UK Car
Industry
12.35pm
(Ellesmere Port and Neston)
(Lab)
(Urgent Question): To ask the Secretary of State for Business and
Trade if she will make a statement on the future of the UK car
industry.
The Minister of State, Department for Business and Trade ( )
The automotive industry is vital. It is a vital part of the UK
economy and it is integral to delivering on levelling up, net
zero and advancing global Britain. After a challenging period
where covid and global supply chain shortages have impacted the
international automotive industry, the UK sector is bouncing
back. Production is increasing, and in 2022 the UK’s best-selling
car was the Nissan Qashqai, built in Sunderland.
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.
Thank you for granting this urgent question, Mr Speaker, and I
thank the Minister for her response.
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.
Ms Ghani
The hon. Gentleman will know, when I respond to this question,
just how seriously I take the sector, as he does—he and I have
worked on this previously. I agree that the automotive industry
is a vital part of the UK economy and I will go on to explain all
the work we are doing there; if we add it all up, it is more or
less a very strategic strategy. We know that it is integral to
delivering on our levelling-up agenda, which is why it matters to
so many constituents and why there are so many MPs in the Chamber
today. We know that it matters to net zero and to advancing
Global Britain. We also know how important this is to Members of
Parliament because of the number of people who work in the
sector.
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, Energy and Industrial
Secretary 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.
(Rugby) (Con)
The automotive industry has been a huge success story for the
west midlands and can be so in the future as we transition to
electric vehicles. However, with 40% of the weight and cost of an
electric vehicle being made up in the battery, it is vital that
we get a battery manufacturing site in the west midlands. A site
has been allocated at Coventry airport, immediately adjacent to
the Battery Innovation Centre, where some innovative and
brilliant work is taking place. Will the Minister provide
Government support for the proposed gigafactory at Coventry
Airport?
Ms Ghani
I am grateful to my hon. Friend for raising this issue. He and I
worked together on the Business, Energy and Industrial Strategy
Committee. He has always been a passionate advocate for his
constituency. It is indeed a fantastic proposal and we are keen
to make sure that we can support as much investment as possible
and that sites are set up for gigafactories. We know how
important it is to ensure that the supply chain is as reliable as
possible. If my hon. Friend would like to meet me, we can go
through the proposals in further detail.
Mr Speaker
I call the shadow Secretary of State.
(Stalybridge and Hyde)
(Lab/Co-op)
I thank my hon. Friend the Member for Ellesmere Port and Neston
() for securing this urgent
question on an area of fundamental importance not just to his
constituency, but to the prosperity of the whole country.
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?
Ms Ghani
It is a good to hear that the Opposition are expecting businesses
to make decisions on promises that may or may not come down the
line, and on promises of sums of money that have been allocated
and reallocated a number of times by the Labour party. This is
not just my view: look at the figures from the Society of Motor
Manufacturers and Traders, showing that British commercial
vehicle production grew by 39% in 2022, the best since 2012, with
exports surging by 63%. We are determined to make the UK the best
location for export-led automotive manufacturing.
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.
(Tunbridge Wells) (Con)
To secure the future of our vital automotive sector, we need to
manufacture batteries in the UK. The industrial strategy in 2017,
which my hon. Friend the Minister referred to, established the
Faraday challenge to build on our cutting-edge research
capability. The battery innovation centre was set up to develop
manufacturing capacity. While the strategy is vital, and must be
refreshed and continued, it is necessary but not sufficient; we
need activism. When Mrs Thatcher lured Nissan and Toyota to this
country, she travelled to Japan to make the case for locating
here. Does that level of activism exist in the Government, and
will the Minister commit to ensuring that we have those
investments from companies around the world in the UK?
