to recalibrate the grossly disproportionate imbalances of wealth and life opportunities across the nations and regions of these islands.

That takes us to the automotive industry. In many ways, it is something of a surprise that there still is one. Part of the deeply held mythology of the Conservatives in terms of the shape of the post-1979 UK is a tale they like to tell of industrial dysfunction and poor industrial relations. While that certainly took its toll on the automotive industry, I think it is the general lack of care that we have shown for manufacturing and the economic vandalism inflicted over that period as services were esteemed over manufacturing that makes the continued existence of our mass automotive sector in the UK a near miracle. That is not just as a result of the general lack of respect for manufacturing; there was also the general economic policy.

Since being elected to this place, I have always tried to talk more about the future of the North sea oil and gas fields than about their past mismanagement. Successive Governments, Conservative and Labour, were desperate to get the oil and gas pumping as quickly as they could, to reduce the crippling balance of payments deficit. The result was to push up the value of sterling beyond anything sustainable, which made manufacturing exports uncompetitive. Together with what we might call the policy of sado-monetarism that was imposed with high interest rates, manufacturing was driven down even further and unemployment was allowed to spiral later in the decade to above 3 million, leaving scars in the form of decades of lost opportunities and diminished life chances.

Although automotive production rallied later in the decade thanks to significant overseas investment, in recent years those concerns have re-emerged. The Society of Motor Manufacturers and Traders has reported that manufacturing decreased every year from 2016 to 2022. I hear what the Minister says about the positive trend of the past four months, but there is a longer-term trend over the past six years that cannot simply be wished away because of the past few weeks. In that time, a number of UK-based manufacturers have announced UK plant closures or reductions in capacity.

Greening the automotive industry will be a key element in the green transition. Personal transportation will be here for good, so it is imperative that we seize fully the industrialising of our green opportunities. We have touched on the importance of gigafactories. Batteries are heavy things by their nature, because of the materials that go into their production. There are lots of regulations on their transport, particularly cross-border. They are hazardous to transport over long distances due to their flammability. That means that there will be a strong incentive to ensure that EV manufacturing is located relatively close to where batteries are manufactured—probably in the same country and region.

For all the promises of factories, Britishvolt and the potential of gigafactories here, the UK is at risk of falling even further behind Europe in battery manufacturing. Capacity in continental Europe is expected to reach nearly 450 GWh by 2030. That is simply dwarfing the scale of the ambition, never mind the scale of delivery, that we are likely to see over the next few years. If those batteries are made in Europe or Asia, there is a simple decision that vehicle manufacturers can take about where to build the electric vehicles of the future.

All that is compounded by rules of origin. The new post-Brexit rules that come into effect in January 2024 will place 10% tariffs on exports of electric cars between the UK and the EU, if at least 45% of their value does not originate in the UK or the EU. We have heard about Stellantis, the world’s fourth largest car manufacturer, which has warned that the commitment to make electric vehicles in the UK is in serious jeopardy unless the Government can negotiate a deal to maintain existing trade rules until at least 2027, to give them a chance to adapt.

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Transport)

I looked at Labour’s Opposition day motion; is my hon. Friend as surprised as me that it does not mention Brexit anywhere?

Photo of Richard Thomson Richard Thomson Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Trade), Shadow SNP Spokesperson (Business)

I was very surprised about that. It seems to be the elephant in the room, and of this discussion. If my hon. Friend is patient, I will come to that towards the end of my speech.

Not just Stellantis makes such warnings; they have been echoed by Jaguar Land Rover and Ford, which have said that if the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close. Mike Hawes, the chief executive of the SMMT, warned at a summit recently:

“We can’t afford to have a last minute, 31 December agreement, because business needs to plan its volumes.”

Andrew Graves, a car expert at the University of Bath has warned of dire consequences of the industry, noting:

“you will start to lose the whole of the UK industry, not just Vauxhall and a couple of other manufacturers…it really makes no industrial sense to locate in the United Kingdom.”

The UK Government’s lack of action to ensure that the UK has the capacity to build batteries necessary for EU production—coupled with Brexit, as my hon. Friend Gavin Newlands rightly raised—has made it virtually impossible for domestic UK production to help us meet our targets on CO2 emissions. As Mike Hawes said:

“We urgently need an industrial strategy that creates attractive investment conditions and positions the UK as one of the best places in the world for advanced automotive manufacturing.”

That must be a priority for the UK Government, but I do not see any indication beyond warm words that it is. To quote someone else who might know what they are talking about, Andy Palmer, former chief operating officer at Nissan and chairman of battery start-ups InoBat and Ionetic, has warned that

“we are running out of time” to get battery manufacturing up and running in the UK, and that the failure to address the issues also caused by Brexit could lead to 800,000 jobs lost in the UK—basically those associated with the car industry.

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Transport)

On job losses, Madam Deputy Speaker you will remember as well as I do the impact of the closure of Linwood car plant on the town. Many would say that Linwood has still not fully recovered from that closure, when thousands of workers were put on the scrapheap. Is my hon. Friend worried about what will happen to places such as Sunderland and Ellesmere Port if the Government do not get a grip?

Photo of Richard Thomson Richard Thomson Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Trade), Shadow SNP Spokesperson (Business)

I share my hon. Friend’s concern. [Interruption.] There is some sedentary chuntering—if Dr Evans gives me a chance to respond to the intervention, I will gladly give way to him if he has a substantive point to make. We can still see the industrial scars of the devastation reaped by the sudden closure of the Linwood factory in 1981. What we do not see quite so readily but is still every bit as debilitating is the impact on families who lose opportunities to participate fully in the economy. There is a very high price associated with getting this wrong, which goes far beyond simply not seeing factories on greenfield sites.

The motion speaks about a lack of a meaningful UK industrial strategy, which is a fair accusation. It calls for the need to

“urgently resolve the rules of origin changes” that are looming in 2024. At this point, I am bound to observe that both Labour and the Conservatives make grandiloquent promises about how each would seek to harness the power of the British state to transform the economy and, with it, the lives and opportunities that follow. For the two years in every three over the last century that the Conservatives have had power, or the one year in every three that Labour has had power, neither has done that.

I mentioned the various iterations of Conservative industrial strategy; I have read Labour’s industrial strategy, which carries the signature and many photographs of Jonathan Reynolds. In many ways it is a very fine document, but when it comes to the impact of rules of origin, as with much else, a position promising to make Brexit work means absolutely nothing. I say this as gently as possible: Brexit can never be made to work, either in its current form or in any conceivable variant. As long as making Brexit work is part of the strategy, no matter which party it belongs to—Labour or the Conservatives—it will be left with a slow puncture.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I understand the strength of feeling on that point and how, when we have this conversation, many will revert to that Brexit argument. However, I ask the hon. Gentleman to recognise not the political case but the economic one: we have the lowest business investment in the G7 under this Conservative Government. We want to provide a stable platform for that investment to increase in gigafactories, R&D, hydrogen and all the things we want to see, but reopening that debate—and the independence debate—is not the stable way to realise those opportunities in future. If we spend all our time doing that, we will find that other countries get to a point that we will never be able to catch up with, because we did not focus on the real opportunities at hand.

Photo of Richard Thomson Richard Thomson Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Trade), Shadow SNP Spokesperson (Business)

I thank the hon. Gentleman for that intervention, but I could not disagree more. This is not a stable platform. The Conservatives are offering us the stability of decline, and it seems that Labour is embracing that for fear of frightening its former voters in the red wall. It seeks to get them back not with honesty, but by telling people what it thinks they want to hear. It should have the intellectual honesty to recognise that the real debilitating impact on securing future growth opportunities is not from the issue he mentions, but from the barriers that have been imposed. To hear that Labour intends to further padlock them in place will depress a great many people the length and breadth not just of Scotland but, looking at opinion polling, far beyond.

I regret to say that although the motion contains many fine words—it is certainly a fine document in many respects from Labour—while it remains saddled to the Brexit the Conservatives have given us, it will not do anything to tackle the fundamental problems it diagnoses.

Photo of Luke Evans Luke Evans Ceidwadwyr, Bosworth 2:00, 12 Gorffennaf 2023

I rise to speak in this debate because it is called “Supporting the Automotive Industry”. With the sense of humility that the Opposition asked for, I read the motion. It states:

“this House recognises that the automotive industry is the jewel in the crown of British manufacturing and believes it can have a bright future creating good jobs for people across the UK”.

Then it falls apart, because it states that it

“regrets that after 13 years of Conservative neglect the UK risks losing this world-class industry”.

I thought, gosh, as a matter of humility, have I missed something? What have the Opposition been talking about that I have so obviously missed? So I thought I would do a quick search on Hansard to see when the automotive industry has been talked about. The Leader of the Opposition, Keir Starmer, has mentioned it once since 2015, and that was when he was quoting my right hon. Friend Michael Gove confirming that the automotive sector was ready for Brexit. The shadow Secretary of State for Transport, Louise Haigh, has never uttered the words “automotive industry” in Hansard. To be fair, the shadow Secretary of State leading the debate, Jonathan Reynolds, has mentioned it six times, so once every two years, which is really useful to note.

Photo of Jonathan Reynolds Jonathan Reynolds Shadow Secretary of State for Business and Industrial Strategy

I am sorry, but that is not credible. Was the hon. Gentleman in the Chamber for the urgent question when Britishvolt, the flagship automotive battery policy, fell apart? Was he there when Stellantis gave evidence to the Select Committee or when we asked two urgent questions? On both occasions, the Government objected to us using Parliament to raise those important issues, so I am afraid I do not find his position credible.

Photo of Luke Evans Luke Evans Ceidwadwyr, Bosworth

That will lead me on to what I want to talk about, which is the positive side of this. Britishvolt wanted to have its headquarters in my constituency, and I met it to see what would happen. The Government protected £100 million of British taxpayers’ money. If that had gone to the wrong place, the shadow Secretary of State would have been at the Dispatch Box lambasting the Government for frittering away taxpayers’ money, so I will take no lectures on that point.

I am here to talk about the positive side of the automotive industry. In the east midlands, we are very proud of what we have to offer in the manufacturing industry. It has been through a tough time for the past 50 or 60 years, but we are making real progress. Only recently, Bosworth was noted as a net zero hotspot and described as

“connected areas with concentrated net zero activity, where businesses create jobs and add to the local hotspot’s economy”.

That means better paid jobs, better opportunities locally, better local businesses and, nationally, 840,000 jobs. Within that context, the average wage for someone in the industry is £42,600, compared with the national average of £33,000.

What does that look like in reality on the ground? That is what I want to spend a few minutes talking about. On Monday, I was at a place called Horiba MIRA. For those who do not know it, imagine the silicon valley of the automotive industry. Imagine the Google complex of anything to do with the car industry. From designing to manufacturing to testing, it all happens in this one space. It is unique in the world in what it can do. It was supported by Government from 2010 all the way through, with investment to grow as an enterprise zone, and was then allowed to flourish and attract international investment from the likes of REE, an Israeli company, bringing hundreds of millions of pounds in and bringing 300 jobs with it.

