PARLIAMENTARY DEBATE
UK Car Industry - 17 May 2023 (Commons/Commons Chamber)
Debate Detail
The automotive industry has a long and proud history in the UK. We are determined to build on our heritage and secure international investment in the technologies of the future, to position the UK as one of the best locations in the world in which to manufacture electric vehicles. We are leveraging investment from industry by providing Government support for new plants and upgrades to ensure that the automotive industry thrives into the future. Companies continue to show confidence in the UK, announcing major investments across the country, including £1 billion from Nissan and Envision to create an electric vehicle manufacturing hub in Sunderland; £100 million from Stellantis for the site in Ellesmere Port; and £380 million from Ford to make Halewood its first EV components site in Europe.
We will continue to work through our automotive transformation fund to build a global, competitive EV supply chain in the UK, boosting home-grown EV battery production, levelling up and advancing towards a greener future.
The warnings from Stellantis overnight are deeply concerning, not just for my constituents who work at Vauxhall Motors in Ellesmere Port, but for the automotive sector more widely. She will know of the huge efforts put in over recent years to secure the future of the plant and to move to electric vehicle production; significant contributions have been made from the management, the workforce, the local authority and the Government themselves. So it is beyond frustrating that just a couple of years later we find ourselves once again in a position where there is a threat to my constituents’ livelihoods.
We know what needs to be done to secure jobs in Ellesmere Port and in the wider automotive sector, because the sector has been telling the Government, as have we, that there needs to be a proper industrial strategy. So where is that strategy? Indeed, where is the Secretary of State? The EU is pumping billions into manufacturing as part of its green industrial plan, the US is investing trillions with the Inflation Reduction Act and we are being left behind. Every day this Government sit on their hands, that mountain to climb gets a little higher.
So we need urgent action, but I am afraid that all I have heard this morning is complacency. We need those gigafactories with spades in the ground this year, because we know the timescales that the industry invests across are long and it needs to see progress now. So will the Minister tell us what steps the Government are actively taking to increase the proportion of vehicle parts manufactured in the UK? We need to make sure our trading relationship with the EU is updated to reflect the global supply chain difficulties that all manufacturing industry is facing. So does she plan to make a formal request to reopen negotiations with the EU on the trade and co-operation agreement? It has been made repeatedly clear that without changes to the future trading arrangements, and without a proper industrial strategy, the UK car industry is at risk. What assurances can she give to my constituents that their futures matter to this Government? The UK car sector is the jewel in the crown of our manufacturing industry. If we lose it, it will not be coming back. So please, Minister, take action now.
The automotive industry employs around 166,000 people and includes major manufacturers, such as Jaguar Land Rover, Nissan, Toyota and BMW. We are leveraging investment from industry by providing support for new plants and upgrades to ensure that the UK automotive industry continues to thrive into the future. This includes Nissan’s £1 billion north-east electric vehicle hub, Ford’s £380 million investment in Halewood to make electric drive units, and Stellantis’s £100 million investment in Ellesmere Port for EV van production.
We work closely with the sector through the joint Government and industry-led Automotive Council, of which I am the co-chair, which discusses opportunities for growth, competitiveness and future opportunities. We also meet regularly with individual long-standing and new automotive companies to discuss a range of issues, including future investments.
On Government support, the Government and industry have jointly committed approximately £1.4 billion in innovative projects through the Advanced Propulsion Centre to accelerate the development and commercialisation of strategically important vehicle technologies, strengthening our competitive edge internationally. We also work on the automotive transformation fund, which puts the UK at the forefront of transition to zero-emission vehicles.
Of course, I must not forget the Faraday battery challenge, which, with an overall budget of £541 million since 2017, worked to establish the UK as a battery science superpower. This is what keeps us at the forefront as we try to adapt and use a new technology.
I wish to put it on the record that there are regular reviews of the EU-UK trade and co-operation agreement, but, as the hon. Gentleman will know, that responsibility sits with the Foreign, Commonwealth and Development Office and is not something that I can respond to on its behalf. However, I can provide assurances—[Interruption.] I am just about to do so, if Members will allow me to continue. I can provide assurances that I and the Secretary of State for Business and Trade have raised these issues with our colleagues across Government and have had productive conversations with our counterparts in the European Union. We are aware of the concerns of UK and EU car makers about the challenges and, of course, we continue to make strong representations.
For months now, Labour and industry have been warning the Government that this cliff edge was coming. It is a statement of the blindingly obvious that the lack of battery-making capacity in the UK, combined with changes to the rules of origin, was a car crash waiting to happen. It is a fact that, without domestic batteries, there will be no domestic automotive industry in the UK, yet the Government have no strategy to bring in the investment and infrastructure needed, and the rules of origin just make that even more compelling. This deadline to conform with the rules of origin has not been a secret, but where is the urgency, the ambition and the determination to keep our world-class automotive industry in the UK?