Ms Ghani
I believe that my right hon. Friend was the Secretary of State
for Business, Energy and Industrial Strategy when the decision on
the Faraday battery challenge was taken. He made sure that £211
million of funding was in place, so that technology could be
developed to make batteries as efficient as they can be. That is
just one part of our trying to secure investment into the UK. I
can confirm that meetings are constantly taking place, including
at Secretary of State level, with companies based in the UK and
overseas, meeting with chief executive officers and chief
financial officers to ensure that the UK is seen as an attractive
place to manufacture cars. There is a global challenge around
supply chains—it is not just a domestic issue—and we are keen to
ensure that the UK continues to be seen as the best place to
manufacture cars.
Mr Speaker
I call the SNP spokesperson.
(Paisley and Renfrewshire
North) (SNP)
The Minister is sticking her fingers in her ears and burying her
head in the sand on this question. The Government were told time
and time again about the rules of origin issues, and the car
industry seems to be another casualty of the Government’s
damaging Brexit. Increasing the uptake of low-emission vehicles
is vital to meeting our net zero goals, but the UK’s disastrous
trade deals are making the domestic manufacture of those vehicles
impossible.
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?
Ms Ghani
I would not expect anything less than a rerun of the conversation
on Brexit. Fundamentally, the hon. Member does not like Brexit,
does not like any trade deal, and does not even like the most
integrated single market between England and Scotland, so I know
that he has nothing appropriate to say.
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.
(South West Bedfordshire)
(Con)
Many of my constituents work at the Vauxhall Luton van factory,
which makes the incredibly successful Vivaro, so this issue
really matters to them and to me, and it matters for our
industrial future. Will the Minister flesh out in a little more
detail the plan to get more battery manufacturing capacity here
in the United Kingdom? When will there be announcements? What
number of battery plants does she believe the United Kingdom
needs to have a successful car manufacturing industry?
Ms Ghani
I thank my hon. Friend for that incredibly sensible question. I
have talked about all the programmes of work we have in place to
attract gigafactories to the UK and to ensure that we are using
the best technology that we can. We have the automotive
transformation fund, which is building globally competitive
electric vehicle supply chains, and I have spoken about the
Faraday project, which will unlock a huge amount of research and
development. We have Envision, too. We are working with and we
constantly talk to other investors to help them come and
establish gigafactories in the UK. We know how important it is to
have supply chains to deal with the remarkable amount of cars
being manufactured here.
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.
Mr Speaker
I call the Chair of the Business and Trade Committee.
(Bristol North West) (Lab)
The story overnight came from written submissions to my
Committee’s inquiry on the future of battery manufacturing in the
UK. Stellantis will be here in Parliament next Tuesday to give
further evidence. The Minister will know two things: that she and
her departmental officials are in ongoing negotiations with other
car manufacturers in the UK beyond Stellantis, and that all the
car companies are raising exactly the same issues and are asking
for a step up in activity from the Government and an end-to-end
industrial strategy to show that the UK is serious about the
future of UK production of electric vehicles. Will the Minister
confirm for the record that those assertions—that the Department
is in negotiations right now with other car manufacturing
companies and that they are raising exactly the same issues as
Stellantis—are indeed correct?
Ms Ghani
I am grateful to the Chair of the Select Committee for being
here. I was once on his Committee. Overnight, I went through the
transcript and some of the submissions to that inquiry, and I
noticed the submission from Nissan. I know that nobody wants to
pick out all the positive things that were said, but there was a
great point on page 4:
“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.
(Scunthorpe) (Con)
Manufacturing and industry in this country are definitely an
ecosystem, and when we start to lose chunks of it, that not only
devastates communities but affects wider supply-chain businesses.
The Minister will know that steel is crucial to car
manufacturing. Can she reassure me and my constituents that she
is considering those supply-chain businesses and doing everything
she can to ensure that we have a level playing field in this
country, not just for the steel industry but for manufacturing
more widely?
Ms Ghani
My hon. Friend is once again the lady of steel, raising the topic
on behalf of the whole industry across the UK. She will know
about our recent work to look at procurement and the whole
lifecycle of supply chains, and to ensure that we are doing
everything we can in the UK. She knows about our commitment to
the steel sector—we have provided billions of pounds-worth of
support for energy costs, and now there is a huge amount of
support for decarbonisation—and because of her work, steel will
not be left out of any conversation when it comes to advanced
manufacturing.