That is just a start in describing what is going in the automotive industry. I agree with those on both sides of the House who have said that this really is a revolutionary opportunity. Everyone in the world is trying to work out the best way to take it, and the best way is to support our research going on right here, including in happening in my constituency. MIRA Technology Park has over 600 high-value jobs, with specialisms in anything from autonomous car driving to battery technology, road safety and defence. Those technologies are all being tested right here in the UK. In November 2022, Horiba MIRA’s assured connected autonomous vehicle testing won the test facility of the year prize at the Vehicle Dynamics International awards, based on innovation in products, teams and technology. In June 2023, MIRA won an award from Jaguar Land Rover at its seventh annual global supplier excellence awards, demonstrating outstanding achievements in JLR’s global supply based on

“customer love unity, integrity, growth, impact.”

That all sounds very good, but when I ask my constituents whether they are aware of what is going on in our constituency, they do not really know what MIRA is. That is part of why I am so pleased to speak in this debate, because actually the UK is fantastically good in this space. It is not just about creating jobs—at MIRA, someone can go from being an apprentice all the way through to a PhD level qualification on cyber-security in cars. It is also innovating for the future to get to net zero and create energy security. It has been partnered by local enterprise partnerships, investment zones and the Midlands Engine to help drive investment, change policy and bring inward investment from the international community.

On Monday, I was very proud to welcome the president of Horiba, Mr Horiba. We saw two things: the research it is doing with Ceres on hydrogen battery technology to allow us to have battery technology in houses and vehicles; and driving simulators. If someone wants to break into the industry and is designing a car, they can now use a simulator to test how it will handle, what it will look like, and how it will feel in terms of comfort and safety. All that can be done simply in a computer-generated room, which takes out the need to make 50 to 100 prototypes and collapses it down to about one or two. But Horiba does not just have dark rooms with TV screens—there is an entire race track to test every single condition one can think of that a car might need to go through. That is right here in our country, leading the world on the international stage on how to bring in investment. I am really pleased that we can talk about that.

There is more in my constituency. We have Triumph Motorcycles. For those who do not know, Steve McQueen leapt away on a Triumph motorcycle. James Bond was seen going over the rooftops on a Triumph motorcycle. I am very proud to have Triumph Motorcycles’ headquarters in my patch, creating over 1,000 jobs. In the last three years, it has broken records for the number of bikes it has sold, which has gone up by 30% across the world. All across America and into Latin America, it is breaking into the industry and the market. That means high-end innovative jobs designed and manufactured right here in my constituency. This is the kind of thing that Members on both sides of the House are not good enough at talking up and talking about. That level of innovation and finishing makes a huge difference to my local community.

I want to mention two other businesses. Flying Spares, based in Market Bosworth, is a second-hand remodelling firm for cars such as Rolls-Royces. If someone need a part, it will ship it anywhere across the world. That is an innovative way of creating longevity and helping achieve net zero by recycling our high-end products. JJ Churchills is a fantastic advanced manufacturing aeronautical and defence agency, which employs 110 people, with high-end apprenticeships, in the middle of the countryside. This is happening right in my constituency—it is 85% rural, yet I have businesses like that.

The final jewel in the crown is Caterpillar, which last year made £59 billion worth of sales worldwide. The company, which has 1,000 people working in Desford in my constituency, is looking at making green hydrogen-fuelled electric tractors, forklift trucks, dumper trucks—you name it. I have had the pleasure of sitting there and driving Caterpillar vehicles in Arizona remotely. That is the sort of innovation that we can do. Caterpillar is sourcing its manufacturing right here in Desford, and has been for 70 years.

I mention all this to highlight some of what is going on in my small area of Leicestershire. People choose the UK because of the skillsets we have, the tech environment we create, the regulation we have in place and our stability in the global market. That is why they come here. Does that mean we should shut up shop, because we have done enough? No, of course not. It is important to make sure that there are signposts and avenues so that people know where to invest. When I speak to the likes of the Midlands Engine, which is looking for ways to drive investment in the 11 million people in its area, among the questions that come up are: where should businesses go, and how do they connect with Government?

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Transport)

The hon. Member is trying manfully to paint an extraordinarily positive picture of the industry, but does he not think that the rules of origin and Brexit will have a negative impact on the automotive sector? Yes or no?

Photo of Luke Evans Luke Evans Ceidwadwyr, Bosworth

If that was the case, Triumph would have struggled, but it has not.

A fundamental point has not been concentrated on enough. I am danger of straying into the territory of my Department, the Department for Energy Security and Net Zero, but Barbara Keeley, who is no longer in her place, raised the subject of infrastructure. It does not matter what we are discussing, be it wind, EVs, power generation or gigafactories; unless we sort the grid out there will be a fundamental difficulty. I believe that, broadly speaking, the UK is five years ahead in delivering on net zero. The problem is that so many companies are coming forward that they simply cannot be connected. I ask the Minister to speak to his colleagues in the Government to make sure that we deal with infrastructure. I know a report is coming out this month on the grid and how we can take it forward.

My final plea goes to Members in all parts of the House of Commons. Please come to my constituency of Bosworth and see just how marvellous our automotive industry is. From design to manufacturing to testing at the highest world standards, we have it all right here in Bosworth. You are more than welcome to join me.

Photo of Khalid Mahmood Khalid Mahmood Llafur, Birmingham, Perry Barr 2:13, 12 Gorffennaf 2023

It is a privilege to speak in this debate as one of the very few fully apprenticed trained engineers in this House. Birmingham and the west midlands have been the beating heart of manufacturing for the whole country and we want that to continue.

Jaguar Land Rover is a huge company in a constituency neighbouring my own. In my constituency, I have Bracebridge Engineering Ltd, specialists in metal fabrication and sheet metal work; P&B Metal Components, which supplies the automotive and aerial industries; Coker Engineering, which offers CNC turning, milling and grinding and assembly; Dana UK Axles, supplier of car parts to JLR; and many other manufacturers. I am particularly proud to have IMI Truflo Marine, the most revered experts and the best manufacturer of valves for submarines—the only one in the world—doing fantastic work in my constituency. We also have Fracino, whose coffee machines are better than most Italian-made ones and are supplied to most of the coffee houses in this country. The company was set up by an Italian family based in my constituency and does fantastic work.

The issue I really want to talk about today is training and apprenticeships, because I also have in my constituency the Engineering Employers’ Federation training school. I opened the centre 10 years ago, since when it has grown fourfold. The Leader of the Opposition, my right hon. and learned Friend Keir Starmer, has visited twice to see the great work being done there. His predecessor, Jeremy Corbyn, also visited. If the Minister wishes to come, I will be happy to guide her around.

The EEF training centre is a serious organisation that works very hard to produce apprenticeships. EEF members in Birmingham pay for their apprentices to go there, where they are taught to level 3 and to graduate level, too. I ask the Government to look at how to provide capital support to the EEF training school and colleges across Birmingham and the west midlands, and across the country, so that they can buy the sort of equipment they need—CNC machines, sheet metal equipment and so on—to train people properly. I have too many colleges unable to provide such training because they do not have the capital they need for equipment. To support the industry we have and to get the industry we want, we need to support apprenticeships, whether people train at EEF or other colleges in my constituency and elsewhere.

My hon. Friend Jonathan Reynolds and others have rightly raised the issue of charging points, as well as our lack of battery manufacturing capacity. I think we should also be looking at our capacity to enable connection to the grid. At the moment, those who want to supply energy—solar, wind or any other sort—to the grid face a 10-year waiting list. I know that you are shocked to hear that, Madam Deputy Speaker, and I am sure that others are too. To reach the levels of charging points and battery manufacture the UK needs to support a huge increase in EV manufacturing, we have to resolve that. All of us want better-engineered vehicles to save future generations from poisonous gas emissions. To do that, people need to be able to connect to the grid to power those charging points, but they cannot do so now and will not be able to in the foreseeable future, not for 10 years. I ask the Minister to speak to whoever is in charge of that, to make the case, because this is a huge need for the whole industry.

Photo of Luke Evans Luke Evans Ceidwadwyr, Bosworth

The hon. Member is absolutely right. As a Parliamentary Private Secretary at the Department for Energy Security and Net Zero, I am acutely aware of those issues. I know that the Government put in place a Minister for the grid to look at that side of things. I believe that very soon a report will come out, which I am hopeful will answer the UK’s questions about connecting to the grid.

Photo of Khalid Mahmood Khalid Mahmood Llafur, Birmingham, Perry Barr

I thank the hon. Member for making that point. I would like to discuss with him the new industries that want to come in and do that, but rather than a report, I want to see some action and delivery. The country cannot wait another 10 years.

Triumph used to manufacture at a factory in Small Heath in Birmingham, where my father used to work. He was a setter-operator on a lathe that produced Triumphs in my constituency. The British industry was then taken over by lots of imports from Japan—we were not able to compete—but I am glad that British industry is now able to compete. That is what I want for the future of the British engineering and manufacturing industry: for us to be able to compete in those areas so that we can show the world that we are the world leaders.

Dana in my constituency is very competitive in the motor vehicle industry. It supplies axles and other engineering components to the car industry. I want continued support for Dana and for it to have more apprentices and to be able to move forward. The key issue is skills, skills and more skills. Unless we get those skills, we will not be able to do what we want.

About six or seven years ago, Truflo did not have the capacity. It kept on members of staff until they were 70, rather than them retiring. Truflo then worked with the University of Birmingham to get apprentices on board to close the gap and get engineers to work for the company. It is the only valve company that works to the quality required to work in submarines—once a submarine is underwater, if it does not have the best equipment, it becomes very serious.

We have a great industry in the west midlands and we have great people doing great work. All I want is to ensure that in this debate we discuss the issue of engineering and manufacturing, so that we can move forward and see how we can deliver. I would like the Minister to follow through on that, and perhaps we can discuss some of the issues afterwards.

The real issue is, as my hon. Friend the Member for Stalybridge and Hyde said, that we need to get British industry working, and we need to work together to move forward. That can be done by the engineering and manufacturing sector. Green energy relies on the engineering and manufacturing sector. We do not want to have to import wind turbines; we can make them in the UK. We can make solar energy and hydrogen energy in the UK, and so we should. Let us enable the people in our industry to move forward on these issues. Let us support our industry and move forward.

Thank you for allowing me to speak, Madam Deputy Speaker. You know that I have another appointment very soon, so I will terminate my speech at this point. My hon. Friend the Member for Stalybridge and Hyde has introduced a fantastic and much-needed debate so that we can discuss this important issue.

