PARLIAMENTARY DEBATE
Stellantis Luton - 27 November 2024 (Commons/Commons Chamber)
Debate Detail
I know that yesterday was a dark day for Luton. This is an iconic plant powered by a talented workforce. There are very few people in the town who do not know someone who works at the site. I wish to outline the steps that the Government have taken to try to prevent this outcome, and how we are going to support the industry and the area going forward.
The Transport Secretary and I found out about the challenges of this site just 10 days after the election. The global chief executive officer told us that he felt extremely frustrated by the lack of action from the previous Government, which meant that his desire was to close the Luton plant. Since then, we have been involved in intense negotiations with the company to try to find a way to keep the site open. Following these initial meetings, in July of this year the company announced its intention to conduct a review of its operations in response to the significant pressures that it was facing in key markets. Following the review, the company set out plans on Tuesday, which will see manufacturing at the two current Stellantis plants consolidated into a single location.
We were, and are, aware that Stellantis has significant excess capacity across Europe. The company’s talk of efficiency and investment elsewhere will of course be positive for its bottom line, but that will come as no comfort to the workers affected.
For more than a century, Vauxhall as a brand has been synonymous with Luton, and we are bitterly disappointed to hear that this relationship looks likely to end. Our No. 1 priority is the people of Luton, who will of course be devastated by this decision. News such as this rips through the heart of communities, sending shock waves beyond those immediately impacted—through their families, their communities and the businesses that they support. I grew up in a car community and know what it is like when half the street work at the same site.
We have asked the company to urgently share its full plans with us and to work with the Government, so that every single worker who is impacted receives the support they deserve. The Department for Work and Pensions stands ready to help anyone affected with a rapid response service designed exactly for these kinds of scenarios. It provides vital support and advice to both employers and their employees facing redundancy.
I want the House to be aware that we have done everything we possibly can to prevent this closure. My right hon. Friend the Secretary of State for Transport and I met Stellantis many times over the summer and again on Tuesday morning to discuss the situation and the acute pressures that the company is facing. We have worked hard to find a solution that would support the business and ensure that people kept their jobs, and we confirmed in writing that we were willing to consider any solution put forward.
However, despite our best efforts, we have been forced to accept that this is ultimately a commercial decision by Stellantis as it responds to wider challenges within the sector. And I will be frank with hon. Members: these challenges are not confined to any one company. Car manufacturers around the world are battling with increased costs, supply chain issues and changing consumer demand in a highly competitive, fast-evolving market. Hon. Members will know that last week Ford also announced 800 job losses in the UK over the next three years as part of a major restructuring programme across the whole of Europe. Many of the challenges faced by our car manufacturers are global in nature and they cannot be resolved by UK Government intervention alone.
Although this announcement is not what we wanted or what we worked towards, we must not mischaracterise this. It categorically does not signal a retreat by Stellantis from the UK. The plans announced by the company will also see it investing £50 million as it consolidates manufacturing at its Ellesmere Port plant in Cheshire. Hon. Members will know that Ellesmere Port is the UK’s first all-battery electric vehicle plant, and Stellantis’s decision to bring production of the Vivaro electric van to there is welcome. We will of course continue to work closely with the company on next steps of the consolidation process, including the proposal to offer affected workers a relocation package to take up roles at Ellesmere Port. The investments being made at Ellesmere Port and elsewhere demonstrate that there are real opportunities for UK manufacturing as part of the move to zero emission vehicles, but the transition has to be properly managed. That requires a Government who are on the pitch—something that the car industry finally has in this Government.
The Government are determined to support automotive companies as they revamp their production lines, adjust their business plans, and develop the technology needed for the next generation of zero emission vehicles. These cars and vans are greener, cleaner and essential to our net zero ambitions. Roughly 30% of the UK’s greenhouse gas emissions come from cars, vans and lorries. To tackle that, and wean our country off imported fossil fuels, we need zero emission vehicles, but the Government are resolute that the transition must be done in partnership between Government, industry and of course consumers. That is why the Secretary of State for Transport and I are listening closely to the concerns of the automotive industry and the wider sector about the transition to electric vehicles, and about the Conservative party’s zero emission vehicle mandate.
We held a roundtable earlier this month to hear directly from major automotive companies, the Society of Motor Manufacturers and Traders and the charging sector, and in response we will shortly fast-track a consultation on our manifesto commitment to ending the sales of new pure petrol and diesel cars by 2030. We will use that consultation to engage with industry on the previous Government’s ZEV transition mandate, and the flexibilities in it, and we will welcome the industry’s feedback as we move forwards. We want to do everything that we can, together with industry, to secure further investment in the British automotive sector, now and over the long term. That is why in the Budget the Chancellor committed £2 billion to research and development and capital funding to support the zero emission vehicle manufacturing sector and supply chain.