(Wansbeck) (Lab)
Recharge Industries, the organisation that bought out
Britishvolt, is committed to building a gigafactory on the
Britishvolt site in Cambois in my constituency. However, there is
a huge issue with Northumberland County Council relating to a
buyback proposal on the land of the proposed gigafactory. Will
the Minister please intervene to facilitate discussions between
all parties to ensure that we are not let down again at the site
in Cambois, and that Recharge Industries gets every support it
needs from the Government to build that gigafactory and bring
9,000 jobs to the north-east?
Ms Ghani
We are pleased that Britishvolt has been successfully acquired.
We know that investment supports high-quality jobs in industries
of the future, and we are determined to ensure that the UK
remains one of the best locations. We look forward to learning
more about the Recharge Industries plans, and we continue to work
closely with the local authority—it is not a Government
decision—to ensure the best outcome for the site. Because I am so
keen to ensure that we continue to have good news in this sector,
I will commit to meeting the hon. Member this week so that he can
ensure that the information I am getting from my officials is
absolutely correct. If there is anything more I can do in
relation to the local authority, I will do my best.
(Luton South) (Lab)
I am very proud to have the Vauxhall van plant in my
constituency. I was going to ask the Minister whether the
Government accepted that setting ambitious targets, such as the
zero emission vehicle mandate, without a plan, alongside the
issues with the rules of origin, was simply reckless, but I want
to impress upon her that what we are debating impacts on people’s
lives and livelihoods. Will she accept an invitation to Luton
South to visit the Vauxhall van plant and speak with workers
there, and their representatives, to see how Government decisions
impact on people’s lives?
Ms Ghani
We are very much aware of how this impacts on people’s lives. I
can tell by the number of Members in the Chamber. I co-chair the
Automotive Council, so I know how incredibly important it is that
we are sensitive to the needs of the industry while delivering on
our other ambitious targets, including net zero. For the meeting
this week with the sector, I took a delegation over to the
Department for Transport to explain a little further the
challenges of the ZEV mandate. There is a huge commitment to
delivering electric vehicles, but there are also challenges if we
want to ensure that the UK automotive sector continues to be as
competitive while delivering on our net zero ambitions. Of
course, if the opportunity arises, I would be more than happy to
visit the hon. Member’s manufacturing site when she is available.
I will do my very best to try to make that happen.
(Richmond Park) (LD)
In a written answer to me in November last year, the Minister
said:
“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?
Ms Ghani
The hon. Member’s premise is wrong. I can list all the
investments that have taken place in the sector, including £100
million from Stellantis in Ellesmere Port. That is taking place
because there is confidence in the UK and in the supply chains.
There has been a £380 million investment in Halewood. We have £1
billion of investment in the north-east hub between Nissan and
Envision. That is all investment in the UK. Bentley announced
£2.5 billion of investment in 2022 to produce its first
battery-electric vehicles by 2026, securing 4,000 jobs at its
Crewe plant. None of that was in the hon. Member’s script as she
stood up.
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.
(Birkenhead) (Lab)
Stellantis’ warning that it might be forced to close its UK
factories will be greeted with dread by the large number of my
constituents who work in the Vauxhall car plant in Ellesmere
Port, where I myself was employed for many decades. The
automotive sector now faces an existential threat as a result of
the Government’s recklessness in setting such ambitious rules of
origin targets, with no clear plan on how they would be
delivered. With 800,000 jobs hanging in the balance, can the
Minister confirm that the Government are prepared to sober up,
get real, and work with the EU to revisit the rules of origin
requirements in the trade and co-operation agreement?