Photo of Nia Griffith Nia Griffith Shadow Minister (International Trade) 2:21, 12 Gorffennaf 2023

My constituency of Llanelli has made a huge contribution to the automotive industry over many years. Industry grew up there from the very early days of smelting iron ore with local coal, to smelting copper ore imported through the town’s docks, and on to the world-famous tinplate industry, which lives on in the Tata works, which are often referred to as steelworks but which are referred to locally as the tinplate works.

Given its metal tradition, it is no wonder that motor manufacturing and engineering flourished in Llanelli and have been and continue to be very important sources of employment. As well as the larger firms, such as Marelli and Gestamp, there are myriad smaller firms, such as Excel Precision Engineering. They all produce a range of components that are part of the immensely complex supply chain that supplies the many iconic names in the UK motor industry. So many jobs in Llanelli depend on motor manufacturing and, indeed, across Wales there are some 9,000 jobs in the industry.

The complex supply chain makes it vital that the Government have a clear industrial strategy and trade policy, to give the industry the long-term certainty that it needs to invest. We are already seeing the effects of the Government’s dilly-dallying, with production down nearly 10% in 2022 and exports down 14%, which equates to a significant amount when eight out of 10 vehicles are exported. This means empty order books in the supply chain, which is very worrying for workers.

This is about not just the need to produce huge volumes of car batteries but adapting the design of many of the component parts of vehicles, with investment to gear up production lines to produce them. Furthermore, as petrol and diesel cars are phased out, some components will no longer be needed. To survive, the factories that make them will need to transition to manufacturing relevant components for the future, which is a future of electric vehicles.

Just in case the Government still have not heard the message coming loud and clear from the industry for months and months, the challenges are: high energy prices; rules of origin; the need for a long-term industrial strategy and certainty about the future; support for research and development; and the enormous challenge posed by the way other countries incentivise the industry to site new factories and new production lines in their countries.

Let us look at some of the asks. First, I implore the Government, instead of pressing ahead with the imposition of 10% tariffs from January 2024, to work together with the EU to postpone the escalation of the rules of origin requirements until 2027. We also need the Government to support research and development and the bringing of innovation to the market. For example, my constituents have a company that has developed the means to make an EV car battery 15% more efficient. That could make a huge improvement by getting more miles out of a vehicle per charge or facilitating less weighty batteries. That is the sort of enterprise that we need to support.

India is an associate member of the Horizon programme, yet staff in our universities still do not know whether their projects will be able to go ahead. They do not know whether we will continue to be part of the Horizon programme. The Government need to clarify that as soon as possible, so that we do not lose excellent researchers who will go elsewhere if they cannot further their research here in the UK.

Manufacturers have pointed out time and again that the UK has much higher energy prices than our competitor countries. This affects not only energy-intensive industry but all manufacturing. The solution is clear, and Labour has plans to implement it. We on the Labour Benches recognise the real urgency of the need to invest significantly in renewable energy. That is precisely what we would prioritise so that we could slash bills for industry and households while creating jobs—as well as, of course, tackling climate change and ensuring our energy security so that we are never again held to ransom by a foreign despot increasing gas prices. Instead, we have seen the Conservative Government ban the expansion of wind energy in England and take a half-hearted approach to lifting the ban, stalling on solar and, quite frankly, desperately underperforming on the roll-out of renewable energy over the past few years.

We then come to the huge amount of investment that is needed now to transform production from petrol and diesel vehicles to electric vehicles. The US Inflation Reduction Act is a massive game changer. The EU has responded by developing its own incentives, but we have still not had a coherent response from this Government. Time is running out, because companies are making decisions now, and once they ramp up the production of electric vehicles elsewhere, we will see workers in factories here left with nothing but finishing off the remaining orders on existing lines, with no future. If, once those decisions are made, companies do invest elsewhere, there will be no bringing them back: once they have gone, they have gone, adding to the loss of 37% of UK motor manufacturing jobs that this Conservative Government have presided over. That is a full third of the industry lost since 2010. Although I welcome any new investment, it really does need to be put into the context of what this Government have allowed us to lose.

We are all aware of the urgent need to establish battery factories here in the UK. Germany has clocked up 10 factories, while we are struggling on one. What are the Government going to do to ensure that we get the battery factories we need, and in a timely fashion? It is no good being too late when all the industry has gone elsewhere.

In addition, we need adaptation and transformation right across the industry. That is why we in the Labour party have set out our plan to implement a proper industrial strategy and establish an industrial council to provide long-term stability of policy. We have also set out our UK version of the US Inflation Reduction Act: our green prosperity plan. Our national wealth fund will, when needed, provide the finance to invest in the transformation of our automotive industry to produce EVs, which are an important part of our plans to get to net zero. We will boost UK battery capacity with the part-financing of eight additional gigafactories and accelerate the roll-out of charging points to give providers confidence to charge their EVs.

To reiterate, it is not simply the Labour party but the whole industry that is very concerned that we are not seeing a clear industrial strategy or the necessary moves to build battery factories by incentivising firms to continue putting their production here, by bringing down energy prices and by ensuring that we have a thriving motor manufacturing industry for the future.

Photo of Sarah Owen Sarah Owen Shadow Minister (Levelling Up, Housing, Communities and Local Government) 2:30, 12 Gorffennaf 2023

It is a privilege to follow my hon. Friend Dame Nia Griffith, who is right to talk about the importance of innovation and enterprise in this sector.

This is an important debate, which is why it is disappointing that there are now more Government Parliamentary Private Secretaries in the Chamber than there have been Conservative speakers in this debate. The public and workers will question why the Tories think so little of the automotive sector and will draw their own conclusions.

I am pleased that parliamentary time has been given today to focus on the automotive industry, which has a long and proud history in the UK. As we have already heard, from Sunderland to Coventry, Ellesmere Port and Luton, industrial cities and towns across the country have been hallmarks of manufacturing and quality production in our automotive sector for decades.

My constituents in Luton North have a particular interest in this debate. In a moment I will address the recent events at the SKF plant at Sundon Park in my constituency, but first I would like to discuss another automotive crisis facing the Luton community. Luton’s Vauxhall plant is based in the constituency of my hon. Friend Rachel Hopkins. She is a champion for the automotive sector, and I wish Dr Evans had looked up how many times she has mentioned the automotive sector and industry, as he would have reached double digits for sure.

Vauxhall has been a proud industrial landmark of our town since 1905. The plant played a major part in the war effort during the 1940s, producing the Churchill tank and becoming a centre for repairing battle-damaged tanks. Thousands of Bedford lorries were turned out at Kimpton Road, including the QL, which was the company’s first four-wheel drive vehicle and a key feature of our country’s military fleet.

If we fast forward to the present day, we see that the Luton Vauxhall plant employs around 1,500 people from across our town and has been essential to creating skilled, unionised local jobs, running apprenticeship schemes for young people and fostering local talent, including across supply chains and other local businesses. The plant now specialises in producing vans, around 70% of which are exported to mainland Europe. I am so pleased to have had the pleasure of visiting the plant with my hon. Friend the Member for Luton South to meet the workers, and we saw how proud they are of what they turn out. Long may it continue, in the face of the challenge from this Tory Government.

Businesses such as Vauxhall not only provide jobs to people in Luton North, they are also intrinsic to our identity as a town. Generations have worked there, known each other and grown together. Automation changed the face and size of Britain’s automotive sector but, as quickly as we saw it rise, we are now sadly seeing it decline.

Thirteen years of Tory chaos have turbo-charged the closure of factories and the destruction of workers’ livelihoods. The Conservatives’ disastrous handling of Brexit negotiations, the explosion of the economy by the previous Conservative Prime Minister and the long abandonment of any semblance of an industrial strategy are just a few of many contributing factors.

Locally, even in the face of the Government’s evolving mess, we have seen a committed, quality automotive sector and supply chain in Luton, but it is now hanging by a thread. The Minister talked about optimism, but this is the reality facing thousands of workers across the country. Other jobs linked to manufacturing, the automotive industry and the supply chain are similarly under threat.

SKF is a major employer in my constituency. SKF is a ball bearing manufacturing plant, formerly closely tied to Volvo. SKF, like Vauxhall, has been a proud feature of Luton for more than 100 years, and it is another prime example of how this Government are sitting on their hands while they oversee the slow, managed decline of manufacturing in this country.

Last month, SKF announced its plan to close the Luton plant and move production to Poznan in Poland by the end of 2024. This is a devastating blow to our town and our local economy, and it could see the loss of up to 300 jobs. I went to meet workers and Unite union reps at SKF, and they are all deeply concerned about the sudden closure. They told me that, throughout covid, they were considered key workers. They operated and worked throughout, putting their safety behind production, for the good of the company and for the good of the economy.

Generations have worked at SKF in Sundon Park, and thousands have given their best working days to that business, only for SKF’s board members to turn their back on them and for this Government to turn their back on manufacturing workers again. Seriously, what do the Government want? A land of Amazons? A blanket of windowless storage warehouses, where people compete and break themselves to meet unrealistic and ever-increasing pick rates? That is what they are turning our country into.

I am pleased the Minister was keen to take up invites to visit Members’ constituencies, so will she please commit to meeting me and workers at SKF who face losing their jobs to see how we can save SKF’s future in Luton?

Photo of Nusrat Ghani Nusrat Ghani Minister of State (Department for Business and Trade) (jointly with the Cabinet Office)

I recently had a meeting with Rachel Hopkins and Stellantis, and I am always open to meeting colleagues on both sides of the Chamber. Of course I will meet Sarah Owen, those employees and Unite the union.

Photo of Sarah Owen Sarah Owen Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I thank the Minister for giving that commitment. It will mean a lot to the workers of SKF and to the constituency and the wider economy.

Long-standing businesses with ties to our constituencies and our constituents are being forced to shut up shop and relocate elsewhere because the lack of Government support has left them with little choice. The lack of an industrial strategy has been a major factor in the lack of certainty over not just the last few years but, sadly, over the last 13 years.

There are positive examples of companies in the industry refusing to give up their UK-based factories and the workers who work in them. Next door to SKF in my constituency sits Comline, an auto parts business. When I visited Comline in Sundon Park, I was impressed by its innovation in dealing with the challenges thrown at it from all angles. It has a flourishing business that values its staff, and it has established strong trade links with offices abroad, which has perhaps guaranteed its continued success. Although I am glad that that has given the company security, it is deplorable that the Government have made international trade so complex that Comline has found it easier to trade with countries thousands of miles away than to trade with its offices in Northern Ireland.

Despite our proud history, I remain deeply concerned that our automotive industry has been consistently let down, with the industry’s concerns ignored by this Government. The Government have been warned by representative bodies and businesses for months, even years, of the cliff edge facing the UK automotive industry due to the combination of changes to the rules of origin and a lack of battery-making capacity in the UK.

