The Minister for Industry and Economic Security (Ms Nusrat Ghani) I
beg to move, That this House has considered the UK automotive
industry. It was only two months ago that I was standing in front
of the House addressing a motion tabled by the Opposition on the UK
risking losing the automotive industry. That is evidently not the
case. With the Government’s lead, the UK continues to be one of the
best locations globally for the sector. Votes of confidence in
our...Request free trial
The Minister for Industry and Economic Security ( )
I beg to move,
That this House has considered the UK automotive industry.
It was only two months ago that I was standing in front of the
House addressing a motion tabled by the Opposition on the UK
risking losing the automotive industry. That is evidently not the
case. With the Government’s lead, the UK continues to be one of
the best locations globally for the sector. Votes of confidence
in our economy have been showcased by three major automotive
announcements in recent months.
The automotive industry is a vital part of the UK economy and is
integral to supporting growth by creating high value added jobs
across the country, enhancing export opportunities and helping to
deliver the Government’s overarching goal of making the UK a
global hub for innovation. In the span of just 10 weeks, the
Government secured three major announcements on automotive,
proving that the country is internationally competitive for
vehicle manufacturing. These investments will secure green, high-
quality jobs, strengthen our supply chains and boost economic
growth. I am confident that more will follow.
The UK’s competitive business environment and regulatory system,
combined with the Government’s targeted approach to support the
enhancement of the innovation ecosystem, has attracted some of
the most prestigious manufacturers to invest here. Last week, we
celebrated BMW Group’s announcement that it is investing £600
million, which will bring production of two new all-electric Mini
models to Oxford from 2026. It will enable the site to fully
transition to electric vehicle production from 2030.
As my hon. Friend the Member for North Swindon () and the hon. Member for
Oxford East () will be aware, with the
support of the Government, this investment will secure the future
of the 4,000 staff employed at the Oxford manufacturing plant and
at the body pressing facility in Swindon. BMW has been part of
the UK auto manufacturing family since 2000, and by 2030 it will
have invested more than £3 billion in our country. Our joint
success story continues throughout the transition to
electrification.
BMW’s announcement builds on last week’s good news that,
following a £100 million investment, Stellantis has started
electric van production in its Vauxhall plant in Ellesmere Port.
This transformation is also historic, as it makes the plant the
first all-electric vehicle facility in the UK and one of the
first in Europe.
(Luton South) (Lab)
The Minister and I have had many conversations on electric
vehicle production, as she knows, but in January 2024—just some
three months away—UK car and van makers, such as Vauxhall in
Luton South, are facing 10% tariffs on exports of electric
vehicles if they cannot source enough home-made batteries. That
is despite the Government having had more than two years to
prepare for the introduction of these rules of origin, which they
negotiated. The Minister is aware of this, as I have raised it
many times. With just over three months to go, can she just admit
that she is failing our motor manufacturers and is willing to
chuck them under the bus?
Ms Ghani
The hon. Lady started off appropriately by talking about how we
work collectively on this issue. The rules of origin and tariffs
were not just negotiated by us—there was another party at the
table. The tariffs, if they are implemented, will impact not only
on the UK car manufacturing sector but on manufacturers in
Europe. As there are more cars imported from Europe into the UK,
the burden will be far greater on those countries. The
negotiation took place pre-covid and before Russia’s invasion of
Ukraine. Of course, there is now a tight deadline, but
negotiations with Brussels always go to the wire.
The important thing is this: we are negotiating hard for the UK
automotive sector. Those manufacturers in Europe were also
desperately trying to negotiate hard, because this impacts them
just as much. Just as we have the Society of Motor Manufacturers
and Traders—the automotive sector’s umbrella group—campaigning,
they have groups campaigning in Europe. Just last week, there was
a huge amount of news coverage about how Europe is now incredibly
concerned about the flood of cheaper electric vehicles into its
market. The argument we are making should definitely be taken to
the EU, because the tariffs would impact car manufacturing in
mainland Europe, too.
(Birmingham, Hodge Hill)
(Lab)
The truth is that while gigafactories are now being built right
the way across Europe, we need at least eight gigafactories with
about 15 GW of capacity in the UK—including, I might say, one in
the heart of the west midlands, which is home to about a third of
UK automotive production. In the last Metro Mayor election, both
the Conservative Mayor, , and I promised that we would
get that gigafactory built; it is still a large open space. When
does the Minister anticipate those eight gigafactories being
built in the UK? When does she anticipate a gigafactory coming to
the Coventry airport site? If we fail, our automotive industry
will be hit with tariffs soon and we will put 114,000 jobs in
jeopardy.
Ms Ghani
The Tata gigafactory announcement ensures that we are
front-footed when it comes to gigafactories—it will be one of the
largest factories in Europe. The right hon. Member and the Labour
party are obsessed with us needing five or eight gigafactories,
but it is about capacity. It has been noted that we need, I
believe, 89 GW by 2030, and with both Tata and Envision we are
two thirds of the way there. That is how we need to compare with
the rest of Europe: it is not about the number of factories; it
is about the level of capacity that they provide. Even though we
have those two in place, we are not complacent and will continue
to do everything we can to secure further investment.
The right hon. Member talked about a particular site. Obviously,
that will have to go through two funds within my Department, but
we will always look at solid investment for even more gigafactory
capacity in the UK.
I am grateful for that reassurance, because this is one question
on which both the Conservative Mayor and I would be happy to come
and lobby on behalf of the west midlands. The point is that we
are told that we need 130 GW of capacity in the UK by 2040. Now,
that may be eight sites or it may be more or fewer, but the key
thing is that we cannot see a plan for the UK getting that
capacity in place, unless the Minister gets up and tell us that
there is a plan that she is about to reveal.
Ms Ghani
The right hon. Member and, of course, the Mayor for the West
Midlands lobby incredibly hard—as they should, because they have
fantastic sites for potential gigafactories—and those
negotiations will continue. I always used to say at the Dispatch
Box that we needed 100 GW of capacity, but the figure is now 89
GW. Envision and Tata provide us with a solid footing to get up
to the capacity that we need, but we will not be complacent; we
will continue our work.
As hon. Members will hear throughout my speech, over the summer
we put in place a consultation on a battery strategy. I believe
that, outside Norway, no other European country has such a
strategy. We are working to produce a strategy to ensure that we
have substantial capacity in the UK. The Tata commitment is huge,
and I will allude to that as well. I mentioned Stellantis, which
has started electric van production in its Vauxhall plant in
Ellesmere Port. That transformation is also historic, as it makes
the plant the first all-EV facility in the UK and one of the
first in Europe.
I turn to gigafactories, the favourite topic of the right hon.
Member for Birmingham, Hodge Hill (). In the summer, we also helped
to secure more than £4 billion of investment from Tata for a new
gigafactory. At 40 GW, it will be one of the largest battery
plants in Europe, equivalent to the size of almost 65 football
pitches. It will create up to 4,000 highly skilled jobs as well
as thousands of further jobs in the wider supply chain for
battery materials and critical raw minerals. Most importantly,
the investment helps to turbocharge our switch to zero-emission
vehicles by providing almost half the battery production needed
by 2030. It is not that we need 12, 15 or five; it is about the
capacity we need. Tata takes us two thirds of the way there and
Envision is on top of that.
The announcements are the most recent in a line of investment
decisions over the last couple of years. In 2021, Nissan and
Envision announced a £1 billion investment to create an EV
manufacturing hub in Sunderland. Ford joined the line-up in 2021
with a £227 million investment in Halewood to make the company’s
first EV components site in Europe, and increased its investment
in the plant to £380 million in 2022. Last year, we saw Bentley
commit more than £2.5 billion to transition its Crewe plant to
zero emission vehicles, with the first EV model to roll off the
production lines around 2025.
Jaguar Land Rover has also announced that it will invest £15
billion over five years into its industrial footprint as part of
its move towards electrification. That is great news for the west
midlands and Halewood, where Jaguar Land Rover has production
sites, research and development facilities and its headquarters.
These investment decisions are votes of confidence from a highly
productive and innovative sector, showcasing that the UK has the
best to offer when it comes to green manufacturing and new and
future technologies.
(Sedgefield) (Con)
The Minister is listing some fantastic organisations and great
businesses around the country, but their size is such that the
businesses that supply them are massive organisations in their
own right. I have Gestamp in Newton Aycliffe, a supplier of
subframes to all over the world, from Nissan in Sunderland to
Volvo China. They are huge businesses. Does the Minister
recognise the importance of the supply chain, not just the
headline businesses?
Ms Ghani
My hon. Friend is right that the supply chain is critical to
ensure that we continue to manufacture at pace. Just last week,
we “leapfrogged”—I believe that is the quote—the French to become
the eighth largest manufacturer globally, which shows how
important our supply chain is. There are kinks in the supply
chain and a lot of pressure—the Inflation Reduction Act on one
side, covid on the other—while trying to get hold of critical
minerals for the base products. I have been working with
industry, and we will publish an import strategy-supply chain
piece of work soon to make sure that we are shedding light and
doing everything we can for our advanced manufacturing
sector.
We have a strong and valued relationship with the sector,
stemming from the UK’s rich history in auto manufacturing.
(South Ribble)
(Con)
I am grateful to the Minister for sharing the litany of successes
in our proud automotive industry. I gently remind her that
automotive includes trucks, not just cars. She mentioned the
history of our production; Leyland has been making trucks since
Victorian times and has a proud history—we still see the signs.
It is now investing in making smaller electric trucks,
reconfiguring its factory and taking on apprentices. It is a huge
part of the Leyland industrial community. Can I make sure that my
hon. Friend does not forget the Leyland DAF group’s wonderful
truck heritage?
Ms Ghani
My hon. Friend is a passionate advocate for Leyland. Even if I
wanted to, I would not be able to forget the importance of
Leyland and its history, and the truck sector. I hope she will
forgive me for my reference to automotive, as we tend to bag
everything in.
The Minister is very welcome to come and visit.
Ms Ghani
I would love to. More importantly, I was recently at a site where
we saw trucks that used hydrogen, ensuring that construction
sites achieve their net zero ambitions. Leyland will not be
forgotten, due to my hon. Friend’s hard work.
Although we are not reinventing the wheel, we are witnessing the
biggest transformation this sector has gone through since the
first Ford models came off the production line. New vehicle
technologies are emerging and shaping our understanding of
mobility daily.
In the transition, the UK’s aim is to lead the future by creating
it. Our primary objective is to boost private sector investment
across the whole of the UK and create the right conditions for
all businesses to innovate, by giving them the confidence to do
so. That is why Government have created a comprehensive and
long-standing programme of support, which includes the Advanced
Propulsion Centre, the automotive transformation fund and the
Faraday battery challenge—all tangible interventions that
industry can access. We believe that, through those programmes,
we can de-risk private investment in R&D, fast-track the
commercialisation of new technologies and unlock the
industrialisation of our EV supply chains.