Also, our industrial strategy will give the automotive sector the certainty that it deserves, and will send a clear signal to global boardrooms that the Government are in this for the long term. We want to invest alongside them, create a policy environment that allows them to prosper, and help them to do what they do best: bringing good jobs to every part of this country. Through the national wealth fund, we are unlocking billions in private investment in new green infrastructure, including gigafactories, and supporting growth and job creation—not just in the automotive sector, but in the wider economy. We are working with investors to build a globally competitive electric vehicle supply chain in the UK, and so are laying the foundations for growth over the long term.
The closure of the Luton plant by Stellantis is a bitter blow to our car industry, to Luton, and to the workers who made Vauxhall a world-class brand, producing world-class cars and vans, but we must not lose sight of the fact that those vehicles will continue to be designed and built here in the UK, at Ellesmere Port. That matters to me, and it matters to the Government. When I say that decarbonisation must not mean deindustrialisation, I mean it. Winning the race to net zero and having a world-leading automotive sector must go hand in hand. We must never undermine the transition, as the previous Government did, but we will be pragmatic in ensuring that regulation and incentives are working as they should. Contrived cultures wars are not what the industry needs; instead, it needs a partner in Government ready to look at the practical solutions that are necessary. We stand ready to do that, and I commend this statement to the House.
The Opposition stand by those hard-working people. We are on the side of the plant workers, because we know the value of skilled work and the transformative power of British business. The closure of the Luton plant, I fear, is just a down payment on the jobs that will be lost through this Government’s relentless attacks on industry, their neglect of the realities of business, and their failure to meet their promise not to raise taxes. The Government owe it to the plant’s workers to at least be honest. This decision is the direct result of a Government policy that is simply unworkable for industry. Stellantis told us as much when it said that the decision was
“made within the context of the… ZEV mandate”.
The Society of Motor Manufacturers and Traders said,
“the UK situation is particularly acute with arguably the toughest targets and most accelerated timeline in the world,”
and that
“unsustainable business costs undermine UK industry”.
The Government’s policy on zero emission vehicles is a jobs killer. They say they have been talking since July, so why this panicked U-turn today, when it is already too late? The last Government acknowledged that the previous vehicle mandate was too stringent. We took the decision to push it back, recognising the impact that it would have on industry. We listened to Unite the union on this. The Secretary of State’s party unilaterally reversed those changes and brought the deadline forward to 2030. Instead of listening to Unite, he listened to the Member for climate central, the right hon. Member for Doncaster North (Ed Miliband).
Even today, the Secretary of State speaks of ending the sale of new purely petrol and diesel cars by 2030. He tried to slip a subtle change in there, the consequences of which are significant. I welcome the fact that, for once, this Government have listened to business, but he appears to be misleading business at the same time. Can he explain exactly what his policy is? As we see today, there are real costs to these targets. Instead of having the courage to recognise that he was wrong, his solution appears to be yet another consultation, which is yet to take place. How many automotive businesses has the Secretary of State spoken to about the targets? In any of his conversations with Stellantis, did it ask him at any point to remove the fines? Has he met the right hon. Member for Doncaster North to entreat him to row back from his ideological pursuit of domestic targets, which ignores the fact British jobs are being exported to more carbon-intensive economies?
Most of all, we must not ignore the elephant in the room: the timing of the decision. It follows a Budget that declared war on business, with a triple whammy of tax rises that remove incentives for growth and investment; a £25 billion jobs tax, which has left boardrooms across the country putting recruitment and pay rises on hold; and an Employment Rights Bill that the Secretary of State wrote while hand in hand with his union paymasters, which is already deterring businesses from hiring in Britain.
Businesses are ringing the alarm bells. The CBI, the British Retail Consortium, UKHospitality and the Society of Motor Manufacturers and Traders have all said that the pressures on business are too much to swallow. In open letter after open letter, statement after statement, they say that Labour is not on their side. It lied about its plans. It is attacking working people, and now it is attacking the vans that they go to work in. The businessmen and women who gave Labour the benefit of the doubt are regretting it. When will the Secretary of State listen? When will his Government abandon their attack on British business? Will he lead the charge to change course? Why will he not suspend the fines and targets that have led to today’s tragedy?