The collapse of Britishvolt in January 2023, having planned to build a £3.8 billion gigafactory in Blyth, Northumberland, is a stark reminder of these failures and is undoubtedly a disaster for the UK car industry. Even more worrying is the wider picture. Even if Britishvolt were going ahead, we would be far short of where we need to be to continue making cars in this country. The Faraday Institution says we need 10 gigafactories by 2040 to sustain our automotive sector. Without domestic batteries, we will have no domestic automotive industry at all.

While this Government dither on their investment strategy, a Labour Government would commit to rapidly scaling up UK battery-making capacity by part-financing eight additional gigafactories to create 80,000 jobs and power 2 million electric vehicles. New gigafactories will also allow the UK’s automotive sector to source components locally and avoid tariffs from rules of origin agreements.

The Stellantis three—my hon. Friends the Members for Luton South and for Ellesmere Port and Neston (Justin Madders) and me—are sitting together, In May 2023, the car maker Stellantis, which owns Vauxhall, Peugeot, Citroën and Fiat, issued warnings that it may have to close UK factories if the Government do not renegotiate their Brexit deal. Under the current deal, UK car makers could face 10% tariffs on exports to the EU from next year due to rules of origin on where parts are sourced. Unfortunately, it is not us but business—companies such as Stellantis—that must be convinced that the Government will sort this out. Other car manufacturing giants and competitors, including Ford and Jaguar Land Rover, have joined Stellantis to warn that the transition to electric vehicles will be affected unless the UK and the EU delay the strict rules of origin that are due to start next year and could add tariffs on car exports.

This is not a new argument that I have had. Before entering this House in 2019, I was a trade union officer with GMB. I declare now that I am also a proud member of it, which will not surprise anybody. Alongside the late Jack Dromey, who was a champion for the automotive industry—I hope everybody from across the House could agree on that—we took workers from Toyota, AstraZeneca, the whisky-making industry in Scotland and the Stoke potteries to meet the then Cabinet Secretary, now the Secretary of State for Levelling Up, Housing and Communities. I can see you looking at me, Madam Deputy Speaker, so let me say that I have informed him that I was going to mention him in the Chamber. When we went to speak to him with this delegation of manufacturing workers, every single one of us questioned what was going to happen when the rules of origin changes kicked in. He shrugged his shoulders, arrogantly saying, “This is going to be worked out.” Yet here we are, in 2023, many years later, and all those industries and workers are still left without a proper answer.

While the EU is pumping billions into manufacturing as part of its green industrial revolution plan, and the US is investing with the Inflation Reduction Act, our automotive industry is still being left behind. The UK lags behind the rest of the world in terms of global automotive manufacturing relative to GDP, ranking sixth in Europe and 17th in the world last year. The Minister talks about optimism, which is of course welcome, but that is the reality facing workers and the sector. I ask the Government to get real on this, because blind optimism does not pay the bills. It does not create certainty for an industry and it certainly does not make car manufacturers such as Stellantis think that this Government are serious about the automotive sector.

That means my constituency is missing out on potential businesses starting and growing in Luton North, and local people who are keen to work in those industries are being failed. This Government are not only preventing new British jobs from materialising, but diminishing existing jobs before our eyes. As I said, we are facing a possible 270-plus job losses at the SKF factory. That is coming at the same time as there are threats to close ticket offices, including at Leagrave station. We cannot take more job losses in Luton North. My constituents are having the jobs they have done diligently for generations stripped from them, in the automotive sector, in rail and in all manner of business breakdowns.

It is clear that this Government’s sticking-plaster approach cannot continue. Labour has stated time and again that securing an agreement with the European Union to make Brexit work for the automotive industry is critical to ensuring its survival. The knock-on effects of the Government’s approach are being felt across the manufacturing industry more widely. Staggering energy costs, a lack of an industrial strategy and investment, and a more competitive European market mean that manufacturing across our country could soon cease to exist in its entirety. Clearly, our automotive industry needs a Government that will fight to support it to be competitive in the global market. Labour will deliver a modern industrial strategy to bring investment and jobs to industrial heartlands. That will create an employment revival where there has been years of Conservative depression, because on these Benches we are about creating strong jobs with a secure future, not stripping them away.

Under Labour leadership, battery-making capacity in the UK would boom. We would support the creation of eight new gigafactories, with this all laid out and costed in our green prosperity plan. The new factories would allow for our home-grown automotive businesses to source their auto parts within the UK. That would be huge for businesses such as Comline in Sundon Park. Crucially, with these new gigafactories, we would introduce about 80,000 new British jobs. I know how much that would mean to my constituents, from youngsters getting apprenticeships to older people knowing they do not need to worry about redundancy before retirement. With eight new gigafactories, we would also power 2 million electric vehicles, which is so crucial for working towards our commitment to net zero. All of that would bring in an additional £30 billion to our economy. It sounds like a good deal to me.

We are committed to building strong economic foundations that businesses need to succeed, including through reforms to the apprenticeship levy and business rates to give firms flexibility where they need it, and making the UK a clean energy superpower by 2030 with net zero carbon electricity, lowering electricity costs for the car industry. That is the leadership and the strategy that the automotive industry has been crying out for, and that is what a Labour Government would provide.

Photo of Rachel Hopkins Rachel Hopkins Shadow Minister (Defence) 2:45, 12 Gorffennaf 2023

It is an absolute pleasure to follow my hon. Friend Sarah Owen, a good friend who spoke so passionately about the length of time Luton has been associated with Vauxhall Motors—I appreciate the Minister nodding at that. As we have heard, the automotive industry is critical to the UK’s economy; it is a jewel in the crown of British manufacturing. I agree with the comments made by our Front Benchers about the importance of maintaining a good manufacturing sector in our country and the associated good, skilled jobs.

In Luton, we are proud of our automotive heritage. For once, let me carry on a football analogy by saying that we are also proud of our premier league football team. Generations of families have worked at the Vauxhall plant, making many well-known family cars and, more recently, medium-sized vans, based on the Vauxhall Vivaro. I have seen the heritage displayed in all sorts of ways. When I visited Someries Junior School recently, it had the full history of Vauxhall set out in a montage, where the cars had been drawn on and the history from 1905 was talked about. Similarly, when I have been out talking to the people of Mid Bedfordshire, I knocked on the door of someone who works at Vauxhall and is the daughter of one of the Unite representatives.

I was pleased to meet the Minister recently to talk about the importance of the automotive sector to Luton and the need for a long-term strategy to safeguard the industry and good jobs in our town. Having joined this place in 2019, I first raised the issue of the need for a strategy specifically to support the automotive industry some three years ago, in July 2020. The Minister has seen me raise many an automotive issue. If Dr Evans was here, I could assure him of how many times I have raised the issues of semiconductors, electric vehicle batteries, gigafactories, the supply chain, rules of origin and charging infrastructure. There is a genuine interest here about the importance of all of it to our economy.

Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

I am hesitant to interrupt, because I know of my hon. Friend’s expertise in this area. However, may I ask her: are the Government giving enough help for the future of our industry? Many believe that hydrogen power is coming fast, and that its impact might be similar to what the invention of the railways meant for the canals. Are the Government giving enough hope and resources to the industry to look forward to hydrogen power as well as battery power?

Photo of Rachel Hopkins Rachel Hopkins Shadow Minister (Defence)

I thank my hon. Friend for that intervention. Obviously, the Opposition are hosting this debate to get support for the automotive sector, and his question about whether the Government are giving sufficient support to hydrogen is perhaps one for them. I want to make sure that I have my points on the record about the future of electric vehicles at the Vauxhall plant.

Three years on, I am still calling for that long-term plan from the Government. Despite the Minister reciting many a meeting, visit and champion of X, Y and Z, where is the plan that we can all look up to and see how it is going to support our sector? We have seen this Conservative Government preside over a 37% fall in British motor manufacturing since they came into office in 2010. Indeed, eight out of 10 cars produced in the UK are exported, yet exports of cars manufactured in the UK fell by 14% in 2022. Government inaction, which we are debating today, threatens the future of the automotive industry and of Vauxhall in Luton, particularly the future of its electric vehicles.

The UK is heavily reliant on battery technology from Asia. While the UK currently falls under the threshold of rules of origin quotas, the ratcheting up from the beginning of next year poses a risk to the UK automotive industry. As we have heard, Stellantis, the owner of Vauxhall, told the Business and Trade Committee inquiry into the supply of batteries for EV manufacturing in the UK:

“There will not be sufficient battery production supplies in the UK or in Europe by 2025 and 2030” to meet the rules of origin requirements.

Rather than working with the EU to suspend a ratcheting up in rules of origin requirements until 2027, I am concerned that we will see too little, too late from the Government, and the Conservatives will oversee the imposition of 10% tariffs from 1 January next year. Just for nuance, those tariffs are 10% to 22% for electric vans, which particularly impacts the Vauxhall plant in Luton South.

Overall, these tariffs would hinder the UK’s struggling automotive sector, pass on yet more cost to British people, already struggling with a cost of living crisis made in Downing Street, and would make the green transition unnecessarily unaffordable for millions across the country.

Until we have sufficient domestic battery production, our industry will be at a major competitive disadvantage, in particular against Asian imports, specifically from South Korea, Japan and China. The reality is that if the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, the future of domestic operations will be at risk. Decisions will be made by producers to move production elsewhere, if there is no confidence in the UK Government’s desire to facilitate a sustainable automotive and electric vehicle market, a point well made by my hon. Friend Dame Nia Griffith, particularly as British businesses are also facing the highest energy costs in Europe.

It is also important that the Government recognise the innovation and technological advancements posed by the wider industry. Since joining the all-party motor group, I have learned a lot about how motorsport in the UK—the best in the world, with the greatest engineering and tech teams—influences the ordinary automotive sector. For many years, we have seen a cycle where cutting-edge motorsport develops innovative automotive solutions and efficiencies that the automotive sector later adopts for the wider market.

We have heard about steps being taken on sustainable fuels, but much more has been linked to the huge strides in technology relating to software. It is right to remember how the motorsport industry pivoted brilliantly during the pandemic to support the ventilator challenge. I raise this because if the Government sit back and allow the demise of our automotive industry, we will risk losing the world-class engineers, tech experts and motorsport companies, as they will look elsewhere for an environment that is more conducive to the sport. That would be detrimental, not only to the entertainment side of motorsport, but as a significant contributor to our economy and society.

As we have heard, Labour has an excellent plan to turbocharge electric vehicle manufacturing. In government, we will prioritise an agreement with the European Union to ensure that manufacturers have time to prepare to meet rules of origin requirements. We are committed to rapidly scaling up UK battery making capacity, by part-financing eight additional gigafactories, creating 80,000 jobs, powering 2 million electric vehicles and adding £30 billion to the UK economy.

Labour will accelerate the roll-out of charging points and give confidence to motorists to make the switch, with binding targets for electric vehicle chargers. Our plan includes measures to make the UK a clean energy superpower by 2030, with net zero carbon electricity, lowering electricity costs for the UK car industry. I look forward to supporting Labour’s business team to make this a reality, so that the young people in Luton South see a positive future ahead of them, with good, skilled jobs for the long term.