(Wokingham) (Con)
Would the Minister like to give us a few thoughts on what she
thinks the opportunities are for synthetic fuels, sustainable
fuels and hydrogen? How will they fit in around her battery
vision?
Ms Ghani
My right hon. Friend’s views on electric vehicles and zero
emissions are well documented. As I mentioned, a hydrogen
strategy is also in place. I have been to a number of projects
where vehicles are using hydrogen to ensure that that technology
is exploited and that there is supply and demand in the chain,
too. We are looking at sustainable alternative fuels not only in
the automotive sector but in the aviation sector, so it is not
just in that space. All alternative fuels will be
investigated.
The future of the auto sector is electric—although I know that my
right hon. Friend would like it to be much wider—automated and
connected. The UK is well placed to consolidate its position
among global R&D leaders as these technologies begin to
commercialise, creating jobs and valuable new services for our
businesses and communities. Our flagship Commercialising
Connected and Autonomous Mobility programme will bring benefits
across the UK. The Centre for Connected and Autonomous Vehicle’s
recent £66 million Commercialising CAM programme 2025 aims to
create an early commercial market that could be worth £42 billion
by 2035. This innovation will save lives, create jobs, enable
more efficient movement of people and goods, address chronic
driver shortages, and better link under-served communities to
vital services. As part of the programme, on 5 September, I was
pleased to announce £18.5 million of public grants to 13 projects
and 43 organisations across the UK to strengthen our capabilities
in the CAM supply chain. I then had first-hand experience of a
self-driving vehicle with Wayve, near King’s Cross. These
technologies are here. They are no longer something from science
fiction. Today, we can take automated bus journeys in Didcot and
Edinburgh, with more world-class automated passenger and freight
services to follow in the coming months.
In addition, through Government policies, we are enabling future
mobility in the UK. We launched the full local electric vehicle
infrastructure fund in March 2023. Following a pilot, it provides
a further £381 million over the next two financial years to
deliver tens of thousands of local charge points across England.
Furthermore, to enable long-distance journeys, the rapid charging
fund will future-proof electrical capacity at strategic locations
to prepare the network for a fully electric car and van fleet—not
just cars.
Hear, hear.
Ms Ghani
I hear my hon. Friend. With up-to-date policymaking, we ensure
that consumers and taxpayers get the best possible option of
modern auto transportation.
As recent investment decisions suggest, our message—I keep
reiterating it as co-chair of our industry-Government forum, the
Automotive Council—that the Government have the automotive
sector’s back, was heard loud and clear. In that regard, we do
not shy away from the challenges the industry has been facing:
rising costs because of Putin’s horrific war in Ukraine; supply
chains disrupted by covid aftershocks; and a fierce international
competition for green manufacturing investment, rooted in an
economic security concern, leading to countries choosing
protectionist tools and consequently threatening the hugely
important global supply chains that rely on cross-border
collaboration. Those are all serious challenges for the UK
automotive sector.
Those issues, however, are not unique to us. Countries across the
globe face similar challenges and provide different responses.
Some feel that the best way to reach pole position in the race to
secure green manufacturing is to spend incredible, eye-watering
amounts of their taxpayers’ money. We have taken a different
approach and concentrate on the best way to encourage investment
with targeted support. We have more than a chequebook to attract
companies to these shores. Our highly productive and skilled
workforce, focus on innovation and ease of doing business are key
factors in a company’s decision to base itself in the UK. We do
not need more evidence of that than the three recent
announcements I mentioned earlier.
As co-chair of the Automotive Council, I consult regularly with
representatives of auto companies and listen to their views on
how the UK can raise its international competitiveness. Our
competitive business environment and regulatory system evidently
continues to stimulate investment in the UK, but that can only
come from a fruitful exchange with industry and by addressing
concerns raised. For example, in February, we announced the
British Industry Supercharger, a range of targeted measures to
ensure electricity prices for key energy-intensive industries,
including battery manufacturing, are in line with major economies
around the world. An issue raised by many colleagues on both
sides of the House is skills. We understand automotive 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 support the auto sector through the apprenticeships levy,
with £2.7 billion in funding by the 2024-25 financial year. That
will support apprenticeships in non-levy employers, often small
and medium-sized enterprises, where the Government will continue
to pay 95% of apprentice training costs.
We also recognise the importance of a level playing field. That
is why, at spring Budget, the Chancellor launched a new capital
allowances 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
April 2023 until March 2026; the 50% first-year allowance for
expenditure by companies on new special rate, including long life
assets until 31 March 2026; and the annual investment allowance,
providing 100% first-year relief for plant and machinery
investments up to £1 million.
One issue that has already been touched on is our relationship
and tariffs with Europe. To support our industry through the
transition, we must also address any and all barriers to trade
with partners and markets all over the world. Our closest trading
partner is the EU, with whom we share not only climate goals and
a trajectory towards electrification, but deeply integrated
supply chains. Over 50% of cars manufactured in the UK and
exported are destined for EU consumers.
For those reasons, we are working closely with 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 the EU. Since signing a 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
in the UK and the EU facing tariffs on electric vehicles at a
crucial time in the transition to electrification. I and the
Government are determined to seek a solution to that shared
problem and to work with the EU to fix it for 2024.
There are, of course, proposals by Chinese battery makers to
consider investing in the UK. Can the Minister tell the House
whether, if investments are made by those Chinese firms, the cars
we make with those products will still be allowed to be exported
tariff-free and will not get caught by new tariffs because of the
amount of foreign content they might contain?
Ms Ghani
The right hon. Gentleman raises a valuable point. We need to
ensure not only that we support UK manufacturers, but that new
investors and entrants into the market are treated equitably. We
know that, because of the negotiations taking place on rules of
origin, there has been a consultation taking place in Europe on
its anxiety about the market being flooded by cheaper EVs.
Obviously, we need to allow customers to make a choice, but we
have to ensure that UK manufacturers are not dealt a blow by any
new Chinese entrants into the market. He knows my history when it
comes to dealing with China and sanctioning. That is why I have
been doing so much work not only to support our UK manufacturers,
but to ensure our supply chain is resilient. I hope that will
give him some confidence on this issue.
As I mentioned to the hon. Member for Luton South (), this will impact EU
manufacturers just as much as it impacts UK manufacturers;
because they import more into our economy, it will be a heavier
burden for them.
I thank the Minister for giving way again. On that point, given
the impact on both the UK and EU automotive sectors, can she
enlighten us any further on whether there would be any suspension
of the ratcheting up of percentages in the rules of origin and a
delay to implementation through those negotiations?
Ms Ghani
The hon. Member is asking me to comment on policy that is outside
of my jurisdiction. It is led by the Foreign, Commonwealth and
Development Office and the conversations will continue. The
important thing to note is that we have to constantly and
continually impress not on UK manufacturers, but on their sister
representatives in Europe the impact it will have on European
manufacturers as well. I think that, considering the issue will
impact not only here but in mainland Europe, it will be resolved
soon enough, while recognising that when dealing with the EU
decisions tend to be taken very late in the day.
On supply chains and critical minerals, as I emphasised recently
to the Business and Trade Committee, as part of our mission to
secure a green and innovative future in UK automotive
manufacturing, we need to ensure we develop key supply chains in
Britain for battery manufacturing and electric vehicle
production. I recognise that critical minerals are fundamental to
producing batteries and anchoring the electric vehicle supply
chain in the UK. We are accelerating our international
collaboration, including recently signing partnerships with
Canada, Australia, South Africa, Kazakhstan, Saudi Arabia, and
Zambia, with more in the works, and engagement through the
Minerals Security Partnership, the International Energy Agency
and the G7.
We celebrated the announcement of the joint venture between
British Lithium and Imerys—our UK-based lithium hub—on 29 June.
By the end of the decade, it will supply enough lithium carbonate
for 500,000 electric cars a year. We have also published
“Critical Minerals Refresh: Delivering Resilience in a Changing
Global Environment”, for which I was responsible. It highlights
the progress to date and sets out our refreshed approach to
delivering the strategy for UK businesses. As part of that
approach, I have launched an independent task and finish group to
investigate the critical mineral dependencies and vulnerabilities
across UK industry sectors—including the automotive sector—and
the opportunities for industry to promote resilience in its
supply chains.
In plain numbers, the UK automotive industry employs 166,000
people, adds over £70 billion to the UK economy, and is our
second largest exporter of goods. We are also home to more than
25 manufacturers—the role of the supply chains and small and
medium-sized enterprises was mentioned earlier—which 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. In 2022, we exported vehicles to more than 130
different countries and built more than three quarters of a
million cars, with the onward trajectory rising year on year.
I am happy to add some more of those plain numbers: three, as in
the three announcements I have made so far about recent
investments in BMW, Stellantis and Tata; four, as in more than £4
billion of investment in a new gigafactory from the Tata Group;
40, as in 40 GWh, one of the largest gigafactories in Europe to
be built in the UK—it is not about the number, but about the
capacity; 4,000, as in up to 4,000 new jobs in addition to the
existing 166,000; £600 million, as in the investment in its
Oxford plant that BMW has just announced; and two, as in the two
new fully electric Mini models being produced here in the UK. The
Government are clearly not simply securing our world-class
industry, but paving the way for the UK’s future in automotive
manufacturing.
Royal Assent
Madam Deputy Speaker ( )
Before I call the shadow Minister, I have to notify the House, in
accordance with the Royal Assent Act 1967, that His Majesty has
signified his Royal Assent to the following Acts:
Lifelong Learning (Higher Education Fee Limits) Act 2023
Northern Ireland Troubles (Legacy and Reconciliation) Act
2023
Powers of Attorney Act 2023
Northern Ireland Budget (No. 2) Act 2023
Pensions (Extension of Automatic Enrolment) Act 2023
Animals (Low-Welfare Activities Abroad) Act 2023
Workers (Predictable Terms and Conditions) Act 2023
Protection from Sex-based Harassment in Public Act 2023
Veterans Advisory and Pensions Committees Act 2023
Firearms Act 2023.
UK Automotive Industry
Debate resumed.
6.03pm
(Croydon Central) (Lab)
It is a pleasure to take part in a debate on a sector whose past,
present and future lie at the heart of British manufacturing. I
know that many of my colleagues and their constituents will
understand the vital importance of this issue; I also know that
several colleagues sadly cannot be here today because they are
attending a conference on the industry at the Queen Elizabeth II
Centre.
I am new to this brief, so, as Members would expect, I have been
speaking to people in the industry—including representatives of
the Society of Motor Manufacturers and Traders, who do an
excellent job—and I have to say that their picture of the reality
is somewhat different from the Minister’s. The Minister says that
all is well in the world, everything is booming and everything is
great. She has big numbers, and she speaks with great confidence
and enthusiasm about a sector which, of course, we all cherish
and want to build. The sector, however, is absolutely of one
voice in crying out for certainty, clarity and a plan of action,
as it has been doing for years. It provides hundreds of thousands
of highly skilled jobs across the country, it brings pride to
communities by putting them at the forefront of a world-leading
sector, and its iconic British brands showcase the best of
British innovation and craftsmanship on a global stage. It
should, and could, be booming, but for the past 13 years we have
had kid racers at the wheel. Industry is desperate for a plan,
and I have heard that loud and clear. Motorists are crying out
for direction, and jobs are at risk of being shipped
overseas.