Labour has acted with pragmatism; we have been willing to look at any part of the policy to prevent this outcome. The simple truth was that it was too late, after 14 years of failure, to put this right. I say to the hon. Gentleman with all politeness that he is out of touch with industry, with workers, and even with what the previous Conservative Government did, and that speaks for itself.
On subsidies, the Trade Remedies Authority and the potential response from the UK, we have to bear in mind two things. First, under the system that we inherited, industry makes the application. I have powers to do that, as Secretary of State, but they have never been used, to my knowledge. Secondly, we must remember that the UK automotive sector is a world-class, export-led sector. If we were to go down any kind of protectionist route on principle, we would have to bear in mind what it would mean for the markets we sell vehicles into. If we sell 80% of our product abroad, we have to consider the international export position, alongside the domestic market position. If industry makes that request, of course that request will be followed up, in accordance with the way the system operates.
Inevitably, the Conservatives will play politics with the announcement, but there is still no apology from them for trashing the economy. There is not one moment of reflection that the previous Government’s policy on electric vehicles was a disaster. The policy simply did not do enough on infrastructure and incentives. The Government therefore need to fix the Tories’ mess. As a starting point, the Government urgently need to work with Vauxhall to mitigate this major shock for the area. The Government have said that they will fast-track a consultation, but it needs to be fast-tracked today. Urgency is the key, so when will that consultation start, and when does the Secretary of State expect it to report? The previous Government did not do enough to incentivise people to buy electric vehicles, nor did they provide the right infrastructure. What are the Government doing to increase sales of electric vehicles and increase the number of charging points in places such as my constituency?
Turning to the hon. Gentleman’s specific questions, there were policies in the Budget relating to charging infrastructure—which I recognise is a key part of this issue—as well as £2 billion for research and development through the automotive transformation fund and the partnership with business that we use that fund for. Obviously, the consultation he asked about will come from the Department for Transport. The shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), asked why that consultation is happening, but the previous Government set these policies out in primary legislation, so he knows that there are processes to follow. Any conversation about the thresholds in the existing policy would be for my right hon. Friend the Secretary of State for Transport to have, but I refer back to my points about how the system works and the flexibilities and allowances in, and how we can make sure that we are giving automotive manufacturers in the UK a system that lets them get to the transition they and the consumer want, but in a way that works with industry to enable that transition to happen for the benefit of the United Kingdom.
Closing the Luton site will damage our local economy, with 600 more jobs at risk in the supply chain and workers and families receiving this devastating news just before Christmas. I welcome the comments of the Secretary of State that decarbonisation must not mean deindustrialisation and the decimation of good, skilled jobs. Will his announcement today move the dial in discussions with Stellantis to help protect the Luton site? I also welcome his tone—he is taking this seriously, compared with Opposition Members—so will he join me in visiting workers and their trade union representatives at the Luton site to listen to their concerns?
I thank the Secretary of State for his statement and welcome any support for Vauxhall workers and their families, who are understandably devastated by Stellantis’s decision, especially this close to Christmas. It follows the closure of the SKF plant in Luton North earlier this year after a century of manufacturing. Like SKF, Vauxhall is, or was, synonymous with Luton. Stellantis’s callous decision will impact our whole town—our whole region, even—so what support will be offered, not just to the skilled and dedicated Vauxhall workers who are losing their jobs but to our town as a whole, to cope with the loss of this manufacturing giant that Luton helped build?
I have made clear the support that is available, and I reiterate that promise. I do not want to minimise the impact of this decision in any way, but I believe my hon. Friend’s area is a place of considerable economic strength, with firms in the engineering, aerospace and air travel sectors and in the creative industries. There is a lot to be optimistic about for the future, but I recognise that that does not take away the bitterness of this particular blow for Luton at this time.
I urge the Government to introduce more flexibility in the annual targets from 2024 to 2029, introduce consumer incentives, and consider redirecting any penalties towards EV charging infrastructure, not to Chinese Government car companies.
We do listen to those in industry and we have a very close relationship with them, which is why we understand that the destination they want is 2030. The pressures on the system in the next few years are because of this situation, but—I say this in good faith to Conservative Members—I do not believe that the Ministers at the time considered the full set of European and global economic factors when making these decisions. That is why we have to get the balance right. Given that we are an export-led automotive producer, we should also recognise that if we were not ambitious about the transition, we would lose our export markets—we would not have anything to sell, because other countries have such policies and that is where the consumer is going. This is about how we support the transition, and we are working closely with they industry on that.