Photo of Ian Lavery Ian Lavery Llafur, Wansbeck 2:54, 12 Gorffennaf 2023

It should come as no surprise to anyone that since the Conservative Government took power in 2010, the country’s automotive industry has been failed by a lack of investment or any long-term strategy. Since 2010, as set out by other speakers in the debate, we have experienced a 37% decline in British motor manufacturing. That is not insignificant and it is set to continue.

I am lucky enough to be a member of the Business and Trade Committee. A couple of months ago, I asked experts, on a panel discussing the UK’s industrial strategy, how the UK is placed to take advantage of the electric car industry, and about the levels of investment on offer to support companies settling in the UK and creating jobs here, compared with those in the US and across Europe. Put simply, their response was startling but it was absolutely correct. The response from each industry expert was that right now there is no comparison between what is on offer with the Inflation Reduction Act in the US and what is on offer in Europe. That is unfortunate, but that is the reality of where we are at this moment in time.

Looking at the statistics regarding this extremely important debate, the Conservatives have presided over a 37% decline in British motor manufacturing since 2010. There are 780,000 people employed across the UK automotive sector, with 182,000 of those directly employed in manufacturing. Annual UK car production fell by 9.8% in 2022, from 859,000 units to 775,014 units. The UK lags behind the rest of the world in terms of global automotive manufacturing relative to GDP, ranking sixth in Europe and 17th in the world in 2022. Eight in every 10 cars produced in the UK are exported, yet exports of cars manufactured in the UK fell by 14% in 2022. The EU is by far the largest export market for UK-produced vehicles—57.6% of vehicles produced in the UK are exported to the EU.

It is now three years since a gigafactory in my constituency of Wansbeck was proposed, and we have been hoping for the development of Britishvolt at Cambois. In the run-up to Christmas, at a time when people are wondering if they are going to get additional socks, Old Spice, Blue Stratos or new boxer shorts, I got a great surprise, finally. In December 2020, I got a call from a businessman who informed me that he was to develop a big company called Britishvolt, only two miles from where I live. It was as if all my Christmases had come at once: 8,000 much-needed jobs in an area like Wansbeck and like south-east Northumberland, covering different skills. They were secure, unionised jobs that were set out in the telephone conversation I had in December 2020, just prior to Christmas. We were going to get a big gigafactory. It was heralded at the time by Ministers as a perfect example of levelling up. It was heralded by the then Prime Minister as a project that would boost the production of electric vehicles in the UK, while levelling up opportunity and bringing thousands of highly skilled jobs to communities in our industrial heartlands. However, Ministers were not so keen to be attached to it when Britishvolt went into liquidation after failing to get the funds that it needed to continue. That included the money that the disgraced former Prime Minister told me from that Dispatch Box was “in the post”. I asked him at PMQs when BritishVolt would be receiving the £100 million from the automotive transformation fund. He rose, clenching his fists anxiously, and said that the cheque was in the post. I support the CWU and I support the strikes at the Royal Mail, but I am afraid that that cheque never arrived. I do not blame the strikes for that, although others may wish to do so.

That money never ever arrived for Britishvolt. I listened to a Member earlier who said that, had that money been paid to a community such as mine, it would have been frittered away. Let me tell Members: people in my community deserve as much investment in jobs than anywhere else in this country—whether it be a constituency led by the Conservatives or by the Labour party. My constituency deserves to be cared for the same as anybody else. If £100 million is being invested in one constituency, it is seen as fantastic; it should not be seen as being frittered away in a constituency such as mine. It is an insult to everyone in the south-east of Northumberland, and obviously to my patch.

The current situation, as the Minister knows, is that the Britishvolt project was bought by an Australian company, Recharge Industries, and it has given us a glimmer of hope. I asked the Minister a few weeks ago in Question Time whether we could meet up to discuss what support the Government could give to Recharge Industries. She agreed to meet, but we have not yet had the opportunity to do so, so I gently nudge her and say that I would welcome that discussion, because we need that gigafactory. Every industry expert says that we have the best site in Europe for a gigafactory. The only way that it will happen is if we get the support that we need from the Government. So far, it does not look as if that will happen. As I have said before, it would create 8,000 jobs: 6,000 jobs in the supply chain and 2,000 at the factory.

Photo of Matt Western Matt Western Shadow Minister (Education)

I thank my hon. Friend for giving way and ask him to excuse me for having to leave the Chamber temporarily. The point he is making is important. I was in his area earlier this year and saw for myself the new National Grid facility. With its interconnectors and the 3% of UK electricity potential coming ashore from Norway, it is, I agree, the perfect site for a gigafactory—alongside Coventry, of course.

Photo of Ian Lavery Ian Lavery Llafur, Wansbeck

I will not get into the football analogies that have been drawn on today. I am pleased that my hon. Friend has visited my constituency and seen for himself the potential that Energy Central has in Northumberland. Whether it is the two interconnectors or the Catapult facility in Blyth for renewable energy, we have a lot going on in the Blyth estuary region and, of course, in Wansbeck.

We need to give people some hope. We need to give my constituents the same sort of hope that everybody else is getting. I have sat patiently listening to Members who have lots of jobs in their constituencies. They are very happy with those jobs and the fact that things could not be any brighter. Dr Evans said, “Come and have a look at Bosworth. It is fantastic.” I say to him, “Come and have a look at Wansbeck and see how that stands as compared with Bosworth.” I am delighted for the people of Bosworth, but he should be coming to my constituency to see the difference. It is just not fair.

Photo of Luke Evans Luke Evans Ceidwadwyr, Bosworth

When it comes to the automotive industry, we should be talking about the whole of the UK. The hon. Gentleman speaks passionately about the site of the gigafactory. I know it well, because Britishvolt spoke to me about the site and what it has to deliver. I am more than happy to support him and his constituents, because this is about what the UK can offer to the rest of the world. The automotive industry here is a leader in doing that, so I will champion that, because it happens to be in my constituency. I would love to see it thrive in the hon. Gentleman’s constituency, too, so that we have jobs and prosperity across the UK.

Photo of Ian Lavery Ian Lavery Llafur, Wansbeck

I thank the hon. Gentleman, but he should come and have a look. He can drive his electric vehicle up the road and call in to see the obvious difference between my constituency and his.

Photo of Sarah Owen Sarah Owen Shadow Minister (Levelling Up, Housing, Communities and Local Government)

This is indeed a UK-wide issue in that if one of us succeeds in the sector, then we all succeed. However, we are talking about not just the jobs of the future that need to be created and maintained, but, unfortunately, the jobs now that need to be saved. There are just not the equivalent jobs for people to go to. Is this not a serious problem for the sector? It is not just about future jobs, but about saving the jobs now.

Photo of Ian Lavery Ian Lavery Llafur, Wansbeck

That is an excellent point. The reality is that we have lost 37% of production in 13 years. If there is not a halt to that and if there is not the investment that is required to maintain and then increase employment, we will see a total loss of the automotive industry in this country. It is as simple as that. Members have mentioned the different new rules coming into place, the state of origin rules and issues such as that. It is getting more and more difficult to maintain and increase what we have, on top of a 37% decline. The reality is that we do not have anything in place to make that transformation from where we are now to where we need to be. We need to have, I think, nine new gigafactories. We have one. In fact, it is half a gigafactory. That is just not good enough. We keep being told by the Conservatives that they are on the case, that the development is coming, and that they will be developing it—whether it be in Coventry, in the midlands or wherever; hopefully, the next one will be in my constituency—but it is not right to continue saying that we are on track. We are not on track. There needs to be some investment. We need the readies. We will not get people rolling up to different areas saying that they will build a gigafactory unless they have support from the Government.

We should look at the support that other countries have given to their businesses in grants and loans: CATL in Germany received a loan of €750 million, 22.8% of the total build cost; Northvolt in Sweden got €505 million, 17.1% of the build cost; GM in North America got $2.5 billion; Stellantis $1 billion; Tesla $1.3 billion; and Ford $884 million. Britishvolt, which had so much promise, were promised £100 million, 2.3% of the build cost. That was heavily caveated to the point where the company never had a penny of Government support.

We should take a look at the stats. What Labour is suggesting would provide a fantastic opportunity. It needs to be grasped. Regions up and down the country will benefit greatly as a result of what has already been described as turbocharging electric vehicle manufacturing. There could be £30 billion-worth of investment in the regions. We cannot turn that down, but we have to get on with it, which is why I hope that once the election comes and we get elected as the next Government this can be introduced without delay. It will make a huge difference to areas such as the north-east, which will have 13,000 jobs in vehicle manufacturing. Its share of the £30 billion in economic benefits from the Labour plans will be £2.45 billion. Areas such as the west midlands will have 57,000 such jobs, and it will receive £10.76 billion in its share of the investment. The list goes on. The north-west will have 22,000 jobs in vehicle manufacturing and £4.13 billion-worth of investment.

That Labour party turbocharging of electric vehicles is so important and so exciting, but my constituency has been absolutely battered. It has been bruised by the deindustrialisation programme of past Conservative Governments. The lack of an industrial strategy from the Government is still holding my area back significantly. Levelling up means an active state willing actively to protect and invest in the interests of people in held-back areas such as my constituency of Wansbeck. The area where the site would have been developed lies in Cambois, a coastal area in the parish of East Bedlington. Bedlington and Wansbeck—not in Blyth. Britishvolt was never in Blyth. A number of people have mentioned that today, and I have already mentioned it to the Minister a few times. Britishvolt was not in Blyth; that is a Conservative seat next door. Britishvolt is in Wansbeck—my patch. I thought that I would make that point once again, because it appears that very few people listen to what has been said.

We have a proud history in the industrial revolution. It is a coal area. My patch was coal town. We were built on coal. We were part of the great industrial revolution, not only extracting the coal that powered it, but being the birthplace of wrought iron rails in the Bedlington Ironworks, which triggered the railway age. Why should that industrial heritage not be continued at the site of what could be the heart of the green industrial revolution—the transport industrial revolution—simply because once again the Government have failed to deliver for the people of Wansbeck and south-east Northumberland? We need to do a lot better for my constituents.

Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy) 3:12, 12 Gorffennaf 2023

I am grateful for the Speaker’s agreement, and that of the Whips, to my speaking in today’s debate.

If anybody does not know it yet, Ellesmere Port, which I am proud to represent, is synonymous with Vauxhall Motors. I know that my hon. Friends the Members for Luton North (Sarah Owen) and for Luton South (Rachel Hopkins) will say that Luton is equally synonymous. I put on the record my gratitude for their support, and that of their predecessors, when we faced similar battles to keep our plants open. We have heard already that we all have to succeed if the UK car industry is to succeed. I will show my solidarity with them to keep this important sector going. They will recognise the pride that we all have in being such a major part of the UK car sector.