Once again, industry has been treated to a Government who are fond of big-state, top-down targets, but completely missing in action when it comes to how to deliver on those targets. Dare I say it that, despite warning after warning, it is clear that this Government are asleep at the wheel. Labour has a plan, through our industrial strategy—which Members can read as it is published—not just to protect the industry and the jobs that we have, but to deliver even more. We will part-finance those eight gigafactories, create 80,000 jobs and power 2 million electric vehicles, matching the incentives on offer from our rivals.
This is not just about public investment; it is about planning reform, changes to business rates, domestic energy security and supply, and more. That is the action that is needed. With respect, the Minister has not really answered any of the questions from my hon. Friend the Member for Ellesmere Port and Neston yet, so will the Government outline how they will secure the battery-making capacity that we desperately need in the UK? What is the Government’s view on the suitability and application of the rules of origin as they currently stand? Finally, will the Government wake up, grab the steering wheel and get control of the situation before it is far too late?
I am going to talk not about a promise, but about the programmes that are in place to ensure that supply chains and gigafactories are here to support the whole automotive sector. I have spoken about the Advanced Propulsion Centre—perhaps the Opposition do not understand how important that is—the Faraday battery challenge and “Driving the electric revolution”. We must not forget the Envision AESC announcement of its investment in a gigafactory in Sunderland or Johnson Matthey confirming its investment in the construction of a factory in Hertfordshire for proton exchange membrane fuel cell components for use in hydrogen vehicles.
Discussions are constantly ongoing with other potential investors into gigafactories in the UK. We are not doing this by ourselves in Government, making decisions that seem good on paper; as I said, I co-host the Automotive Council and just this week—possibly on Monday or Tuesday, I cannot remember—I caught up with Aston Martin, Bentley Motors, BMW, Ford, Jaguar Land Rover, McLaren Automotive, Nissan, Stellantis, Tesla, Toyota and the Volkswagen group. They are keen to continue working with us to ensure that we have supply chains here in the UK.
Stellantis has warned:
“If the cost of EV Manufacturing in the UK becomes uncompetitive and unsustainable operations will close.”
Has the Minister made an estimate of how many job losses it would lead to if the world’s fourth-largest carmaker closed its UK factories as a result of Brexit? Andy Palmer, a former chief operating officer, said that we are “running out of time” to get battery manufacturing in the UK, and that a failure to address the issues caused by Brexit will lead to the loss of 800,000 jobs in the UK. Car manufacturing has fallen sharply since the UK chose to leave the EU, from more than 1.5 million in 2016 to just 775,000. Does the Minister accept that the only way for Scotland to stop the decline of our industries is to gain independence and rejoin the world’s largest single market?
Let us talk about the situation as it is: confidence in the UK automotive sector, and in the whole supply chain, has meant that Stellantis has invested more than £100 million in the Vauxhall plant in Ellesmere Port. That will see the plant transition to become the first mass-market all-electric plant in the UK, producing electric vans from 2023. That shows the confidence that that particular firm has in the UK.
We know that the production of electric units will go up, whether for private or commercial use, and we are doing everything we can to provide support on some of the more challenging issues in car manufacturing, such as access to energy and the cost of energy, which we have been working on as well. It is internationally challenging—I accept that—but the UK continues to be incredibly attractive for car manufacturing.
My hon. Friend will be pleased to know that we also published in the integrated review an updated report on critical minerals to ensure that we are able to access to those minerals and are not relying on a particular nation, but can diversify. As I have said, I co-chair the Automotive Council, and that will provide a huge amount of assurance to his constituents that we are working hand in hand with the sector.
“The UK has strong promise as an EV battery production location due to strong demand, a skilled workforce, and attractive manufacturing sites.”
We somehow seem to be forgetting all the positive things that are said in submissions by the automotive sector.
We are working with those in the sector, as I have said. I meet them regularly and was with them just this week to deal with a number of challenges, whether to do with the Inflation Reduction Act or gigafactories. I can, of course, confirm that we are working with industry to do everything we can to ensure that there is greater commitment to gigafactories here in the UK.
“The Government is committed to securing investment into the automotive sector, which will play an important role in levelling up across the UK and driving down emissions to net zero by 2050.”
In the light of that, today’s intervention by Stellantis is extremely worrying. If the Government cannot get an agreement to keep the current rules until 2027, what assessment have they made of the effect that the 10% tariff will have on the UK car manufacturing industry?
We are aware of the rules of origin issue and it is raised with the Automotive Council, of which I am a co-chair. As I said earlier, the FCDO leads on this issue, but my Secretary of State is in constant contact to ensure that we get the best deal we can.
But the point is this: there are a number of challenges around supply chains. We are looking at that issue with the Automotive Council, and also through the integrated review and the critical minerals refresh. There was a challenge internationally when it came to energy costs; we had the EBRS and now we have the supercharger. I am the co-chair of the Automotive Council. I am sure that, if the hon. Member for Warwick and Leamington (Matt Western) wanted to attend, he could write to the co-chair and ensure there could be time for him to be there as well. That work is done collaboratively with all the automotive CEOs, CFOs and leading managers across the UK. I do not determine who comes to that meeting and represents the automotive sector; that is for them to decide.
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