Mrs (Birmingham, Erdington)
(Lab)
In communities such mine in Erdington, Kingstanding and Castle
Vale, the automotive industry is our lifeblood, and it is no
wonder that families are seriously worried about job decline.
Does my hon. Friend agree that we need to prioritise not only job
creation but upskilling, so that jobs can be created and
sustained locally?
My hon. Friend is doing an excellent job on behalf of her
constituents, as, of course, did her predecessor, in standing up
for the sector in many debates in this place.
The Tories risk putting British motor manufacturers under the
bus. According to analysis that I have seen, under the
Conservatives we have lost more than a third of automotive
manufacturing output since 2010, so it is little wonder that the
UK is slipping down the international league tables when it comes
to automotive manufacturing relative to GDP. It is said that
people never remember the runner-up, but they certainly do not
remember the one in 17th place. However, we know that the problem
is not unique to the automotive industry; we know that the lack
of a Government plan that people can understand, rely on and
invest in is a problem across many sectors. When I was reading
about this brief, I came across a reference to the former special
adviser to the Secretary of State for Business and Trade, who
said recently that the Government
“does not know, nor really care”
about business issues. This is someone who has worked at the
heart of Government, seeing the decision making, seeing Ministers
and seeing what happens.
Listening to the speech made earlier today by the right hon.
Member for South West Norfolk ()—the Minister may well have
heard it—was a timely reminder of the Conservatives’ relentless
economic incompetence. Last year they crashed the economy, and
this year they are on track to gift British manufacturers the
entirely avoidable introduction of 10% tariffs. Rather than
co-operating with the EU to suspend a ratcheting up of rules of
origin requirements until 2027, British and European
manufacturers are facing a cliff edge of higher export costs from
1 January. An agreement with Europe would be a win-win for
everyone. JLR, Stellantis and Vauxhall have all warned that
failure to act will see jobs shipped overseas. When will the
Conservatives heed Labour’s calls for them to deal with this
issue as a priority?
The Minister talked about some of the bright spots amid the
clouds, and of course there are some. We were pleased to see the
Government adopt Labour’s approach of using public investment to
leverage in much more private investment to prevent the
relocation of an iconic British institution to China. The loss of
the BMW Mini production plant in Oxford would have been an
historic loss for the automotive industry in Britain. Labour will
always welcome investment in Britain—we have not had enough of it
under this Government—but we need a proper industrial strategy,
giving certainty that investments of this kind can support
British jobs and industry for the long term. Instead, industry
faces that 1 January cliff edge on rules of origin, and another
on the zero-emission vehicle mandate; the Department for
Transport has still not clarified how that will be
implemented.
Industry is facing Government Back Benchers who are miring the
UK’s commitment to electric vehicles in uncertainty by talking
from the Back Benches about how we should scrap these targets.
That is adding to the uncertainty that the industry feels. If
Japan or the USA were considering investing in the UK and they
heard what the former Prime Minister, the right hon. Member for
South West Norfolk, said today about delaying our net zero
commitments and what Back Benchers have said about getting rid of
some of these targets, it would be hard for them to invest, given
that backdrop. The Government need to get a grip and make a
decision on which way they are going. Are they fixed on those
dates and on giving industry the certainty it needs, or are they
going to carry on heeding the calls from their Back Benches for
delay?
The Government’s industrial neglect has weakened Britain’s
international competitiveness to the extent that Tata was close
to building its new gigafactory in Spain. The Government might
congratulate themselves on their deal making, but in truth they
have only narrowly avoided driving the country headfirst into a
disaster. Without batteries being made here in the UK, it is
unlikely that there will be a long-term future for automotive
production in this country at all. Despite what the Minister
says, Britain remains far behind where we need to be and far
behind many of our international competitors. If Tata’s factory
makes it into operation, the UK will have 66 GW of capacity by
2030. At that point, Germany will have over 300 GW, Hungary over
200 GW and China over 6,000 GW. The Minister said that she was
working on the production of a strategy on this. I urge her to
speed up. Working on the production of something does not give
industry the certainty that it is desperately calling for.
The reality is that this Tory Government are asleep at the wheel
and taking the future of the automotive industry along for the
ride. They have no plan. They are lurching from crisis to crisis,
unable to provide industry with the long-term view it desperately
needs. They need to listen to Mike Hawes, the chief executive of
the Society of Motor Manufacturers and Traders, who has implored
that
“we just need a plan…and we need it urgently”.
He is right, but we do not just need a plan; we need Labour’s
plan to turbocharge electric vehicle manufacturing and put the
UK’s automotive industry back in the fast lane. With Labour’s
industrial strategy, industry leaders would not have to beg
Ministers for action. First, in the face of impending tariffs,
Labour would prioritise reaching an agreement with the European
Union to ensure that manufacturers had time to prepare to meet
the rules of origin requirements. We know the Tories love to talk
about Brexit, but Labour would make it work.
Secondly, a Labour Government would end the era of
sticking-plaster solutions in the automotive sector. While the
Conservatives scramble around for last-minute deals, the next
Labour Government would make the long-term investments that
industry and workers are crying out for. That is why we would
rapidly scale up battery-making capacity by part-funding
gigafactories through our green prosperity plan and end this
country’s reliance on imported batteries. Our plan would create
80,000 jobs, power 2 million electric vehicles and add £30
billion to the UK’s economy. What is more, three quarters of the
economic benefit from that strategy would be felt in the midlands
and the north. The Conservatives talk about levelling up; Labour
would deliver it.
Thirdly, we know that transitioning to electric vehicles is vital
to the UK hitting our net zero targets, but so far this year more
public electric vehicle chargers have been installed in
Westminster than in the entire north of England. Labour would
give confidence to motorists to make that switch to electric by
accelerating the roll-out of charging points with binding targets
on Government. Today’s press release from the Society of Motor
Manufacturers and Traders talks about this very point. We have to
do all we can to encourage people to make that switch, but we
cannot do that without the chargers. We have all heard stories of
people travelling from Scotland in electric cars and just not
being able to charge them because the charging stations are not
working or do not take the right payment type. That has to be
fixed, otherwise people will quite understandably not be
confident enough to make the switch.
Fourthly, Labour will make the UK a clean energy superpower.
British businesses such as automotive manufacturers are being
hammered by the highest energy costs in Europe. Our plan to make
the UK a clean energy superpower by 2030 would bring down bills,
support our vital manufacturing industries and turbocharge the
UK’s international competitiveness. With a plan like that, it is
little wonder that a supermajority of investors say that a Labour
Government would be the best election outcome for UK markets.
Labour understands that the automotive industry will flourish
only through vision, leadership and partnership. The automotive
industry is the jewel in the crown of British manufacturing. It
can and should have a bright future creating good jobs for people
across the UK. It is Labour’s industrial strategy that will bring
businesses, workers and unions together to safeguard the future
of a sector that is the pride of communities across the country.
It is Labour’s plan that the sector is crying out for, because
the industry deserves better, communities deserve better and
Britain deserves better.
6.14pm
(Wokingham) (Con)
I rise to urge the Government to be careful about rushing to
close our factories making diesel and petrol cars before we have
established the electrical revolution and are confident that we
have created the capacity and the extra jobs in the alternative
power system that the hon. Member for Croydon Central () is so passionately
recommending. I would ask the Labour Opposition, who seem even
keener to close our petrol and diesel capacity more quickly, to
consider why Germany, with a far larger automotive industry than
our own, has decided with the EU to delay the ban on the sale of
new petrol and diesel vehicles to 2035 rather than 2030, and also
why Germany thinks it needs to make provision for the possibility
that it can make cars that work on synthetic fuels or some
derivative of hydrogen as an alternative to the battery system as
a way of getting to a low carbon output. Germany might not be
wrong. I think that we will discover as a country that it is much
easier to close factories and terminate the production of petrol
and diesel cars than it is to get those much-wanted electrical
factories into operation, with all the supply chain that that
requires.
(Bath) (LD)
Is the right hon. Gentleman not making an important admission
that although the EU has delayed ending the manufacture of
combustion engines, there are important exemptions in that those
cars should be run only on synthetic fuels and sustainable
fuels?
I have said that the EU was keen to explore the synthetic fuel
opportunity. In the meantime, it is not recommending the closure
of traditional vehicle factories at pace. Indeed, the EU has
recently required of its member states that they should not only
speed up the roll-out of electrical charging points—which will
clearly be needed if people are to buy more electric cars—but
roll out the provision of hydrogen refuelling places, not
synthetic fuels. It is probably easier to deal with synthetic
fuels, because a good synthetic fuel that is liquid at normal
temperatures can be used in the usual distribution system, using
the sunk assets that already exist in the petrol and diesel
system. Indeed, one of the ways to introduce synthetic fuels more
easily would be to gradually increase the proportion of synthetic
fuel mixed into traditional fuels, as we have with E10 petrol and
as is being talked about for sustainable aviation fuels, where
there are target percentages for the introduction of lower carbon
ingredients in the fuels.
(Paisley and Renfrewshire
North) (SNP)
I am very much a supporter of synthetic fuels. I think they will
have a role to play in the years moving forward. Can the right
hon. Gentleman tell us what emissions synthetic fuels will emit
from a combustion engine compared with the current fossil fuel
equivalent?
That is to ask, “How long is a piece of string?” A variety of
these fuels are being produced in trials in small quantities.
They need to have all their characteristics explored, then people
will decide which ones give the best green output for the lowest
cost for scale-up.
The whole House needs to get better at carbon accounting. I hear
from all sides that unless we go for battery cars, we will not
meet our net zero targets. I am suggesting that there may be
other ways of getting closer to net zero targets through other
types of fuels. I also do not quite understand why so many people
in the House think that getting people to buy electric battery
cars today helps us with our net zero targets. Let us take the
example of a well-off person who decides to replace their petrol
or diesel car with an electric battery vehicle. They have enough
money to be able to afford one—they are quite expensive—and they
are also fortunate in that they have a driveway or personal
garage and can pay to have a charger put in at home. They realise
that they will always be able to get there and back for short and
medium distances without having to rely on unpredictable and
rather scarce public charging systems, so they are ready to go.
When they get home and recharge their car on the first night,
however, there is no extra renewable electricity to send to them.
We use every bit of renewable electricity every day, whether or
not the wind is blowing, because it is given priority so, when
the car is plugged in overnight, a gas power station will
probably have to up its output a little to supply the
electricity. Far from helping us to meet our net zero target,
that new electric car is probably increasing the amount of
electricity that has to be generated from fossil fuels.