Ms Ghani
Stellantis gave evidence to the Select Committee on a number of
issues, and it seems peculiar that just one particular point has
been raised, which has been in process for quite some time. The
confidence that the hon. Member can give his constituents is that
Stellantis has invested over £100 million in the UK—that is the
confidence that employees have as well. A series of submissions
were made to the Select Committee, and I am sure that the Chair,
the hon. Member for Bristol North West (), will see a lot of activity
on the website going forward. I read out the submission from
Nissan expressing the confidence it has in the UK, as well as in
us being able to deliver a huge amount of technological
advancement in providing net zero vehicles. I ask the hon. Member
for Birkenhead () to read the submission in
full, not just the snapshot that was in the news.
(Washington and Sunderland
West) (Lab)
As the Minister will be aware, Sunderland is home to Nissan—it is
in my constituency—and there are thankfully already shovels in
the ground for the Envision AESC’s battery gigafactory, but we
need more than one gigafactory. The sustainability of other UK
manufacturing operations is at massive risk, as we have heard
today, because the Government are incapable of seeing through any
strategy. They knew this day was coming. When will the Government
renegotiate the trade and co-operation agreement?
Ms Ghani
The hon. Member is absolutely right: there is a fantastic project
with Nissan and Envision that will support 6,200 jobs in that
supply chain, with more than 900 new Nissan jobs and 750 new jobs
at the Envision gigafactory. By 2025, that site will see a
projected 100,000 battery electric vehicles produced each year by
Nissan; it is the first in the UK at that scale. All the other
programmes of investment that I explained, whether that is the
automotive transformation fund or the Faraday battery challenge,
are what we are using to attract further investment in the UK,
especially in gigafactories. That is exactly what we are working
on—it is what I am working on as the co-chair of the Automotive
Council.
Dame (Llanelli) (Lab)
The transition to electric vehicles means not only new battery
and engine factories, but significant investment in car component
factories such as Gestamp in my constituency, which has developed
lighter, tougher car body parts. Multinational companies such as
Gestamp are currently making crucial decisions about where to
site the production lines of the future, so with the US Inflation
Reduction Act and the EU refining its response, what are the
Government going to do to reduce energy costs both now and in the
long term, to provide a coherent industrial vision and strategy,
and real incentives for companies such as Gestamp to invest their
new lines here in the UK?
Ms Ghani
Those are the exact conversations that we have been having for
quite some time with manufacturers in the UK. Of course, IRA is
not just a challenge for us, but a challenge internationally—the
hon. Member has no doubt seen the response from Europe. We are
also putting together a response collectively for all the
manufacturers within the UK. It is important to note all the
support we have given to energy-intensive industries, including
the energy bill relief scheme, and now we have the supercharger
coming down the line as well. Fundamentally, we also have the
critical mineral refresh that is in the integrated review, which
will provide further assurance that we can get hold of the basic
goods—the critical minerals—that are needed to ensure that supply
chains are reliable for manufacturers in the UK.
(Warwick and Leamington)
(Lab)
Never has an industrial strategy been more needed, and never have
a Government been found more wanting. We have just 2.5 GW in
production currently with Envision, and as the right hon. Member
for Tunbridge Wells () said, it needs activism, but I
am afraid the signals just are not there. As Chancellor, the
Prime Minister gave a keynote speech to the automotive industry
last May. He spoke for just one minute and 46 seconds, and the
delegates were left feeling disrespected by his lack of
commitment. Unfortunately, this does affect international
corporates that are looking to invest, and between the US with
its IRA and the investments in Europe—in Germany, France and
Spain—we are in serious danger of losing out. As such, will the
Minister please convene a cross-party meeting with the Automotive
Council to discuss what the plan is to address this real
crisis?
Ms Ghani
If Madam Deputy Speaker allows, I will be more than happy to go
over the allowed one minute in my response, but I do not want to
lose favour with her. The constant requests for the strategy are
peculiar because I can tell Members exactly what we are doing.
The Chancellor identified five key growth sectors for the UK,
which of course include advanced manufacturing, and the
Government have announced £500 million per year for a package of
support for 20,000 research and development-intensive businesses.
We have 12 new investment zones and we are saving £1 billion
yearly by cutting red tape that is burdensome for big
employers.