Generations of my constituents, though not as many generations as those of my hon. Friends the Members for Luton North and for Luton South, have worked in the Vauxhall Motors plant since it first opened in around 1960. When I drive away from my house in my constituency in my Vauxhall Astra, I go past many houses that have Vauxhall workers in them, or Vauxhall pensioners, or people who have had family and friends who work at Vauxhall. That is just before I get to the end of my street. It is a long street, but I think that it is symbolic of the fact that every part and corner of my town has a link to the factory. Indeed, as the town grew the plant grew, from the 1960s onwards. Although it does not employ anything like the 12,000 people that it did at its height, it is still a substantial employer in the town. That of course does not take into account the many people employed in the supply chain and associated industries; neither does it account for the great potential that we have for greater numbers if the new van, which is coming soon, proves to be the success that we hope that it will be.

The parent company may now be called Stellantis, and my hon. Friends the Members for Luton North and for Luton South and I are now “the Stellantis three”, but Vauxhall Motors is the name that gives us pride in our community. It is something that we all recognise. The jobs that Vauxhall Motors, or Stellantis, provides are the sort that I want our future success to be built on: highly skilled, unionised, permanent jobs, manufacturing something that is a matter of national and local pride. When the shadow Secretary of State, my hon. Friend Jonathan Reynolds, spoke about his pride in the Nissan plant in Sunderland, those words really resonated with me. Those of us who have big local manufacturers take great pride in what they have done for our communities, and indeed the wider economy.

As you would expect, Madam Deputy Speaker, the plant has regular fights for survival, and I am proud that alongside many others I have played my part to ensure that it is still there, but it does not get any easier. Every five years or so, when the next model is discussed, plants across Europe are effectively pitted against each other to bid for the next job. The productivity of the local workforce and their co-operation with Unite the union, which for the record I am a proud member of, work extremely well. They show tremendous leadership to work with management. In the past, that has put us in the best possible position to secure future work. The partnership between the trade union and management is a real exemplar of how employee relations can be conducted for the benefit of everyone.

The local authority, and indeed central Government, have played their part too, both in recent years and in the previous decade, with initiatives such as the car scrappage scheme and the Automotive Council, which helps not just Vauxhall Motors but the entire sector more generally. Before the new van rolls off the production line for the first time, which I hope will be shortly, the challenge to secure the next model has already begun. That challenge has many similarities with the obstacles that the entire sector needs to overcome, as we have heard about.

I am confident that our workers and management locally will be able to show that they are competitive compared with other plants, but will that be enough if they face a 10% surcharge on their exported products, as it looks as if they may be facing from next year? I think that we all know that expecting any business to remain competitive if it has an additional 10% cost added to it is unrealistic. As my hon. Friend the Member for Luton South mentioned, for vans the tariff could go up to 22%. The clear warning signs are there that we need to do something dramatic to avoid that cliff edge.

There are six months to go before we get to that point, which shows that we are in the danger zone. As has been mentioned, the Government had years to address this issue. They either need to renegotiate the deal to get rid of the tariffs or get enough battery plants on the ground so that tariffs do not matter any more. Unfortunately, neither of those things has happened. When the EU is pumping billions into manufacturing as part of its green industrial plan, and the US is investing trillions as part of the Inflation Reduction Act, the inaction in the UK becomes negligence. If we want the UK to be a clean energy superpower by 2030, and to avoid falling off a cliff edge before then, we need a much more interventionist Government who will help the automotive sector to make this important transition. Gigafactories, charging infrastructure and reshoring the supply chain will not happen by magic, especially when the US and EU are actively pursuing that for their own industries.

Look at the evidence given to the Business and Trade Committee about the challenges that we face. These are some of the quotes given to the Committee on the matter recently:

“At the moment, the UK does not have a strategy. It does not have a runner in this race…Capital is far more incentivised to go to the US.”

Right now there is no comparison with what is on offer with the Inflation Reduction Act, and what is on offer in Europe. That is unfortunate, but it is the reality of where we are. The problem is that when other nations are putting in massive amounts, not putting in that level of cash makes us uncompetitive. It is difficult for shareholders to make a positive decision if we are not putting the same amounts on the table. That is what the industry has been very clearly telling us.

We know, as we have heard already, that we need at least eight or possibly nine gigafactories to make the UK car industry viable, but, as my hon. Friend Ian Lavery said, we may have half a gigafactory coming on stream, or maybe two at best, if we are lucky. He told us in some detail about the struggles to get that gigafactory up and running in his constituency, and that should tell us that this needs full attention. I know my hon. Friend Mick Whitley has been actively campaigning to get a gigafactory site in his constituency capable of serving not only Vauxhall Motors but probably also JLR and some other factories in the region.

I am pleased to say that our request to meet the Minister was granted, just before this debate in fact—what a great coincidence that was—because we think there needs to be recognition that there is a lot of chicken and egg in this situation. If we do not have the gigafactories, we will not have the car plants; if we do not have the car plants, we will not have the gigafactories. As my hon. Friend the Member for Luton North said, we all have to succeed in this. It cannot be just one or two plants. For the future to work in this sector, we all have to succeed.

Let us get more of these gigafactories up and running, with spades on the ground in the next 12 months, before we get the point where the sector decides that there just will not be the capacity to move forward with a viable UK car industry. As we know from many other industries, once it is gone, it is gone. As the Faraday Institution has said, we need a “timely and co-ordinated effort” to attract more gigafactories to the UK. We need to develop a resilient, sustainable and efficient supply chain and build up skills capabilities. That takes leadership, and it is about time we saw some from the Government.

We definitely need a strategy, and one that is interventionist in its outlook. When people decry the £28 billion a year that my party is committed to spending on greening the economy, I have to say to them, just look at what a fraction of that could do for the car industry. I believe it could be money well spent.

However, we can also do other things better. We need to make better use of the taxpayer pound that we already spend, and the most cursory look around the fleets in most other countries shows that we stand almost alone in failing to recognise the importance of social value as part of our procurement process. In France, the police drive Citroëns, Renaults and Peugeots produced in French factories. In Germany, they drive Mercedes, BMWs and Volkswagens. In Spain they drive Seat vehicles; in Sweden, it is Saabs and Volvos and in Italy they drive Alfa Romeos, Fiats and even sometimes Lamborghinis.

All those countries are governed by the same directive as we used to be, yet they all seem to be able to procure vehicles in the way that supports their own industry. We are no longer part of the EU, so we have no excuse now, and I ask myself what is stopping us being able to make use of public sector procurement powers to support our automotive sector. I ask myself why police officers in Cheshire are using vehicles made thousands of miles away when they could be in vehicles made just down the road at Vauxhall Motors. It does not have to be that way. The automotive sector has had more than its fair share of challenges due to Brexit, as we have heard, but let us use some of those so-called new-found freedoms to bring us some benefits as well.

A proper strategy on charging points is needed, but, just as with the overall industrial strategy, there is a mistaken belief that things should just be left to the market. In consumers’ minds there is now hesitancy about moving over to EVs and making a huge financial commitment at a time of cost of living crisis. The initial cost and inconvenience of running an electric vehicle is at the forefront of their considerations. Brand-new electric vehicles are far more expensive than second-hand traditional vehicles and, while electric vehicles are becoming a greater proportion of new sales, I am concerned that we will face a natural ceiling on them before too long.

As technologies progress and electric vehicles become more numerous on the roads, focus has turned to the availability and practicality of owning one. Concerns have arisen around access to and the cost of on-street charging. Given that around one third of UK homes do not have access to off-street parking, whether a driveway or a garage, we need a more effective way to public charging before we reach 2030. There is also a profound unfairness in the fact that those whose properties lack driveways pay four times as much in VAT as those who can use domestic supplies of electricity.

The Government’s commitment to building 300,000 new charging points is to be welcomed, but between 2017 and 2022 only 1,603 were installed, and almost 75% of those were located in the west midlands, the south-east and London. The north-west received only 0.7% of the total installed. London now possesses 100% of the charging points required by 2025, yet every other region in the country is lacking. According to analysis by Transport & Environment, most of the UK’s regions possess less than 50% of the estimated charging capacity required by 2025. In regions such as my own in the north-west, the north-east, the south-west and Northern Ireland, it is only around 30% of the capacity required. My local authority, Cheshire West and Chester, has only 28% of the chargers required by 2025—a stark comparison with wealthy London boroughs such as Westminster, which already has 358% of the chargers it needs.

That is not a good record for a Government who stood on a platform of levelling up the country—there appears to be no strategy to deal with those regional disparities. I am not sure that the Government even recognise that they exist. There is a huge opportunity for so-called “left behind” towns to receive some central investment for major charging points, so that those who cannot access private sources of electricity can come in to their town centre, charge their car and rejuvenate their town centre at the same time. There is a real opportunity there, but it will not happen by chance; it needs Government action.

When the Government’s report on charging infrastructure acknowledges that the process is arduous, we have to ask what they are going to do to change it. The report states:

“Installing and operating chargepoints requires several parties across the energy sector, local government and the transport sector to work together effectively.”

But where does the responsibility for that ultimately lie? That is the endgame for the whole automotive sector.

Someone has to step up to the plate and say, “Yes, this jewel in the crown of our manufacturing sector is going to be supported and supported properly, because we recognise that for our constituents, for our economy and for our environment, the car industry in the UK will only survive if there is the political will, backed up by a properly funded strategy, to make sure that it actually happens.” If the Conservative party will not do that, it should make way for one that will.

Photo of Matt Western Matt Western Shadow Minister (Education) 3:26, 12 Gorffennaf 2023

It is an honour to follow the excellent speech of my hon. Friend Justin Madders. As someone who is passionate about this industry, I would say that there is huge support for talking up the sector on the Opposition side of the Chamber, as we have heard in the contributions of colleagues over the last couple of hours.

When I think of the sector’s contribution to UK plc, I think about the alloy wheels being made in Fort William, the Ferodo brakes being made in Chapel-en-le-Frith and the panels being beaten out in various parts of the country. I think about the likes of the factory just around the corner from where I live that makes the gearbox for the Bugatti Veyron, no less. Up and down this country we have some of the finest companies and the finest engineers making products, contributing to the supply chain and to the original equipment manufacturers that produce vehicles of all sorts, from motorbikes to diggers.

I also pay tribute to a great old friend of mine who we all remember, Jack Dromey, who called this automotive industry the “jewel in the crown” of UK manufacturing. That is something I have always believed, and indeed I spent a great deal of my life working in it.

On the point about the few contributions made about the sector in this place, back in May 2018 I held a parliamentary debate on the subject, and I was disappointed by the number of contributions from certain quarters. Five years ago, I talked about the challenges that the industry faced, and the points I made then are hardly different from some of the points that the Society of Motor Manufacturers and Traders has highlighted in its five-point plan.