I have read a number of studies that attempt to get to the truth
of how much of a contribution, or detriment, getting more people
to switch to electric cars might make to reducing world CO2, and
there are rather different answers because the calculations are
very complicated. I am more persuaded by the people who do
total-life-of-vehicle calculations. We need to recognise that
more CO2is generated in producing a typical electric car,
including the battery, than in producing a petrol or diesel car.
Mining all the metals and minerals needed for the battery and
battery production is particularly intensive, and more CO2could
be produced to deal with the waste when the battery reaches the
end of its useful life and needs to be replaced, which is an
expensive and complicated task.
To beat running a petrol or diesel car for a bit longer, a person
running an electric car would need to do a very high mileage and
would need to make sure that every unit of electricity used to
charge the vehicle is generated from zero-carbon sources. At the
moment, it is very clear that none of these requirements has been
met. Although I can understand why we need to encourage people to
go on this journey to build up the fleet of electric cars,
against the day when we generate more zero-carbon electricity, we
must accept that, in the short term, it is probably bad news for
the world’s CO2.
I am worried that we may be in danger of not achieving our main
green objective, at the same time that we are spending a lot of
money on a subsidy war with other countries that are similarly
desperate to get battery production. I am also very worried that
the UK, Europe and, to a lesser extent, the United States of
America are so behind China in putting in battery manufacturing
capability, and so behind China in doing deals with world
suppliers of critical minerals and battery components, that it
places us in a very vulnerable industrial position, which is why
both the European Union and the United Kingdom are having
difficulties ensuring enough value added in electric cars to meet
our own criteria. That is a common and shared problem, and the
solution is not easy because we need to leapfrog 10 years, or
whatever, to get to the point at which we have control over the
minerals, the raw materials and the production of batteries so we
can meet those criteria.
I am also very worried about how customers are left out of most
of these debates. They are taken for granted and, when they do
not behave in quite the way that politicians would like,
politicians invent taxes, subsidies and bans to say, “Well, we
are going to make you choose a car you would not have chosen for
yourself, because we do not think you are making the right
choices.” I would rather live in a world in which the hugely
talented motor industry, and all the skilled scientists and
technologists who help it, work away at producing cars that are
better, more affordable, safer, higher quality and meet our
service requirements so that we willingly buy the electric or
synthetic fuel alternative, rather than sticking to petrol or
diesel vehicles. We are not there yet, as we can see. The
proportion of people wanting to buy electric cars is still a
minority, despite all the very aggressive advertising, promotion
and political weight behind them. Part of that is affordability,
part of it is range, part of it is the worry about refuelling and
part of it is uncertainty about battery life and repair. There
are many complicated decisions when trying to make such a big
switch in product availability, and people have come to like
their traditional petrol or diesel vehicle. They have the measure
of those vehicles and think they provide a very good service. As
a country, we should not get too far ahead of our electorates and
consumers.
If we look at the fast growth of electric car sales, from a very
low base, we will find that it is much more concentrated in the
business fleet market than in the personal choice market, because
companies feel under more of a moral imperative to buy into this
idea, which I have just exposed as somewhat odd, that these are
super-green vehicles, whereas individuals say, “But it is not
affordable, it is not practical and it is not what I want.”
Does the right hon. Gentleman accept that the reason why fleet
purchases are now massively outstripping personal purchases is
the tax incentives given to fleet purchases, whereas the
incentives for private purchases have all but disappeared under
this Government?
The hon. Gentleman makes a very good point, and it is an
additional reinforcement, but I think fleet buyers are also very
conscious of the environmental requirements.
I stress that, for this to work, it has to be a popular
revolution. Millions of people have to decide for themselves,
having listened to the arguments and seen the products, that
green products are better than the old products, and in some
cases they very clearly are and people will rush out to buy them.
If we are still in a world in which people are not of that view,
we can subsidise, tax and lecture all we like, but people will
not change their mind.
One of the ways in which businesses and people could get around
any attempt by this Government or a future Government to ban all
sales of new petrol and diesel vehicles in 2030, when the rest of
the world is not doing so, is that people will set up businesses
to import nearly new petrol and diesel cars from places that
still sell them and make them, to sell them as second-hand cars
on the UK market. I do not believe anyone is suggesting that we
ban the sale of second-hand diesel and petrol cars, as that would
immediately remove all the value from our cars, meaning that we
are prisoners—we either run the car until it falls to pieces or
we lose its value and are unable to make the changes we would
normally make.
There will have to be a definition of what is a new car, and it
will presumably have something to do with how long ago it was
made and/or how many miles it has on the clock. Whatever the
definition, there will then be a good opportunity for people to
sell cars that are four months old, rather than three months old,
or that have 3,000 miles on the clock instead of 500 delivery
miles. There would be a nearly new market, but the cars would all
be imports, because people here would try to obey the law.
I urge all politicians to remember that they cannot just lecture,
ban, tax or subsidise people into doing things unless the product
has an underlying merit that people can see. Can we please work
with the industry to prove that underlying merit? And do not ban
things in the meantime, because Britain will lose jobs and
factories. We cannot save the electric vehicle until the electric
vehicle saves itself.
Madam Deputy Speaker ( )
I call the SNP spokesperson.
6.28pm
(Paisley and Renfrewshire
North) (SNP)
It is a pleasure to follow the right hon. Member for Wokingham
(), who made a very interesting
speech. He asked many of the right questions, and he even came up
with one or two right answers. I disagree with many of his
conclusions, but it was interesting none the less.
The right hon. Gentleman talks about the electricity that will
charge these batteries at home, in terms of renewables versus
gas, etc. Obviously, in Scotland we will have a massive excess of
renewable electricity in the coming years to power our electric
vehicles, and we have a couple of large hydrogen schemes ready to
go that will be powered by excess renewable electricity. This
will add additional baseload to the grid in Scotland.
I did agree, however, with what the right hon. Gentleman said
about a stick approach to consumers, as I do not want to see the
Government produce a large stick. I made the point in an
intervention that they have withdrawn many of the incentives to
switch to electric vehicles. I prefer a much more balanced
approach, where there is a carrot and a stick, particularly given
that the price of EVs is still higher relatively than internal
combustion engine cars. We want the switchover to electric cars
and to our decarbonised future to be open to everyone, not just
to people such as us in this Chamber, who can potentially afford
it—I speak as an EV owner.
The Minister, like the Secretary of State today at the Society of
Motor Manufacturers and Traders electrified event, which has been
mentioned, was extremely bullish about the UK automotive
industry, and recent announcements on the investments highlighted
by the Minister and the Secretary of State earlier today are
warmly welcomed. But right now they are a fig leaf to cover
deeper issues—ones largely not caused by the sector itself. The
UK automotive sector has a great many strings to its bow, but the
challenges it faces are real and immediate. They include: the
spectre of Brexit; slow and unresponsive UK Government policy,
including the complete lack of an overall industry strategy, let
alone a strategy for the sector; and an ongoing culture war
within the Conservative party about the net zero agenda.
Of course, there is also the concerning pace of the Department
for Transport’s EV charging infrastructure roll-out to consider,
which highlights the contrast between Scotland’s rapid EV
charging network and the shortcomings in England, particularly
outside London. The disastrous decision to leave the European
Union—one that was made for Scotland—has had profound
consequences for many sectors, and the automotive industry is no
exception. The intricate supply chains, just-in-time
manufacturing processes and integrated regulatory frameworks that
once underpinned our automotive sector have been disrupted,
causing uncertainty and economic turbulence. Brexit has led to
increased costs for manufacturers, who now face customs checks,
tariffs, and regulatory divergence when exporting to our European
neighbours. That has forced many manufacturers to reconsider
their operations in the UK, leading to job losses and a loss of
investment.
(Bosworth) (Con)
It is dangerous to have this doom-mongering. Triumph Motorcycles
in my constituency, for example, has seen its exports across the
world, in emerging markets such as Asia and America, go from
40,000 to 70,000 in the past three years. Is that not exactly
what we want to see from a bold UK, one that is looking outwards
and expanding across the world? Triumph, right in my
constituency, is a prime example of it.
I am grateful for the intervention and, obviously, that is a
triumph for Triumph, but it is very much the exception that
proves the rule, as I am about to go on to state. I congratulate
Triumph on its export success, but Brexit has caused immense
damage to our automotive sector, with real-world consequences for
workers and communities. Since Brexit, car production in the UK
has plummeted from about 1.7 million in 2017 to just 840,000 in
the 12 months leading up to July this year. Factories produced
just 775,014 cars during 2022, the lowest figure since 1956.
Despite the much more positive recent news on investment, which
has been mentioned, the new post-Brexit rules of origin that come
into effect in January, which place tariffs of 10% 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 EU, will be deeply
damaging. The Minister mentioned Stellantis, the world’s fourth
largest car manufacturer, which has recently warned that a
commitment to make EVs in Britain is in jeopardy unless the
Government renegotiate their Brexit deal with the EU to maintain
existing trade rules until 2027. Mike Hawes, the chief executive
of SMMT, speaking at the very same conference as the Secretary of
State, echoed similar sentiments. Of course, the dogs on the
street know that Brexit has been a disaster and they also now
know that Labour owns this Brexit every bit as much as the Tory
party. There is no mitigating, fixing or polishing Brexit, and
the sad thing is that the Leader of the Opposition and the vast
majority of those behind him also know that to be true.
To compound that issue, the UK Government’s approach to
supporting both the industry and consumers during this period of
upheaval has been less than ideal. We have witnessed unresponsive
Government policy that lacks a comprehensive strategy for the
sector’s future. The industry, a cornerstone of our economy,
deserves a clear vision and targeted support to ensure its
competitiveness and sustainability in a rapidly evolving global
landscape. The ZEV—zero emission vehicle—mandate is a case in
point, because on paper it is a good thing and it has cross-party
support, save from some Conservative Members, but it has been
bungled from start to finish. I say “finish”, but we still do not
know the final details of the policy, and how it will be enacted
or enforced, even though it is scheduled to kick in next year.
Mike Hawes said this morning that
“until we see the regulations, we can’t plan, and if we cannot
plan, we cannot deliver.”
Furthermore, the culture war within the Conservative party about
the net zero agenda is sowing seeds of confusion and inaction.
This morning, Mike Hawes had a message for the Conservatives,
dressed up in a rhetorical reference they might understand:
“With respect, and I choose my words carefully—very
carefully—where there is uncertainty may the Government bring
certainty because on decarbonisation this industry is not for
turning.”
We should all be united, not so much in quoting Margaret
Thatcher—many in this Chamber might like me to do so, but it will
not win me any votes—but in our efforts to combat climate change
and achieve net zero emissions. We are instead witnessing
political infighting that threatens to derail our progress. It is
time for the Conservative party to put aside its internal
divisions and focus on the pressing issue of climate change. One
crucial aspect of that transition is the promotion of EVs.