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 () 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.
(Bristol East) (Lab)
In the UK, we have the largest queue to connect to the grid of
any country in Europe, which is affecting the car manufacturing
industry, including when it sets up new plants. One manufacturer
that wanted to put solar arrays on its plant was quoted 2031 for
grid connection and a £9 million cost; another one was quoted
2037. That is clearly hindering our chances of securing a
prosperous car industry in this country and attracting more
investment. What conversations is the Minister having with her
colleagues to ensure that grid connectivity is resolved?
Ms Ghani
I thank the hon. Member for that question, because it shows that
we have to work across Whitehall. Access to the national grid is
a major issue for any of the large manufacturers and of course,
as their plans grow, they need to have greater access over a
faster timetable than one would have previously thought National
Grid would make available. Conversations are taking place, in
particular with colleagues who were previously in the Department
for Business, Energy and Industrial Strategy, who are now in the
Department for Energy Security and Net Zero and are leading that
relationship with National Grid. The issue comes up regularly in
the meetings that we have with the manufacturing sector, and my
priority is to support the advanced manufacturing sector, so the
hon. Member can be assured that I am campaigning incredibly hard
to make sure that all our advanced manufacturing sites—present or
planned—get access to energy at a timetable that suits the
business, not just National Grid.
(Angus) (SNP)
It is deeply unimpressive for the Minister to come along today
and talk about jam tomorrow—investments in future exotic
technology and the investments that industry is making in that
scenario—when what we actually need is conventional traction
battery manufacturing capacity in the UK now. I am invested in
this because of the supply chain in Scotland and because the
United Kingdom has done everything it can to avoid any of the
automotive foreign direct investment coming to Scotland. What
will the Minister do to address the emergency of a lack of
manufacturing capacity in traction batteries now, not different
types of batteries in the future?
Ms Ghani
It is not about jam tomorrow: it is about money committed
previously and money committed today. The transition to
zero-emission vehicles is being supported by up to £1 billion for
R&D and capital investments in strategically important parts
of the electric vehicle supply chain, building on the £1.9
billion in spending review 2020. The Government have committed
£620 million to support the transition to electric vehicles—that
is committed today; it is not jam tomorrow. I ask the hon. Member
to read all the submissions to the Select Committee, and to
respond to the positive comments that have been made about why
businesses continue to see the UK as a great place to manufacture
cars.
(Denton and Reddish)
(Lab)
If levelling up is to be more than just a slogan, we desperately
need an industrial strategy that matches historical skills to new
job opportunities. I want to impress on the Minister that, in
2002, Oldham Batteries in Denton closed for the last time. It
made car batteries for a long time. It had been a company since
1894, but those skills are still there in Tameside. How do we
match up future job opportunities that the green transport
revolution brings to those skills that still exist in areas such
as Denton and Tameside?
Ms Ghani
I am grateful for the hon. Member’s point. There is no doubt a
huge amount of skills in his constituency and it is absolutely
right that he is coming here to represent them today. I have
spoken about the Faraday battery challenge, which is about using
new technology to ensure that we are producing the best batteries
with the longest lifecycle. Forgive me; he is absolutely right: I
should have mentioned the national electrification skills
framework. That project is being continued by the Faraday battery
challenge. It looks at the skills needed today, tomorrow and even
further going down the line to ensure that these jobs and
opportunities are spread across the UK. If he would allow, I am
more than happy to write to him and to make sure, if it does not
already, that that part of the Faraday challenge covers his
region, too.
(Brentford and Isleworth)
(Lab)
As well as a viable automotive industry, the UK badly needs
adequate road infrastructure to drive electric vehicles on. Do
the Government recognise that demand for private and commercial
electric vehicles is stalling in the UK because there is
insufficient charging infrastructure, which makes buyers
reluctant to make the move? Will the Minister raise that with
Transport colleagues and commit to Labour’s policy of
implementing mandated regional targets to ensure that all parts
of the country get the charging infrastructure they so badly
need?