I thank the Secretary of State for coming to the House on such a difficult day for the car industry, and all our thoughts are with the workers in Luton today. I thank him for the work he is doing in engaging with the industry and with unions on a better way forward on electric vehicle targets. This news is really disappointing, but does he agree that we can and should be positive about the future of the automotive industry in this country? It matters to me locally as the MP for many businesses in the automotive supply chain, as I know it also matters to many Members across the House.
I want nothing to do with the approach of the previous Government, which had a really detrimental effect on the industry, as it will tell any hon. Member very clearly. I am listening to what it means to have this change in economic circumstances in relation to private demand for electric vehicles, and I want to work with industry to get to the place or the destination that I think we both strongly support.
To be clear, on the wider point the hon. Member makes about business confidence, I recognise that the outrageous inheritance this Government walked in on, with Conservative Ministers not even planning to say how they would pay for the promises they had made, created speculation about where the revenue would come from. I regret the fact that we had to make difficult decisions. Ideally, we would not have wanted to make those decisions, but we are the people fixing the foundations and clearing up the mess the Conservative party left behind. There can be no long-term prosperity unless we have a serious Government willing to do that.
I am sure the whole House will want to join me in paying tribute to my good friend, my hon. Friend the Member for Luton South and South Bedfordshire (Rachel Hopkins), who is a fierce champion for her constituents. Does the Secretary of State agree that the news yesterday only highlights further the urgent need for a UK industrial strategy, and demonstrates the challenges that UK industry faced under the last Government without such a strategy in place?
On electric vehicles specifically, I am a free trader by instinct, but what China is doing in that area is way beyond normal competitive practice. It is dumping electric vehicles very cheaply on world markets, a point highlighted by the Chairman of the Select Committee, the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne). What specifically do the Government intend to do about that to maintain fair competition and give British companies, including Ford and Vauxhall, a fair chance to compete?
I reiterate my earlier comments to the Chair of the Select Committee. We have not changed the Trade Remedies Authority and the system we inherited. If Ford or any other company wants to make a referral against unfair competitive practices, it can do that, but such a request has not come from any part of the industry to date. I would not for a second describe the Chinese economy as one that operates on the market principles with which we are familiar, but we have to be aware that the fundamental threat from China comes from its commitment to research and development, innovation, high-tech solutions and being able to manufacture at scale. We are kidding ourselves if we think the threat is just unfair competition. That economy has an incredible level of ambition for the future, which is why we have to raise our game as well.
The hon. Gentleman asked about specific conversations. As I said in my statement, just last week we had a meeting with all the major UK-based original equipment manufacturers and wider representatives of the sector to talk about the flexibilities that might be required to make this policy work in a way that does not undermine British industry, but gets us to a common destination for industry, Government and consumers together. That is exactly what we are doing, and whatever Conservative Members feel about the previous Government’s policy, I ask them to get behind that ambition.
I cannot make an announcement on the plug-in grant as that is not covered by the Department for Business and Trade, but I confirm to the hon. Member that across the Government, whether in the Treasury, the Department for Transport or the Department for Energy Security and Net Zero, we are all united in wanting to make the transition a success, and we are willing to listen to hon. Members like herself and to industry about the policies that are necessary to do that.
We want this transition to work. This is not about the destination or even the thresholds; this is about the flexibilities, how the policy operates, and what that means for market conditions in the United Kingdom. That is an entirely reasonable and proper response to what we found walking through the door as a new Government, and I see no reason why people cannot pragmatically get on board and support that.
The Secretary of State will understand that with the cost of living crisis that our constituents are struggling through, the last thing on their minds is to afford—forgive me—an all-singing, all-dancing electric car; they are clearly struggling to pay their electric bills. The closure of the plant, which highlights the lack of passion for electric cars, can come as no surprise. What can the Government do to make electric cars affordable for everyone, which would enhance the need for car manufacturers once again?
The hon. Member asked specifically about what we can do to bring down the cost. It is about co-investing with industry in the most efficient forms of production. He mentioned an all-singing, all-dancing EV, but there is a whole range of vehicles available. Many of our producers have led on family cars. The Nissan Leaf is a great example of that, made by some of my former school friends in Sunderland. We should get behind that and talk about how great those products are. But, fundamentally, we need now to bring down not just the cost of the charging infrastructure but the unit cost. That can be done only by investment in efficient production and scale production. That is why the destination is so important. Working with industry on that destination is key to delivering the outcomes that I think he and I want.
Contains Parliamentary information licensed under the Open Parliament Licence v3.0.