The Scottish Government have taken decisive steps to support
green transport, and we will continue to support the automotive
industry to phase out the need for petrol and diesel cars by
2030. The most obvious example of this is on the charging
infrastructure, particularly the rapid charging infrastructure,
which I will come back to, but Scotland has also shone on
incentives to drive switching from combustion engines to EVs.
Over the past 10 years, Scottish Government grant funding has
provided more than £165 million of interest-free loans to support
the purchase of more than 6,100 vehicles, including my own—I have
already declared that. If we look at that from a UK Government
spending perspective, we see that that is the equivalent of £1.6
billion for 61,000 vehicles. The Scottish Government have
provided nearly £5 million to support the installation of more
than 16,000 home charge points across Scotland, which is the
equivalent of nearly £50 million for 160,000 home chargers—that
is over and above the Office for Zero Emission Vehicles grant
funding from the UK Government. The Scottish Government have also
provided the equivalent of more than £100 million to deliver
15,000 charge points to businesses.
(Strangford) (DUP)
rose—
I suspect I know what the hon. Gentleman is going to say about
Northern Ireland, but I will give way to him.
The hon. Gentleman is setting out a good case for what the
Scottish National party has done in Scotland, and it is much
welcomed. In Northern Ireland, we have a real shortfall, because
electric cars are being encouraged but there are not enough
charging points. Has he taken into consideration the rural
community, who depend upon their diesel cars in my area? It is
not possible to have EV charging points in the rural community,
where it is needed, just as it is in the urban areas.
Praise for the SNP from the Democratic Unionist party might also
not feature on my leaflets in the west of Scotland, as that might
cause more problems than help. However, the hon. Gentleman makes
a good point about rural chargers, as they are certainly part of
the solution. Internal combustion engines and so on will clearly
have to be part of the mix for some time to come for those in
rural communities. That is where Scotland has taken a different
approach over the past decade and more. Scotland has a
comprehensive charging network, but the parts of it that are the
most comprehensive are in the highlands, the Western Isles and
Orkney—they are in the rural and island locations, where the
private sector would not invest and so the Scottish Government
invested to make sure that there was a charging infrastructure
for the highlands and islands. However, I fully accept the
general point he is making.
To come back to a point made in the speech by the right hon.
Member for Wokingham, Orkney has the second highest rate of EV
ownership in the UK, but that is hardly a surprise, as Orkney has
the highest number of public EV chargers per capita in the UK
outside London—this is four times the English rate outside of
London. The lesson is clear: give drivers confidence in the
charging network, combined with incentives, and people will
switch to EVs. We still have a long way to go. In Norway, 20% of
all cars on the road and 80% of all new cars are EVs. That is
where we could be; in fact, that is where we should be.
Alexander Dennis Limited is a world leader in bus manufacturing
and one of Scotland’s key manufacturers and exporters of
high-quality products around the world. Just this year, its
Enviro200AV electric fleet was used as the vehicle of choice for
the autonomous bus service across the iconic Forth Road bridge.
As diesel and petrol buses are phased out and replaced with zero
emission vehicles—at least, that should be the plan—ADL is
innovating with new electric battery technology that will
ultimately benefit the environment and transport networks.
However, that requires UK Government support and, so far, their
record on buses leaves much to be desired.
There have been 558 zero emission buses ordered in Scotland
through the Scottish Government’s ScotZEB and SULEBS—the Scottish
zero emission bus challenge fund and Scottish ultra-low emission
bus scheme—which is the equivalent of around 5,600 buses in
England. Let us bear in mind that the previous Prime Minister’s
target was 4,000 in England and that the vast majority of the
zero emission buses ordered in Scotland are actually on the road.
The figures equate to 10.1 buses per 100,000 people, compared
with just 0.94 per 100,000 delivered through equivalent schemes
in England, outside London. That is an extraordinary gulf in both
ambition and delivery.
Does the hon. Gentleman have any thoughts on how the Government
should go about replacing all the lost petrol and diesel taxes if
electric vehicles take off?
I am not sure I heard the right hon. Gentleman’s question
correctly. Would he mind repeating it?
My point is that if we achieve a big switch to electric cars, the
United Kingdom will lose a huge amount of petrol and diesel tax.
How should we replace that lost tax revenue?
That is a very astute intervention. I did not pick up that he
said the word “tax”, so apologies for asking him to repeat the
question. It is a fair point. I am a member of the Transport
Committee and we worked on a report about that a while back. The
elephant in the room is that we will have to look at something to
replace the current form of taxation. The SNP does not have a
policy on whether that is road pricing or whatever, but we have
to have that conversation and we have to have it now. We all know
that revenue at the Treasury is already an issue, and will become
an ever-increasing issue every year, so we have to have that
debate sooner rather than later. I rather suspect we will not
hear much about it before the election, but after the election
that debate will have to begin in earnest.
Of course, in an independent Scotland we would have control of
the same fiscal and tax incentives that have encouraged those
huge levels of electric vehicle uptake in countries such as
Norway. The Department for Transport’s poor record on EV charging
is a glaring obstacle on our path to decarbonisation. When
compared to some of our European counterparts, the deficiencies
in our charging network are stark. We must acknowledge that
reliable and widespread EV charging infrastructure is essential
to encourage the adoption of electric vehicles and reduce carbon
emissions from the transport sector.
Scotland’s approach to rapid EV charging infrastructure is an
example of what can be achieved. The SNP Scottish Government have
made huge strides in expanding the EV charging infrastructure,
with one hand tied behind their back. The network has grown from
55 charge points in 2013 to over 2,500 charge points in 2023. In
fact, the latest figures, published in July by the DFT, show
Scotland has 72.7 chargers per 100,000 people, which is around
40% more per head than English regions outside London, and 19.2
rapid chargers per head, which is nearly double London’s figure
of 10.7.
The lack of rapid charging infrastructure in many English
regions, and much of Northern Ireland, makes charging a postcode
lottery and hampers the transition to EVs, leaving residents
without reliable options for charging their cars That imbalance
is not only detrimental to our environmental goals, but
exacerbates regional disparities. One would think addressing
those imbalances would be a priority for a Government who have
been talking about levelling up for quite some time.
The challenges facing the industry are multifaceted and require
immediate attention and action. Brexit’s disruptive influence,
unresponsive Government policy and the internal strife within the
Tory party are hindering our efforts to tackle climate change and
transition to a sustainable future.
The Scottish Government have led the way on transport
decarbonisation, from the EV incentives and charging
infrastructure I have talked about and decarbonising our railways
at twice the pace of the UK Government, to many times more
electric buses per head, funded, bought and actually on the road,
those 21 and under travelling free on those same buses, and the
gulf—the chasm—in investment in active travel. We have shown what
we can do despite the dead hand of Westminster, so just imagine
what we can do when that hand is removed by independence.
6.44pm
(Rugby) (Con)
It is a great pleasure to take part in this debate on the UK
automotive industry because I grew up in a village just outside
the traditional heart of UK car manufacturing. One of my earliest
memories, as I walked to primary school in the mornings, is
workers returning home from the night shift at one of the many
car factories that existed in Coventry at that time.
I am very much aware of the heritage of the automobile industry
in my local area. In fact, we have two excellent local museums
that display historic British cars: Coventry Transport Museum, in
Coventry city centre, which includes Queen Mary’s 1935 Daimler
and the iconic Coventry-built 1975 Jaguar E-Type, and the British
Motor Museum, in Gaydon, where there are over 400 classic British
cars from major manufacturers such as Austin, Morris, Hillman and
Triumph.
Over my lifetime, I have seen huge change in the origin of the
cars on our roads. In my early years, they were mostly
domestically manufactured. In the 1960s, I looked out for
European cars, such as the Volkswagen Beetle, and then in the
1970s we saw the introduction of Japanese cars, such as the
reliable, small Datsuns. In recent years, the majority of cars on
our roads have been manufactured outside the UK.
However, it is two-way traffic. While the proportion of imports
has risen, so has the proportion of our exports, as the
automotive market has become international rather than national
or even continental. Now some 80% of our production is exported,
generating £77 billion in trade, as buyers across the world
recognise the kudos of UK brands such as Land Rover, Range Rover,
Jaguar and Mini. At the same time, overseas-based manufacturers,
seeing the opportunities provided by the UK’s membership of the
European single market, chose to manufacture their vehicles in
Sunderland, Derbyshire and Swindon and, more recently, there has
been investment in Ellesmere Port, Oxford and south Wales.
I have raised the issue of heritage and the impact of personal
ownership of automotives, as cars are not just another
manufactured product. For most people, a car is the second most
expensive item they will ever acquire and there are few other
items where there is such an emotive personal connection. I do
not know many people who could tell me what brand of fridge or
washing machine they or their parents owned, but almost all will
know what brand of car they drive and how they identify with it.
We need to generate the maximum impact from our iconic
brands.
There are not just emotional reasons for supporting UK
manufacture; there are hard-nosed commercial ones as well,
because automotive manufacture provides highly-paid skilled jobs.
There are 160,000 jobs in the manufacture of automobiles, which
is 0.6% of the UK total. That is even more significant in the
west midlands, where 2.2% of all employees work in automotives,
including many in my constituency of Rugby. A large number of
employees work at the London Electric Vehicle Company
at Ansty Park, in my
constituency, and at Jaguar Land Rover at Gaydon, and many more
work in the supply chain, such as at Automotive Insulations on
Central Park industrial estate in Rugby and Lenoch Engineering on
Somers Road.
In 2022, the manufacturing of vehicles and parts contributed
£13.3 billion to the UK economy—it was 0.6% of UK total
output.
When it comes to telling good news stories—it is always good to
tell them in this Chamber—Wrightbus in Ballymena would be one,
encouraged by this Government and this Minister. One thousand
jobs were created in Ballymena, with those buses being sold all
over the United Kingdom but also across the world. Therefore,
when there are good news stories to tell, let us tell them.
I agree wholeheartedly. It is great to see Wrightbus’s product on
the streets in London.
Although important and significant, the sector has seen decline,
particularly in the number of vehicles produced. We peaked at 1.5
million units in 2015; that dropped to 775,000. The Society of
Motor Manufacturers and Traders is projecting 860,000 units this
year and 1 million by 2028—still lower than the peak years, but
we generally produce higher-value cars, which is a key point to
remember. The challenge for us is to maintain our volumes as the
sector undergoes massive change. That arises from the worldwide
move to electrically powered vehicles as a consequence of the
imperative to reduce CO2 emissions.
I still sit on the Business and Trade Committee. In October 2018,
we produced a report on the sector, decarbonisation and the
introduction of electric vehicles. I had to reread that report to
remind myself that it was almost five years ago. We looked at the
opportunities that would present themselves as we effected the
transition from internal combustion engine-powered cars. Many of
the issues that we considered five years ago are still relevant,
but in other areas we have made progress. In August, almost four
in 10 new cars that were sold in the UK had some form of electric
power, with 20% being purely battery electric, 7.7% plug-in
hybrids and 6.8% hybrid, in a market that grew by 24.4% over the
previous years.