Ms Ghani
As I mentioned earlier, I went with a delegation of car firms
over to the Department for Transport, and I can see a Minister
from that Department, my hon. Friend the Member for North West
Durham (Mr Holden) on the Front Bench. As I mentioned, it
included Bentley, BMW, Ford, Jaguar Land Rover—I have to read
them all out; they will complain if I miss them off—McLaren,
Nissan, Stellantis, Tesla, Toyota, Volkswagen and Aston Martin. I
think that is everybody. Infrastructure is absolutely key, and we
are doing everything we can to put pressure on the Department for
Transport as it works with its stakeholders to make sure that the
roll-out of charging points, including fast charging points, is
kept up to speed to make sure that buying an electric vehicle is
as attractive as it can be.
Lords repeat
The Minister of State, Department for Business and Trade (The
) (Con)
My Lords, I shall now repeat in the form of a Statement an Answer
to an Urgent Question given in another place:
“The automotive industry is a vital part of the UK economy, and
it is integral to delivering on levelling up, net zero and
advancing global Britain. After a challenging period, where Covid
and global supply chain shortages have impacted the international
automotive industry, the UK sector is bouncing back. Production
is increasing and in 2022 the UK’s best-selling car was the
Nissan Qashqai—built in Sunderland.
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 to
manufacture electric vehicles.
We are leveraging investment from industry by providing
government support for new plants and upgrades to ensure that the
UK 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 EV manufacturing hub in Sunderland;
£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. We will continue to work through our automotive
transformation fund to build a globally competitive electric
vehicle supply chain in the UK, boosting homegrown EV battery
production, levelling up and advancing towards a greener
future.”
18:31:00
(Lab)
My Lords, I watched this Urgent Question in the other place
keenly today but was left disappointed by the number of questions
actually answered, so I thank the Minister for coming here to
answer ours.
This situation is extremely serious. As we know, all
manufacturing is facing supply chain difficulties globally, and
our car industry is suffering. Does the Minister agree that our
trading relationship with the EU should reflect this? Will the
Government follow the sector’s advice by reopening negotiations
on the trade and co-operation agreement to protect it from
further risk?
The (Con)
My Lords, the Government are acutely aware of the global
challenges that the UK car industry faces. We have been
leveraging private investment, alongside government support, to
bring EV manufacturing to UK shores. The UK remains highly
attractive; our workforce is among the most productive in Europe,
and we excel in R&D and innovation. The DBT Secretary of
State is aware of this issue facing the automotive sector, and is
raising this with her counterparts in the EU.
(LD)
My Lords, on 2 March this year I asked a Question of the noble
Lord, , the Minister of State for
the Department for Business and Trade. It was exactly on this
issue. Unless the renegotiation is successful, the manufacturers
of electric cars will not be able to export their vehicles to the
European Union without a 22% tariff. The noble Lord mentioned
Stellantis, which is one of the companies that yesterday made the
point that this is very urgent. I did not get a sense of urgency
from the Minister.
McKinsey estimates that between £5 billion and £18 billion will
be required to deliver the domestic battery capacity we need in
this country. Even if that money was available now, which it is
not, and even if the plans were approved now, which they are not,
there would not be a battery plant at the end of this year. Can
the Minister reassure your Lordships that the Government are
actually on this case, and that the urgency of this is
understood, because the industry does not get that
impression?
The (Con)
The noble Lord makes some very good points. I assure him that the
Government are absolutely on the case. We are not alone; the EU
has challenges of its own.
(LD)
It is a quid pro quo.
The (Con)
It is a quid pro quo. This whole question of battery manufacture
has caught a number of countries, including us, where they do not
particularly want to be. The Government have invested in this
country; the joint investment with the OEMs is about £1.5 billion
and we have put a further £2.8 billion in. That will probably not
do it, but I assure the noble Lord that we are absolutely on
it.