The real fear across the industry is that the Government are not acknowledging the importance of the sector, and certainly have not over recent years. Until a few years ago, Greg Clark had an industrial strategy, which was recognised by the industry, but that has, of course, fallen by the wayside. Indeed, I attended the SMMT international conference a year ago. A collection of industry heads from around the world, as well as UK bosses from right across the sector, were assembled for a full day’s conference. The keynote speech was given by the Prime Minister, who was then Chancellor. Sadly, it lasted a minute and 40 seconds.

I will not put words into the mouths of others, but the reality is that, that day, the industry felt utterly disrespected by this place. The Government are the Government, but the industry thought, “Well, what does Parliament really think about the contribution we are making to the UK economy?” Such a short keynote speech was felt, by Japanese or European colleagues who came over here to listen to the UK Chancellor, to devalue the industry’s work, as well as its investment. Unfortunately, those signals are very badly read in boardrooms across the world because, of course, the UK industry is made up of companies that are headquartered in Japan, Paris, Munich or wherever, and they listen carefully to the messages coming out of this place. That is important.

To give credit where it is due, Margaret Thatcher actually recognised the importance of the UK industry by bailing out British Leyland back in the day, which saved brands such as Jaguar Land Rover and Mini, as well by attracting inward investment from the likes of Honda, Toyota and Nissan. Sadly, we have lost investment from Honda, Ford and others in the past few years. That is why we are at a challenging point for the industry’s future.

We are blessed to have some great companies here, including Jaguar Land Rover, Stellantis, as we have heard, and BMW Mini. Then, of course, we have luxury and performance manufacturers such as Rolls-Royce, Bentley, McLaren, Aston Martin—just down the road from me—and all the other myriad specialist companies, including Lotus, Caterham, Morgan and so on. The sector is even wider if we include the likes of Norton, Triumph—about which we have heard—JCB and Caterpillar, as well the bus and coach manufacturers that have a presence here and in Northern Ireland, such as Wrightbus, which are doing some superb product development and addressing the need to get to net zero.

The sector is so valuable. It can contribute £67 billion in turnover and £14 billion in added value to the UK economy, and it typically invests £3 billion a year in research and development. However, the industry has been so reliant on fossil fuels that the transition to net zero is a critical point in its history. I will outline some of the issues, one of which is the political stability—or the lack of it—to revive and attract the business investment that we need. Of course, I welcome this morning’s announcement by Renault-Geely, but we are really behind the curve. I will also pick up on a few challenges such as the ZEV mandate and the new trading relationship with Europe, including, of course, the rules of origin issue, which is so critical. I will then touch on energy and the other import costs that are a real drag on investment in the UK, as well as the need for an EV and hydrogen infrastructure mandate if we are to get the sector going.

The transition needs a clear industrial strategy; it needs to become a political priority. Sadly, the words “industrial strategy” have not really been part of the Government’s vernacular over the past few years, as we have heard. Make UK said that, under this Government, we have had a decade of “flip-flopping” on industrial strategy. Do they back business or not? Boris Johnson clearly did not, going by his immortal words. Of course, we had the kamikaze Budget of last autumn. That is all damaging to the way in which the global industry perceives the UK. This is not talking down the UK; it is the reality of the messages coming out of this place. Businesses want security and stability before they invest for, say, 30 or 40 years. Think about the Toyota plant at Burnaston, which has just celebrated its 30th year—that is a fantastic achievement. Nissan, of course, is that bit older, but those are really prized assets that we have.

Turning to net zero and the Government’s ambitions with electric vehicles, we need to press on that issue and ramp up battery manufacture. As we have heard, we are way behind compared with other countries, but we also need to support wider adoption of vehicles. The plans we have—offering interest-free loans and potentially trialling a national scrappage scheme—are important. However, as I said, the charging point network for EV is way behind schedule. My hon. Friend Barbara Keeley made the point that more EV charging points are being installed in Westminster than in the north of the country. That is quite a sobering statistic, and where we do have those few chargers, they are all too often poorly maintained. There needs to be a mandate to ensure that that infrastructure is delivered, not just for EV but for hydrogen hubs. We have made something like a tenth of the investment in hydrogen hubs that Germany has, which of course will be aimed at future heavy goods vehicles and other mass transport systems. Until recently, we had 12 hubs; that number has now fallen to six, I think, so we are going backwards when it comes to hydrogen hubs.

We have talked about battery production, and heard the passionate speech from my hon. Friend Ian Lavery. As someone who went to his constituency 40 years ago, I know how important that gigafactory would be for his constituents, and I would love to see that happen. The technologies are moving on rapidly: we can look at the work being done by Warwick Manufacturing Group, which is leading the development of battery technology, or by UKBIC, which is the industrialisation centre just outside Coventry. The UK absolutely could be at the forefront of that work, but we need the investments to make it happen, and as demonstrated by Britishvolt, that has just not been happening. There are some questions about what is happening with Recharge Industries as well.

I touched on hydrogen; Members have also made points about sustainable fuels, and there is something to be said about what could be done in that sector. The motorsport industry is doing a huge amount of work exploring those technologies, and again, we are very much at the forefront of what can be done in that space—how existing internal combustion engines could be used with that kind of fuel to bring them close to net zero. That innovation is so important, whether it be through motorsport or our higher education institutions. We heard about HORIBA MIRA from Dr Evans and we have motorsport valley down the M40, but the Advanced Propulsion Centre at Warwick is also doing some fascinating work, supporting new companies with emerging technologies to make them commercially viable.

As the Government will know, there are some real concerns about the ZEV mandate, certainly about the tradeable element and what it will mean if manufacturers miss their targets, as well as what those targets will be after 2030. Then, of course, we have the rules of origin, which—as we have heard from colleagues, particularly “the Stellantis three”—are a real and critical hit to the sector. I am not sure whether I am a Stellantis fourth in disguise.

Photo of Matt Western Matt Western Shadow Minister (Education)

Maybe in spirit, yes—that is exactly what it is. Those tariffs will be real tariffs, going both ways, but they will particularly impact on battery electric vehicles. That is why Labour would prioritise an agreement with the EU, because we have to deliver a modern border and customs framework that will facilitate smooth and cost-effective trade.

I will make a couple of other points. We need the skills to make this all happen, both in the network of our dealers and in our factories and our manufacturing sector, but we also need clean energy. We have such a cost disadvantage in this country compared with France and a lot of Europe, but particularly when compared with Spain, where energy costs something like a tenth of what it does here. That is why Labour will launch an urgent mission for a fossil fuel-free electricity system by 2030, because we have to reduce the cost to businesses and to EV drivers as well. When we see the work that President Biden is doing through the IRA, we realise just how much can be done with a vision, and that is what I think is frustrating so many want-to-be investors in this country.

In closing, I come back to the speech of my hon. Friend Jonathan Reynolds, which I thought was a clinical dissection of the challenges facing the sector. This is a really important sector—from e-mobility to motorbikes and diggers—for the value it provides not just in the abstract to UK plc, but as I cited in my opening remarks, to communities and constituencies up and down the country. When I speak to businesses in the sector, which is virtually every week and certainly every fortnight, they impress upon me the desperate need for some clarity because they want to make long-term decisions. These are companies such as JLR, Stellantis, Toyota, Nissan, BMW, Mini and others, and decisions have been made by boards elsewhere around the world. That is why, with colleagues, I will always talk up this industry. It is an industry that I think is so important to our future, and an industry at the point of transition. However, we will be honest about the challenges. We must champion the prospects and what this country can provide to them, because we want the investment, and the industry wants us to provide regulatory, political and economic stability.

Photo of Louise Haigh Louise Haigh Shadow Secretary of State for Transport 3:41, 12 Gorffennaf 2023

This has been an excellent debate, informed by real experts from across the House who are clear champions of their constituencies and of the automotive industry. I think the House can agree, following today’s debate, that our automotive industry is truly the crown of British industry.

However, I would say very gently to the Minister that her speech really did sound out of touch with the reality that the industry and the workforce across our country are currently facing. We were treated to 35 minutes, but there was absolutely no plan, no explanation as to why we still do not have in place the strategy to ramp up our battery production, and no plan for how we are going to deal with the looming rules of origin deadline or the ZEV mandate.

As we have heard powerfully today, the industry is struggling under a Government who have no plan or strategy, and are constantly risking more jobs being shipped overseas. My hon. Friends the Members for Luton North (Sarah Owen), for Luton South (Rachel Hopkins), for Ellesmere Port and Neston (Justin Madders), for Llanelli (Dame Nia Griffith), for Wansbeck and for Warwick and Leamington (Matt Western) all spelled out clearly the impact of this on their communities. This debate has been enormously enhanced by their contributions, and they are huge champions of the automotive industry in this place.

In the face of the new geopolitical reality and the approach our global allies are taking, the Government’s current approach is little short of reckless. The Biden Administration are at the forefront of this new economic approach, taking an active role in rebuilding America’s manufacturing base through their groundbreaking Inflation Reduction Act and the CHIPS Act. The European Union, with its Net Zero Industry Act, aims for 40% of its green industry to be based at home, and the Powering Australia plan is set to create 600,000 jobs and spur 76 billion Australian dollars of investment. Yet here in the UK, this Government seem content to settle for less and are resigned to good jobs and green growth continuing to head overseas.

So much for levelling up: it is exactly the communities that have already suffered from deindustrialisation that will be hit all over again. We know the story, and we have heard it again today, of how good, high-skilled, well-paid jobs disappear and their alternatives are low-paid and insecure, and of how poverty rises, inequality increases and the social fabric of communities is permanently torn. We simply cannot allow it to happen again, because the warning signs are already flashing.

Just two weeks ago, the Business and Trade Secretary and I both spoke at the British car manufacturers conference. The industry was clear that it urgently needs a strategy—or anything—from this Government. Mike Hawes, who has been quoted many times today, warned:

“We just need a plan, and one more cunning than Baldrick’s. I don’t care whether it’s called industrial competitiveness, activism, or dare we say it, an industrial strategy. We just know we need it, and we need it urgently.”

What did the Secretary of State have to say in response? I quote directly:

“We will come out with plans soon, please stick with us”.

Is that really the best the Government can offer—begging industry to wait a little longer and to hold its nerve, as they admit that they have no plan after 13 years in government?

The reality is that we cannot afford to wait any longer. For decades, our car industry has been at the forefront of innovation and expertise. We have heard fantastic examples of that from my hon. Friends the Members for Warwick and Leamington, for Ellesmere Port and Neston, for Birmingham, Perry Barr (Mr Mahmood), for Llanelli, and for Luton North, as well as from my hon. Friend the Member for Luton South, who is a fantastic champion of motorsports. Under the Conservatives, however, we are losing the race for the jobs of the future. Car production has already slumped by one-third since 2010. By 2025, Germany will manufacture 10 times more batteries than we do, and the US 30 times.