My right hon. Friend the Member for Wokingham () spoke about the role of the
consumer. Most car drivers know that electric vehicles are
coming. Most people will know someone who drives one, or who
speaks enthusiastically about it and is preparing for that
change. Most people by now have already been driven in an
electric vehicle and, often, that will be an electric London
taxi, manufactured in my constituency. On that pathway, the
London Electric Vehicle Company has a pioneering role in the
sector. In many cases, the move to electric will be championed by
the cabbie, because every cabbie who drives an electric vehicle
will speak very highly of it, compared with the diesel
alternative. However, there remain those who are not convinced by
the need to decarbonise or to move to electric vehicles as the
solution, and there will also be people who do not support the
ambition to get to net zero by 2050.
Does the hon. Member accept that there is another cohort of
people, who are in fact the majority of our constituents, who may
like to move to an electric vehicle, but simply cannot afford to
do so?
The hon. Gentleman makes a good point and I will make some
remarks on that issue in just a second.
The view about the need to support our move to net zero, and the
steps that we need to take, are very much mainstream. The
environment is still a top issue, and a rising issue among people
in the country more generally. It is in the top five when people
are asked about issues facing the world. Climate change is
consistently there above poverty, war and migration. Therefore,
there is an increasing acceptance of the need for change, but the
question is over the pace of change. Back in 2017, our date for
ending the sale of conventional petrol and diesel-powered
vehicles was 2040. In the BEIS Committee report, we called for
all new cars and vans to be truly zero emission by 2032, bringing
the target forward eight years. As a Member of Parliament with an
interest in UK auto-manufacturing and close to businesses that
were involved in it, at the time we prepared the report five
years ago, I was concerned that bringing the target forward was
too ambitious. I was really bothered that it would put our
UK-based manufacturers at a disadvantage because I believed they
would struggle to electrify the UK-manufactured heavier and
larger cars. However, it soon became clear that manufacturers
such as Jaguar Land Rover were willing to move faster, with
Jaguar very soon to become an all-electric brand. We now have the
date set at 2030.
Having set that date, and with the good news that we have had
recently of BMW’s investment in the Mini plant at Oxford, and the
manufacture of all electric products at Ellesmere Port, it is
vital that the Government stick to the 2030 date. There are
voices making the case for relaxation, but Ministers and the
Government should stand firm because what industry needs is some
certainty.
To take up the point of the hon. Member for Paisley and
Renfrewshire North (), I accept that there is a
case about the high cost of electric vehicles, compared with
those powered by an internal combustion engine. In many cases,
the new vehicle is something in the order of £10,000 more
expensive on a like-for-like basis. Interestingly, many
manufacturers— I have in mind Volkswagen—are bringing out new
models, rather than electrifying the existing model range, to
avoid a direct comparison. Of course, the higher purchase price
can be offset by lower running costs. The electricity costs less
than petrol or diesel where the price is inflated by the addition
of fuel duty. There will be lower servicing costs on the electric
vehicle as a consequence of their having fewer moving parts.
However, I accept that, for some people, the higher cost is an
obstacle.
As we have heard, some countries are further down the road in the
manufacturing of EVs, with a range of new models ready to come
into the UK. I have in mind China, which, according to many
industry watchers, has up to 10 new brands to launch in the UK by
the end of the decade. Although they will be less expensive than
UK or European-produced products, they will not be as attractive
to the consumer because they will not possess the brand and
heritage, which is a big part of the value. UK manufacturers will
have to take on this competition and, in many cases, that will
mean, as they already are, focusing on higher-quality, more
upmarket models. That means that, when we look at the performance
in the UK, it will be as important to focus on revenue derived
from sales as on units sold.
The danger is that China will try to acquire some of those brand
attributes. After all, China owns MG, does it not?
I accept that point, but Chinese manufacturers are intending to
bring to the UK a load of brands that are anonymous and bland and
they will not have the same attractiveness to the consumer.
On the incentives to acquire an electric vehicle, in recent
years, there has been a cash grant to offset the extra cost of an
EV. That now stands, I think, at £1,500 towards a vehicle costing
less than £32,000. One way the Government could make a change and
provide a reason for many private buyers to buy EVs is to level
the playing field between private buyers and company car users.
We have already heard that company drivers benefit from
favourable benefit-in-kind rates, which means that they can save
hundreds of pounds each month if they choose an EV over an
internal combustion engine. One reason that employers are keen to
encourage that is that they make savings on employers’ national
insurance contributions. That is why many of the EVs on our roads
are company cars. An increasing number of companies are also
offering salary sacrifice schemes as a method of getting staff to
switch to an EV. It would be beneficial if the parliamentary
authorities were to launch such a programme in Parliament as a
way of getting MPs and staff here to consider making the
change.
On electrical vehicle charging, in our Select Committee report,
we spent a lot of time considering charging infrastructure. We
know that, in addition to the higher capital cost, range anxiety
is a key reason drivers will not switch. Frankly, I hope the
Minister will accept that the picture here is less rosy, with
public charging in particular failing to keep pace with
increasing numbers of electric vehicles.
I got a sense of the challenges when the most recent motorway
services opened at junction 1 of the M6 at Rugby in 2021. At one
point, because of the lack of power infrastructure, it looked as
though the site would open with only two charge points. It was a
real challenge to get enough power but, fortunately, good work by
the site operator and the power network enabled 24 charge points
to be available at the opening. Thanks to additional provision
since 2021, there are now 40 charge points at junction 1 of the
M6 at Rugby. It is a great place for people to stop in the middle
of a long journey across England.
Too often, chargers are busy or are not working. I happened to
notice a letter in The Times today from a driver of an electric
vehicle, who recounts that he restricts his round trips to his
battery’s limit of 240 miles and takes public transport for
longer journeys. In fact, he questions—perhaps with tongue in
cheek—whether that is the Government’s intentional strategy.
Clearly we will not achieve the transition we need if every
electric vehicle has that issue.
I appeal to the Minister to intervene with my local authority.
Warwickshire County Council is providing public charge points but
is allowing anybody to park in front of them for as long as they
like, so someone who has identified a vacant charger via the app
may get to a site and find a diesel internal combustion
engine-powered vehicle occupying it. That seems absolutely crazy.
I ask the Minister to put pressure on local authorities to ensure
that parking in front of public EV chargers is available only to
electric vehicles, and that they move off once they have finished
charging.
A further issue for many EV drivers is that charging at a public
site has a higher cost than charging at home. I suspect most EV
drivers expect to pay more for using the facility and for
charging faster, but I do not know how many realise that they are
paying 20% VAT, compared with just 5% at home. That is why I
supported the campaign by the motoring journalist Quentin Willson
to reform VAT and equalise the charge.
We spend a lot of time talking about battery manufacture; in
fact, the Business and Trade Committee is conducting an inquiry
into it. The conventional thinking is that because a battery
represents 40% of the value and weight of an electric vehicle,
assembly will migrate close to where the batteries are
manufactured. West midlands MPs, including me, have been calling
for the development of a gigafactory at the Coventry airport
site, adjacent to the traditional heart of UK automotive
manufacture. I very much welcome the investment coming to
Somerset from Tata Sons, with 40 GW of capability, but it is well
accepted that we need 100 GW to keep business operating at the
same level. To achieve that, we will need one more gigafactory,
or maybe two. I very much hope that that will happen in the
midlands, at the Coventry airport site.
Five years on from our Select Committee report, automotive
remains an important sector and a major contributor to the UK
economy. The transition to EVs presents real opportunities for
manufacturers, the supply chain and the associated sectors. The
one thing I know from my business career is that businesses need
certainty. Having embarked on change for all the right reasons,
the Government must maintain their course and create the climate
for further growth in future years.7.03pm
(Bath) (LD)
It is a pleasure to follow the hon. Member for Rugby (). I echo him in urging the
Government to stick to the 2030 target—a point that I will make
in my speech.
The climate emergency will not go away. Surface transport is
responsible for nearly a third of the UK’s carbon emissions, and
more than half of surface transport emissions come from private
cars and taxis. The electric vehicle transition is therefore
vital. The 2030 target to end the sale of new petrol and diesel
vehicles is an important tool to bring us towards
decarbonisation. It gives the industry the certainty for which it
so often asks, and it has worked: sales of EVs in the UK are
exceeding expectations, according to Chris Stark of the Climate
Change Committee. That gives us confidence that the 2030 target
is achievable, proving all the naysayers wrong. Reports suggest,
however, that the Government have been tempted to cut the “green
crap” and that they will water down this important target. The
permanent fear that the UK Government will go back on their word
weakens our automotive industry. A tough target is better than
persistent U-turns.
We Liberal Democrats have consistently encouraged the automotive
industry to embrace the future and to transition from petrol and
diesel to electric cars. We need a Government who are equally
committed and who will not be derailed by their Back Benchers. I
am very pleased that BMW will build the new electric Mini in
Oxford; it is a significant investment that demonstrates the
economic opportunities. I am even more excited that Somerset will
host a new gigafactory for battery production. Those are
important milestones on which we must build.
We now need a longer-term strategy to truly grow the industry.
Transport & Environment UK is worried about how much of the
more than £800 million in the automotive transformation fund has
been spent. It is concerned that wider investment cannot be
maintained without expensive subsidies. Uncertainty around the
zero-emission vehicle mandate and the lack of an overall
industrial strategy add to those concerns.
The Government have a poor track record when it comes to building
electric vehicle supply chains. The collapse of Britishvolt was a
staggering blow. When he was Chancellor, the Prime Minister said
that Britishvolt
“will produce enough batteries for over 300,000 electric vehicles
each year”.
Now Britishvolt will produce none. Mistakes were made at the
company, but was there really nothing that the Government could
have done to prevent the loss of such an important business?
If we are to build an EV industry in the UK, we must ensure that
there is enough demand. The Government must support manufacturers
as global players. As we have heard, a clause in the UK
Government’s Brexit deal means that at the end of this year,
British-made EVs will face tariffs of up to 22% when exporting to
the EU if they do not contain 40% local content. That puts UK
manufacturers at a huge disadvantage. I would like to know what
the Government, rather than overblowing the perceived Brexit
benefits, are actually doing about an acute issue that is putting
the future of motor manufacturing in the UK at great risk.
Although the sales targets for commercial EVs are very
encouraging, private uptake of EVs is proving more difficult. We
have heard many of the reasons for that, but the main barrier for
potential private buyers, apart from cost, remains charging
anxiety. So far, EVs are not a realistic option for householders
who cannot park or charge their cars outside or near their homes.