(Con)
My Lords, I declare my interest as the Prime Minister’s trade
envoy for Uganda, Rwanda and the DRC. My noble friend the
Minister must have seen the article in the Times last week about
the exodus of car manufacturers from the UK because of the
shortage of batteries. I have just returned from Rwanda, where I
met Ministers and President Kagame, who expressed interest in a
joint venture manufacturing plant for batteries, because they
have the necessary raw materials. Will my noble friend support
such an initiative to source these important electric car
batteries for the UK’s car industry?
The (Con)
I thank my noble friend for the points he made and appreciate his
relationship with those key African states. In the challenges we
face with EV manufacturing, any form of help can be only welcomed
and supported. I would very much like to meet him and see what
can be done.
(LD)
My Lords, is the Minister confident that batteries for electric
cars will be produced at the site north of Blyth which was
earlier identified for that purpose? If so, when?
The (Con)
My Lords, I cannot give a direct answer. I will write to the
noble Lord later, but I assure him that the Government are
absolutely on it. I completely understand that the whole question
of batteries and trying to resolve this country of origin issue
is fundamental to the future of automotive manufacturing in this
country.
(LD)
My Lords, the USA is now pouring trillions of dollars into green
investment and the EU is rapidly following suit. Germany alone is
investing far more than we are. What changes will there be to UK
government policy to ensure that, now we stand alone as a
manufacturing nation, we can compete on this advancing front
where it is so important that we make our mark early?
The (Con)
The money that has already been allocated is fundamental to the
future. Through the APC, we have invested in 188 collaborative
zero-emission, low-carbon R&D projects to the tune of about
£1.4 billion. That is a clear indication of our level of
commitment. I see no reason why that should not continue.
(GP)
My Lords, the noble Lord opposite referred to the raw materials
necessary for electric car batteries. Will the Minister
acknowledge the concerns about the environmental and labour
conditions under which such materials are sourced? Will the
Government pay very close attention to this?
The (Con)
Not just the Government but the manufacturing companies take this
very seriously. Everybody appreciates that these rare materials
are finite; it is right at the front of our thinking.
(LD)
My Lords, the news from Vauxhall should not have surprised
anybody. These Benches have been warning about these problems for
the last five years, ever since we launched this Brexit shambles.
How can we have any confidence that the Government are now
addressing this issue when they have ignored it for the last five
years? Why would anybody in the international motor industry
invest in this country while there is complete uncertainty over
what the Government will do?
The (Con)
A number of automotive businesses are investing in this country
and will continue to do so. They realise the opportunity: we have
a very good workforce and we are extremely good at R&D. I can
see no reason why we should not continue to play an important
role.
(Lab)
My Lords, during the passage of the Bill we have just dealt with,
there was a move at an earlier stage to make sure that the
European standards for vehicles—on emissions, parts and
safety—were not revoked, just like that, by the Bill. The
Government refused to do that, and yet none of the investors we
are trying to attract are British-owned and most of them have big
investments in Europe. For us to depart from our vehicle
standards by anything significant would be destroying any ability
of the industry in this country to compete. Will the Minister
indicate that we will keep in line, broadly speaking at least,
with European vehicle standards?
The (Con)
Virtually all vehicle manufacture is integrated throughout a
number of different countries, and I can see no reason why we
would not continue to follow the route that we have done in the
past, and that of course involves our relationship with the EU. I
know that the Secretary of State has been in close contact on
this very matter.
(LD)
The Minister raised the international supply chain. I apologise
if I tell him something he already knows, but the electrification
of motor vehicles is a completely new industry. It is not
changing a factory that currently exists; it is building a new
factory. It is creating an entirely new supply chain. The reason
you got urgent cries from these Benches is that unless that
happens now, it will never happen. Now is the moment that it has
to happen. My noble friend mentioned huge public subsidy. That is
what this country has to compete against. Does the Minister
understand why this is urgent?
The (Con)
I certainly do, and the Government do as well. The automotive
industry in this country employs well over half a million people
and is fundamental to the success of the country. There is no
doubt that some of the brands we have operating in this country
are global, future brands, and the Government are fully behind
them.