We heard the whole sorry tale of the history of Britishvolt from my hon. Friend the Member for Wansbeck. He is right—it is an ideal site for a gigafactory, because it has the grid connections and supply chain in the north-east, but it has been failed, repeatedly, by this Government. Manufacturers are already leaving the UK or shutting up shop: Arrival has left Bicester for the US; Honda has closed its Swindon plant after 35 years of production; Ford has cut thousands of jobs at its Halewood plant; and manufacturers in the supply chain such as SKF in Luton are at risk of being offshored to Poland. Yet more problems are looming, self-inflicted by this reckless Government.

We have heard many times today of the impending cliff edge through the trade and co-operation agreement, with new rules of origin requirements that will apply huge tariffs to UK exports if we cannot produce enough batteries at home. The Government have had two and a half years since the agreement was signed, but they have failed to use that time to ramp up our battery capacity. That is coupled with their own looming ZEV mandate that industry has no detail about. Our industry will be slapped with tariffs, and demand will move to countries with the battery capacity such as China.

Communities such as Llanelli, Luton, Birmingham, Elsmere Port and Wansbeck will suffer, as will those such as Blyth, West Brom, South Derbyshire, Durham, and Crewe. That is why many constituents across the country will wonder why this debate has been so one-sided and from one side of the House, and why Labour will create the conditions for our car industry not just to survive, but to thrive. Our vision is one where good jobs in the industries of the future—jobs that people can be proud of and raise a family on—are brought back to our industrial heartlands. That is why, alongside my hon. Friend the Member for Stalybridge and Hyde, we have developed a plan to turbocharge electric vehicle manufacturing.

First, we will address the consequence of the Conservatives’ Brexit deal, acting to avoid the cliff edge in the TCA that will slap tariff on our electric vehicles. We will rapidly scale up our domestic battery industry by part-financing eight additional gigafactories through our green prosperity plan. We will accelerate the EV charge point roll-out by setting new, binding targets on Governments, and we will make the UK a clean energy superpower by 2030, lowering the sky-high electricity costs for UK industries and cutting £93 billion in energy bills for the British people, by investing in cleaner, cheaper, homegrown power for our country.

With Labour’s plan to turbocharge our EV transition the opportunities are clear for all to see, and we have heard them expressed loud and clear today: resilience to withstand geopolitical shocks; 80,000 good, green jobs right here, not in China; £30 billion of investment across the country, forging resilience at home while creating new partnerships abroad; an active state working in concert with innovative, world-leading manufacturers, pursuing a modern industrial strategy; and new life breathed into our hollowed out industrial base. Mr Deputy Speaker, Labour will not shy away from the challenges facing our car industry. We will back it every step of the way, and we have the plan to prove it. I urge colleagues to support our motion today.

Photo of Jesse Norman Jesse Norman Minister of State (Department for Transport) 3:49, 12 Gorffennaf 2023

It has been an interesting and absorbing debate, and I thank all those who have taken part in it. I must say that I take my hat off to Jonathan Reynolds. It is interesting to know that he grew up in Sunderland, and I notice his great affection for the Black Cats—an affection I greatly share—Niall Quinn and the glory days of Peter Reid. Who but the hon. Gentleman could better hark back to the 1990s, and how much does he do so in politics as he does in football? It is a little unnerving to see him newly hirsute—at least in terms of the past year or three. He is getting an unnervingly close resemblance to His late Majesty King George V, which creates a somewhat unnerving impression across the Dispatch Box when one is trying to respond to the important points he makes.

The hon. Gentleman came, as did Louise Haigh, with a clear agenda for this debate, which was to tell a desperate story of a struggling industry and a country labouring in its automotive manufacturing. Unfortunately, they have both had desperately bad luck in their choice of debate, because those gloomy speeches are made, and the desire for optimism is expressed, and then it turns out that Geely and Renault have today announced a pioneering new investment to become a global leader in new engine technologies. Not only that: it turns out that we just laid the new charge point regulations, which will make it easier than ever to own an EV. Those were widely welcomed, I might add, by Mike Hawes of the SMMT, who was richly quoted today by Opposition Members, and with reason. Fascinatingly, only today, Tesla has announced its intention to become an electricity supplier, which will itself become an enormously important part of that wider systems infrastructure that has been rightly mentioned. What a day to choose to be gloomy on. What a day of good news, and how much that reinforces the picture of an industry that is dealing brilliantly with the challenges and changes to its own circumstances.

Photo of Jesse Norman Jesse Norman Minister of State (Department for Transport)

I would give way, but I want to respond to the many other points from Members who actually made speeches.

Photo of Jesse Norman Jesse Norman Minister of State (Department for Transport)

I hope the hon. Lady will let me get to those points first. [Interruption.] We can go on, or Opposition Members can listen to what the Government are trying to say.

The hon. Member for Stalybridge and Hyde talked about low business investment, and he is absolutely right that one should not pick and choose statistics but try to give a full picture. I was, therefore, slightly surprised that he ignored the fact that business investment has grown steadily since 2010. The Institute for Government published a report that tracks the crashing of business investment in this country to the Labour Administration and dates its recovery from 2008 to 2010. That is the picture of business investment that the hon. Gentleman asks us to get to.

My hon. Friend Dr Evans rightly highlighted MIRA. What a great facility that is and what a great testing opportunity it will create for this country over the next few years. He is right to talk about grid connectivity and to mention Triumph Motorcycles, a business that I met only the other day, but he would have wanted to mention the strategic framework, which was announced last year, for electricity provision. If there is a report coming soon—he can speak from his knowledge of that in a Parliamentary Private Secretary context—I can only applaud that.

Barbara Keeley worried about the roll-out of charge points. I hope she will be reassured by the new regs on charge points, which we have only just laid and which were welcomed by the SMMT and many other players across that industry. I also hope she will be pleased that ChargeUK, representing the charge point operators, has announced that £6 billion will be invested in charge points across the country over the next few years. That is a direct result of the ZEV mandate, which ties the creation of charge point infrastructure to the support for EVs in the systemic way that parties across the House, including the Opposition, recognise. It is those two things that will grow together. It is the ability to aim against that target of specific EV numbers coming into and being sold in this country that creates the priming for private investment, and rightly so.

I was pleased to hear the contribution of Mr Mahmood, who was absolutely right to raise the topic of apprenticeships. As an apprentice in this House, I salute him; he echoed the “Education, education, education” policy of a former Member of this House with “Skills, skills, skills”, which I completely agree are very important. Let me remind him that in my constituency we are pioneering a specialist STEM technology university—the New Model Institute for Technology and Engineering—which is just the thing that can be used to build skills and to prime levelling up across the country.

What a wonderfully fresh and enthusiastic speech from Richard Thomson. I was excited to hear it, but tragically it turned out to be a tag-team “curse on both your houses” misery exercise, relitigating Brexit long after that horse has left the stable. That was rightly picked up by the hon. Member for Stalybridge and Hyde, who did not want to be drawn on Brexit. I understand why: the country took a decision and we are working with the consequences.

The hon. Member for Gordon said that the speech by my hon. Friend the Minister for Industry and Economic Security—a brilliant speech it was, too—was the length of time it would take to charge an EV. At 35 minutes, that is not quite true, but that is absolutely the ambition that we want to get to for all EV operators across the country. We want people to be able to charge very rapidly while they go and pick up a cup of coffee in the usual way.

I thank Dame Nia Griffith for her comment. She asked for a renewable energy focus and was right to do so. I hope that I can reassure her by reminding her that National Grid reported that in 2010 less than 20% of our energy was renewable, while in 2022—last year—more than 50% was renewable in five months of the year. That is tremendous progress. She may also be pleased to know that coal, which was used for 43% of electricity generation in 2012, is now at 1.5%. That is tremendous progress on both those fronts.

Photo of Sarah Owen Sarah Owen Shadow Minister (Levelling Up, Housing, Communities and Local Government)

On a point of order, Mr Deputy Speaker. Listening to the Minister’s response, I want to give him the opportunity to correct the record. Not only does he seem not to be living on the same planet as us, but he is clearly not in the same Chamber. He implied that I had not spoken in the debate, but I gave a lengthy speech on the issues we are facing in Luton right now. I invite him to correct the record at the Dispatch Box.

Photo of Jesse Norman Jesse Norman Minister of State (Department for Transport)

I would be happy to respond to the hon. Lady. That is not actually what I said. I said that I wanted to respond to the speeches and therefore I would not take interventions at that time. I will of course—[Interruption.] If she would prefer me to respond not to her speech but to an intervention, I will let her make an intervention.

Photo of Sarah Owen Sarah Owen Shadow Minister (Levelling Up, Housing, Communities and Local Government)

I thank the Minister for finally allowing an intervention. He talked about optimism. Does he feel optimistic that the manufacturing industry now faces a 10% tariff on passenger cars and a 22% tariff on vans? Does he believe that we should all be optimistic about that future, or does he believe the reality—that the manufacturing industry faces a cliff edge?

Photo of Jesse Norman Jesse Norman Minister of State (Department for Transport)

If that is the best the hon. Lady can do, she would have been better to wait for my response to her speech. No, the truth of the matter is that this country is engaged in discussions and negotiations with European partners about the circumstances—we export an enormous number of cars, which is an important fact from their point of view as it is from ours—and it would be futile to discuss those matters in public. We all know that none of these negotiations is ever done in public, and that includes commercial negotiations, which Labour appears to wish to be done in public as well.

Let me proceed a little more. The hon. Members for Luton South (Rachel Hopkins), for Wansbeck (Ian Lavery) and for Sheffield, Heeley (Louise Haigh) touched on new gigafactories. I invite Opposition Front- Bench Members to comment further if they wish, because this is a much-heralded part of the Labour strategy, and if the Labour party seeks to subsidise eight new gigafactories, perhaps they would like to put on record how much public money—taxpayer’s money—they propose to spend on that and how it would be funded. We very much look forward to seeing their plans. I will be interested to see whether they bear any resemblance to market conditions or show any signs of doing anything other than immiserating and impoverishing the British taxpayer.

Question put and agreed to.


That this House
recognises that the automotive industry is the jewel in the crown of British manufacturing and believes it can have a bright future creating good jobs for people across the UK;
regrets that after 13 years of Conservative neglect the UK risks losing this world-class industry, putting thousands of jobs under threat;
condemns the Government for its lack of an industrial strategy and the negative impact this has had on investment in the UK’s automotive sector;
calls on the Government to urgently resolve the rules of origin changes which are due to take effect in 2024, working with partners across Europe to negotiate a deal that works for manufacturers;
and further calls on the Government to adopt an active industrial strategy to build the battery factory capacity needed to secure the automotive sector for decades to come.

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means), Chair, Restoration and Renewal Programme Board Committee, Chair, Restoration and Renewal Programme Board Committee

I have now to announce the result of today’s deferred Division on the Adjournment, summer, conference and Christmas recess motion. The Ayes were 395 and the Noes were 5, so the Ayes have it.

[The Division list is published at the end of today’s debates.]