In last year’s EV infrastructure strategy, the Government made no
firm commitment that infrastructure roll-out would rise in line
with EV market uptake. Recent Government statistics show that
only 19% of all chargers are rapid chargers. That is a problem
for long-distance travel: people cannot be expected to wait for
hours to charge their car when they are on the go.
We Liberal Democrats would invest urgently to speed up the
installation of rapid charging points throughout the country.
Rapid chargers must be installed where people will use them.
Motorway service stations must therefore be the No. 1 priority,
but we must consider other locations, too.
Is the hon. Lady also worried that there is a lack of cable
capacity under our streets and of grid capacity to get the power
to those fast chargers? How long will that take to resolve and
how will that be done?
I share the right hon. Gentleman’s concerns, which is why we
consistently make the case for upgrading the grid. That is one of
the most important things for getting to net zero in the UK, not
just for vehicle charging, but for the roll-out of all the
electric infrastructure we need for our many renewable energy
installations. I share his concern, but the solution is not to
stop the roll-out of electric vehicles; it is to improve the grid
and get things sped up as quickly as possible.
If, for example, electric charge points are installed in places
where non-electric vehicles park, such as in lamp posts or
bollards, valuable charging space will be lost. We Liberal
Democrats would give grants to parish and town councils to
install charging facilities where they will actually be used—for
instance, at village and community halls.
It is important that the Government do not stop the incentives
for EV uptake. They must stop penalising people who cannot charge
their EVs at home. Drivers currently pay 20% value added tax to
use a public charge point, compared with 5% VAT for home
charging. That unjustifiable discrepancy must end and the VAT
rate for all electric vehicle charges must be equalised at
5%.
Electric vehicles will drive us down the road to net zero.
Infrastructure and incentives will be vital. What we need is a
Government who are willing to fuel this transition, rather than
being content to trundle along in the slow lane.
7.11pm
(Meriden) (Con)
I refer the House to my entry in the Register of Members’
Financial Interests. I am delighted to speak in this debate,
because we cannot have a debate on this issue without
consideration of the role of the west midlands. I am honoured to
follow my hon. Friend the Member for Rugby (), who has spoken passionately
both in this debate and previously on this topic. We also cannot
have this debate without talking about the role of my
constituents in Meriden and in Solihull borough.
The automotive industry is more than just an employer in the west
midlands; it is part of our DNA. The earliest reports of a car
manufacturer stretch as far back as the late 19th century. We
have been the home of a number of household names, most recently
Jaguar Land Rover. Some of these stats have already been
mentioned, but to give context to the power of the automotive
industry in the west midlands, in 2019 we made more than £14
billion-worth of exports—double the total of any other region in
the UK and about 36% of the UK total.
The UK automotive sector employs about 160,000 people across the
country, a third of them in the west midlands. The Jaguar Land
Rover plant in Solihull borough has 9,000 employees, many of them
my constituents. The plant is responsible for some iconic cars,
including the Range Rover, the Range Rover Sport, the Discovery
and the Defender, and long may that continue.
However, like the rest of the country, the automotive sector is
in a decade of transition, and it is the transition to electric
vehicles that I want to focus on. As has been said, the one thing
that businesses hate and despise is uncertainty. It undermines
confidence, makes it impossible for them to plan and invest, and
ultimately results in lost opportunities. While I understand the
challenge of the 2030 transition, the decision has been made, and
now it is our job to support the automotive sector to achieve its
goals. I am pleased that the commitments from Government have
continued to highlight that, and we must continue to do so.
To give an example, Jaguar Land Rover has already committed £15
billion to developing new electric models, and we already know
about the £4 billion investment in the gigafactory in Somerset.
In the west midlands over the past five years production has
significantly ramped up and billions have been invested in the
region. Despite the naysayers, the doom-mongers and all those
talking down the automotive sector, the transition to fully
electric vehicles has not scared off the industry—in fact, it has
spurred it on. I also shared the concerns of my hon. Friend the
Member for Rugby when the announcement was first made, but the
opposite was true: Jaguar Land Rover has a seven-year investment
plan and is already on its way. I think it will be fully electric
in its vehicle production by 2025, way earlier than the 2030
deadline, and just last week we heard about BMW investing £600
million in Oxford to build the iconic Mini.
We have heard concerns about EV charging, but I take a different
view. I think it is for the private sector to deliver it. Just
two weeks ago, at the National Exhibition Centre in my
constituency, my right hon. Friend the Chancellor, the Mayor of
the West Midlands , and I opened the UK’s largest
EV charging network, arguably the largest in Europe. I say
arguably, because I think it is the largest in Europe, but others
argue to the contrary. Certainly it is the largest in the UK, and
it now has the capacity to charge 180 vehicles at the same time
with fast charging. If you are ever in my part of the world in
your EV, Madam Deputy Speaker, please do stop over at the
National Exhibition Centre. You will see the signs. The key thing
is that that was all driven by private sector investment.
I hear what the hon. Gentleman says about private investment, but
is he not worried, as I am, about how many different apps and
different ways to charge their vehicles consumers will have to
have? How does he propose that that could be unified to make
things easier for consumers?
That is an interesting point; there was a conversation about that
on the day. There is a recognition that there will be a variety
of ways that charging can happen, and the industry itself says it
will adapt. The opening of the car charging park, which as I said
is the largest in the UK, with the industry committed to doing
much more across the country, is a prime example of how the
private sector will lead the way. The hon. Lady made a good point
that charging networks have to be in a place where the cars can
get to them, but I am confident and I have more optimism than she
does. I think they will get there through pure necessity: the
consumer will demand it and the market will supply it.
I was pleased to see my hon. Friend the new Member for Uxbridge
and South Ruislip () join us in the House. I
campaigned for him and I think the people of Uxbridge and South
Ruislip made the right decision. However, after the campaign a
parallel was drawn, wrongly in my opinion, between a deeply
damaging ultra low emission zone policy imposed by the
ideological Mayor of London, who as the Uxbridge result
demonstrates is clearly out of touch with his residents, and the
transition to EV.
As someone who is pro the EV transition, who understands that
businesses need certainty to plan and that they are already on
the way, I think we need to be able to welcome challenges from
colleagues. This is probably one of the most transformative
transitions the industry and the country—probably even the
world—are going to go through, as transformative as the
industrial revolution of the 18th and 19th centuries. We owe it
to our constituents to ensure that, when the challenges come, we
look at them over and over again, whether on EV charging,
gigafactories or the cost of EVs themselves.
The transition has to be affordable. My right hon. Friend the
Member for Wokingham () talked about putting the
consumer at the heart of this, and he is right. We have to appeal
to more than the heart; we have to make sure that it makes
economic sense for households and hard-working families across
Britain. As people who are pro the transition, we must respect
the challenge from those who argue against it. We have a
responsibility to come up with the answers and to show leadership
in that way. The charging park that I referred to is a good
example of that, and the investment by Jaguar Land Rover is a
great example of its commitment to ensuring that EVs will be the
future, something that we will not only use in the UK, but export
across the world.
I think the debate on net zero and whether the journey to get
there is correct is happening in the wrong terms. I know the
Opposition have already spoken about their £28 billion a year net
zero package, but I note that it is not yet clear how they will
fund that. In reality, the only answer is that either they will
borrow, or they will tax hard-working families and businesses
until their pips squeak and the industry falls to its knees. It
is no wonder that they have aligned themselves with organisations
such as Just Stop Oil that want to destroy the automotive sector,
kill off jobs and ensure that their brand of socialism is the way
forward. We can see that because, of course, the Labour party has
taken a £1.5 million donation from organisations such as Just
Stop Oil.
I understand why Labour wants to write big cheques, including the
£28 billion plan: it is afraid of a market-driven approach, which
would unleash our potential and power as a nation. A free market
approach means a belief in freedom—the freedom to innovate; the
freedom of the consumer to choose the product that they want to
buy, driving up quality, which will be absolutely necessary as we
get international competitors such as the Chinese; and, of
course, freedom from the shackles of socialism. We know that that
freedom will be necessary if we are to deliver the transition to
net zero.
I welcome the debate. I am optimistic about the opportunities
presented by the automotive sector. I will always fight for my
constituents in Meriden and Solihull borough to be part of a
thriving industry that will compete globally for many decades to
come.
Madam Deputy Speaker ( )
I call the shadow Minister.
7.20pm
(Sefton Central) (Lab)
Over the last few months, I have—high vis and hard hat at the
ready—been blown away by the possibilities in our automotive
industry, but I have also felt the force of the headwinds facing
the sector, including EU rules of origin, high electricity prices
in manufacturing, the slow roll-out of EV charge points, the
shortage of gigafactory capacity, delays to the zero-emission
vehicle mandate, and, of course, the continuing fallout from the
way in which the Conservatives crashed the economy this time last
year.
The fact is that it is only through a partnership with Government
that our vehicle manufacturers can achieve lasting success in a
world where new technologies offer opportunity, and competition
from new participants such as China is more of a challenge than
ever. That is what other countries are doing—other countries that
are ahead of us in the low-carbon transport transition race.
I mentioned my recent visits. I saw the pride of the Stellantis
workers at Ellesmere Port, where they produce electric vans for
Peugeot, Citroën and Fiat, as well as for Vauxhall, and where
they want to expand production to be able to export, as they told
my hon. Friend the Member for Ellesmere Port and Neston () and me just a few weeks
ago. I saw the ingenuity on display at the Jaguar Land Rover
research and development facility at Gaydon, and JLR’s
“Reimagine” project and commitment to all electric across a
number of its brands. Then there is ULEMCo in my
constituency—please look it up—which has pioneered the use of
hydrogen as a drop-in fuel to existing internal combustion
engines to cut emissions while full hydrogen options for
combustion and fuel cells are being developed.
Those, and many more, are examples of the amazing potential in
this country. However, they are all examples in which uncertainty
must be addressed to ensure that our automotive industry can
thrive. The honest truth is that we are in danger of squandering
the advantages that we have in vehicle manufacturing. UK motor
vehicle production levels have fallen by 37% since the
Conservatives came to office in 2010—one of the largest falls in
vehicle production of any country. 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 Faraday Institute estimates
that the UK will need 200 GWh of gigafactory supply by 2040.
Other countries are on track, but we are off the pace. The news
of a gigafactory from JLR is, of course, very welcome, but it
does not address the demand from the rest of the industry.
We still have the cautionary tale of the failure at Britishvolt
as a reminder of the precarious nature of gigafactory
development. The problem of the lack of gigafactory capacity is
repeated with EV charge points: the Government target of 300,000
charge points is set to be missed by at least a decade.
Meanwhile, parking bays for vans are often inaccessible at charge
points. The UK has no equivalent to the plans in Germany for
dedicated commercial vehicle charging every 60 km to 100 km.
Speaking of commercial vehicles, where are the plans for hydrogen
refuelling for larger vehicles that will use hydrogen combustion
or fuel-cell technology?
Reliance on imports of batteries is directly linked to the
question of local content and how UK-produced vehicles will be
able to compete in export markets. From next year, a 10% tariff
will apply to cars and 22% to vans when rules of origin are
exceeded. That will, during a cost of living crisis, also push up
prices for consumers who buy imported vehicles. Stellantis wants
to expand the electric van production that it showed my hon.
Friend and me. It wants to employ more workers and export its new
pride and joy to the EU, but to do so, it needs to qualify for
local content rules, which will not be ready in time for the
looming cliff-edge in a few months’ time. Stellantis, Ford and
JLR have all called for a delay in the implementation of new
rules of origin to give them time to comply.
The Minister of State, Department for Transport, the right hon.
Member for Hereford and South Herefordshire (), who will wind up, said that
he could not comment on negotiations. Indeed, the Minister for
Industry and Economic Security, the hon. Member for Wealden (Ms
Ghani), who introduced the debate, said the same thing. But
industry is not asking Ministers for a running commentary; it is
asking them to say that their objective is to support the request
and ensure that it can continue to compete in its biggest export
market.
Then, there is the ZEV mandate. The Government said that they
would introduce the mandate by January next year. Decisions are
taken many years in advance by investors, so regulatory certainty
is critical to inform decision making. Motorists need to know
whether they should buy another petrol or diesel car, or go
hybrid or full electric. Is 2030 still the date for the end of
the new petrol and diesel car production, as the hon. Member for
Rugby () quite rightly mentioned in his
speech? I would like to hear about that from the Minister.
Companies are having to second guess the Government, as are
consumers.
The lack of a plan for ZEV, for rules of origin, for charge
points and for commercial vehicles is an example of the
indecision that characterises this Government. It does not have
to be this way. Our long-term approach, working as partners with
businesses and unions through our industrial strategy, will give
investors and consumers the certainty that they want. That is how
our competitors operate, and it is how this country needs to
work, too. Our clean energy plans and our green prosperity plan
will deliver the cheap, clean energy that will help to lower the
cost of motoring and unlock the capacity for electric vehicle
charging. Our support for hydrogen is also essential for the
transition to low carbon for road vehicles that need an
alternative to electricity. Labour’s new gigafactories will allow
the UK’s automotive industry to source components locally,
avoiding tariffs for exports to the EU by addressing the
challenge of rules of origin. And we will work with the EU on a
plan that avoids the cliff edge of the Prime Minister’s damaging
export tariffs, which, with just 100 days to go, are looming
large. We will also address the skills gap and the decline in
apprenticeship starts—a decline of 170,000 a year since 2017—in
part by moving to a growth and skills levy.
Labour’s plan will deliver precisely because we have drawn it up
in partnership with the sector.
Will the hon. Gentleman give way?
I will not, because Madam Deputy Speaker has, quite correctly,
been very strict in the time she has allocated.
Labour’s plan will lead to the creation of 80,000 jobs in our
industrial heartlands. Our plan will power 2 million electric
vehicles and add £30 billion to the UK’s economy. We will
accelerate the roll-out of charging points and give motorists the
confidence to make the switch. We will have binding targets for
electric vehicle chargers that will, like carbon budgets, be
binding on the Government. We will ensure that local areas have
the support and investment that they need.
Labour’s plans for energy generation are inextricably linked to
the transition to low-carbon road transport. Our plan to make the
UK a clean-energy superpower by 2030, with net-zero carbon
electricity, will deliver capacity and lower energy costs for UK
manufacturing. Those costs, including electricity costs, which
are 62% higher in the UK than in Germany, are a barrier to our
competitiveness. The motor industry and motorists are being let
down by this Government. They are being let down on the ZEV
mandate; on rules of origin and local content; on the slow
progress of gigafactories and EV charge points; and on energy
prices. Above all, they have been let down because of the damage
done by 13 years of Conservative mismanagement of the economy,
which culminated in last year’s disastrous mini-Budget. All of
that has led to the further let-down of high interest rates,
which are higher than in competitor countries.
The industry wants the roadblocks and the let-downs to be
removed. I will leave the last word to Mike Hawes, chief
executive of the Society of Motor Manufacturers and Traders, who
just this morning wrote about the uncertainty around the ZEV
mandate, charge points and gigafactory capacity. He said:
“A comprehensive package of measures would encourage households
across the UK to go electric now, boosting an industry slowly
recovering from the pandemic and delivering benefits for the
Exchequer, society and the global environment.”
I could not agree more. With Labour’s industrial strategy,
Labour’s green prosperity plan and Labour’s partnership with
industry, our automotive sector will be turbocharged to deliver
success.
7.31pm
The Minister of State, Department for Transport ()
What an excellent debate it has been! I have been very interested
to follow the contributions that have been made—very welcome they
are too. You may recall, Madam Deputy Speaker, that this debate
follows an urgent question that was tabled by the Labour party
some months ago regarding the state of the automotive sector, at
which Labour Members were mortified to discover that vast numbers
of investments were already under way. It is unfortunate that the
hon. Member for Sefton Central () talks about being let down.
If this country, this economy and this industry are feeling let
down, why is it that there has been this astonishing succession
of investments? That speaks not to people feeling let down, but
to confidence and investment in the future.
We celebrate BMW Group’s announcement that it will invest £600
million in the production of two all-new electric Mini models,
supporting the full transition to electric vehicle production by
2030. We welcome that, as do both Members of Parliament for
Oxford, the hon. Member for Oxford West and Abingdon () and the hon. Member for Oxford
East (). We are very pleased to
have their support, as well as that of Members across this House.
We welcome the fantastic investment that Stellantis has made in
Ellesmere Port, as has the hon. Member for Ellesmere Port and
Neston (), although he could not
avoid being gloomy about that aspect of the tremendous investment
that is taking place. That makes the plant the first all-EV
facility in the UK, and one of the first in Europe.
As we heard the determination to be gloomy from the other side of
the House, we were noticing at the same time the £4 billion-worth
of new gigafactory investment from Tata Group; Nissan and
Envision’s announcement a couple of years ago of £1 billion to
create an EV manufacturing hub in Sunderland; the £227 million
invested in Halewood; Bentley committing £2.5 billion to make the
transition to zero-emission vehicles at its Crewe plant; and
JLR’s investment of £15 billion over five years into its
industrial footprint towards electrification. If everything is as
disastrous as the Opposition suggest, how can there be this
constant succession of new private-sector investments? That is
the question. The truth of the matter is that over the past two
years, the UK’s automotive sector has been boosted by over £6
billion-worth of business investment that will drive the
transition to zero-emission vehicles, with funding for
manufacturing and crucial components as well. That investment
reflects confidence.
We know that that transition is important. Cars and vans account
for a huge proportion of domestic UK transport emissions, and it
is therefore important to address that. Over £2 billion has been
spent to support the transition, and the Government are
continuing to invest. There are now more than 1.2 million plug-in
vehicles in the UK—a 45% increase over the past year. Again, that
does not speak to decline; it speaks to rapid growth and
acceleration. Some 58% of those vehicles are battery electric
vehicles; in August 2023, 20% of new cars in the UK were battery
electric vehicles, so again, that is a sign of confidence and
growth, and rightly so. That puts the UK’s automotive industry at
the forefront of new low-carbon technology, creating thousands of
new jobs and providing certainty among manufacturers and
infrastructure investors. Some 65% of vehicle manufacturers in
the UK car market have already committed to making the transition
to zero-emission cars by 2030, and all major manufacturers have
committed to selling 100% zero-emission vehicles by 2035.
Several Members have raised the question of EV infra- structure
and charging roll-out. It is understood on all sides of this
House that the roll-out of electric vehicles needs to be
supported by a robust and widespread public charging network, and
that network continues to grow. To date, the Government and the
industry have supported the installation of over 48,000 publicly
available charging devices—again, an increase of 43% over the
past year—which includes nearly 9,000 rapid devices. My hon.
Friend the Member for Rugby () rightly highlighted service
areas, and I was delighted to hear his excellent description of
the very rapid scale-up of the motorway service area at junction
1 of the M6; that was a very interesting and important
intervention. He will know that over 96% of service areas in
England now have charging available, and there are hundreds of
chargers across the motorway service area network. Of course, a
lot of that comes through private investment. The Chancellor
recently opened the UK’s largest electric vehicle infrastructure
charging site to date in Birmingham, which includes 180 charging
devices.
My hon. Friend the Member for Meriden () and the hon. Member for Bath
() both raised the question of
standards, and rightly so. As they will know, the Government are
investing £381 million through the local electric vehicle
infrastructure fund to deliver tens of thousands of local charge
points, and the rapid charging fund will do the same thing to
future-proof electrical capacity at strategic locations.
Alongside that, we have laid consumer regulations that will
ensure that pricing information and payment methods are
simplified, that charge points are reliable and that public
charge point data is freely available, addressing many of the
issues that have rightly been raised about standards,
interconnection and transparency. The Government worked with the
national disability charity Motability and the British Standards
Institution in order to develop those standards, which has made
an important difference to their quality.
We must not think just about cars, or even just about cars and
vans, but about heavy goods vehicles as well. It is well
understood that the UK is seeking to make a transition to zero
emission in this area as well, as part of our wider ambition. To
support that, there is an HGV and infrastructure demonstrators
project that will showcase zero-emission hydrogen fuel cell and
battery electric HGV technology at scale in UK fleets, and the
Government have already tested such vehicles. Those demonstrators
build on the £20 million investment made in 2021-22. In a
slightly different context, I was absolutely delighted to welcome
the first JCB hydrogen digger, a magnificent piece of kit that is
emblematic of the innovation we have seen in the sector.
It is also important for me to mention, because we have touched
on it, the work we are doing in the area of connected and
automated mobility. Some £600 million of joint public and private
investment has been placed in that sector since 2015.
At the moment, if a new EV is added to the charging system, it
will be a gas power station that has to fire it up, so it is not
a net zero product. When will we be in a position to have enough
renewable power so that, if an electric car is added, it will be
recharged with renewable power?
An economist of my right hon. Friend’s distinction will know that
it is futile to predict the activity of private markets, because
they so often move faster than we would imagine. A classic
example of that is the way in which electrification has moved up
the range and weight curves over the past few years. It is
certainly true that at the moment, electric vehicles rely on
fossil fuels for part of their charge, meaning that they are less
green than they will be when those fossil fuels are removed from
our electrical charging system. Nevertheless, those vehicles
remain significantly lower-emission over their life cycle than
equivalent petrol and diesel vehicles, including the production
and disposal of batteries.
Capacity-building projects for important areas of our connected
and autonomous vehicle supply chain are already starting to take
place. This country remains one of the first to explore the
business case for connected and autonomous mobility as a
mass-transit solution. Connected and autonomous mobility will be
the future; it will be an electric future, a zero-emission
future, and one that is powered by the investments and leadership
being provided now, with the private sector, by this
Government.
Question put and agreed to.
Resolved,
That this House has considered the UK automotive industry.
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