Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op) (Urgent
Question): To ask the Secretary of State for Business, Energy and
Industrial Strategy if he will make a statement on the UK’s
gigafactory capacity given the announcement of Britishvolt entering
into administration. The Minister for Energy and Climate (Graham
Stuart) Britishvolt entering into administration is a regrettable
situation, and our thoughts are with the company’s employees and
their families...Request free trial
(Stalybridge and Hyde)
(Lab/Co-op)
(Urgent Question): To ask the Secretary of State for Business,
Energy and Industrial Strategy if he will make a statement on the
UK’s gigafactory capacity given the announcement of Britishvolt
entering into administration.
The Minister for Energy and Climate ()
Britishvolt entering into administration is a regrettable
situation, and our thoughts are with the company’s employees and
their families at this time. The Government are entirely
committed to the future of the automotive industry and promoting
EV capability. As part of our efforts to see British companies
succeed in the industry, we offered significant support to
Britishvolt through the automotive transformation fund on the
condition that key milestones, including private sector
investment commitments, were met. Unfortunately, the company was
unable to meet these conditions and as a result no ATF funds were
paid out. Throughout the process, we have always remained hopeful
that Britishvolt would find a suitable investor and we are
disappointed that this has not been possible. We want to ensure
the best outcome for the site, and we will work closely with the
local authority and potential investors to achieve this.
The automotive industry is a vital part of the UK economy, and it
is integral to delivering on levelling up, net zero and advancing
global Britain. We will continue to take steps to champion the UK
as the best location in the world for automotive manufacturing as
we transition to electric and zero-emission vehicles.
Despite what the party opposite may claim, we are not giving up
on the automotive industry: on the contrary, our ambition to
scale up the electric vehicle industry on our shores is greater
than ever. We are leveraging investment from industry by
providing Government support for new plants and upgrades to
ensure that the UK automotive industry thrives into the future.
Companies continue to show confidence in the UK, announcing major
investments across the country including: £1 billion from Nissan
and Envision to create an EV manufacturing hub in Sunderland;
£100 million from Stellantis for its site in Ellesmere Port; and
£380 million from Ford to make Halewood its first EV components
site in Europe. And we will continue to work through our
automotive transformation fund to build a globally competitive
electric vehicle supply chain in the UK, boosting home-grown EV
battery production, levelling up and advancing towards a greener
future.
When the Britishvolt site was first announced in 2019, with the
promise to deliver the UK’s second ever gigafactory and create
8,000 jobs in Northumberland, it was lauded by the Government as
their flagship example of levelling up: the right hon. Member for
Spelthorne (), then Business Secretary,
said that Britishvolt is
“exactly what levelling up looks like”,
and Government Ministers fell all over themselves to take the
credit, so now they must also accept accountability for its
failure, because, much like their levelling up strategy, all we
have been left with is an empty space instead of what was
promised.
The collapse of Britishvolt into administration is in no
uncertain terms a disaster for the UK car industry, but what is
even more worrying is that this is a symptom of a much wider
failure. The automotive manufacturing sector currently employs
over 182,000 people, and if we are to continue to make cars in
this country we must make electric batteries in the UK. The
Faraday Institution says we need 10 factories by 2040 to sustain
our automotive sector, so even if Britishvolt was going ahead we
would still be nowhere near where we need to be. These factories
are being built in competitor countries, and that is because they
have Governments with the vision and commitment to be the partner
that private firms need to turn these factories from plans on
paper into a reality. Surely the Government must accept that we
need an industrial strategy.
Will the Minister update the House on the Government’s plans to
urgently increase UK battery-making capability? Can he tell us
when the Government first had concerns about Britishvolt’s
ability to deliver the factory, and why did these concerns not
come to light when the Department conducted its extensive due
diligence investigations into Britishvolt’s plans? What
conversations has he had with other companies to secure the site
and ensure the factory is built in Blyth? And will he now commit
to Labour’s plans to build eight new gigafactories across the UK
and expand the roll-out of charging points to support electric
vehicle manufacturing?
Wherever we look the Conservatives are failing this country,
whether in public services or our iconic industries. Unless this
Government wake up to the scale of the transition required, we
will not only risk many of the good jobs that so many of our
communities rely upon, but we will miss out on one of the
greatest economic opportunities this country has ever had.
The hon. Gentleman is right about one thing: there is a
tremendous opportunity. That is why we have the automotive
transformation fund. That is why we did thorough due diligence on
Britishvolt. It is because we set conditions around milestones
that it had to meet that not a penny of that fund was dispensed
to Britishvolt. However, I make no apology for supporting
companies that are going to be part of that opportunity. The idea
from the Labour party is that, if it were in power, it would
build these factories. That is not how the economy works. That is
why, in 2010, after 13 years of Labour Government, we saw youth
unemployment up by more than 40%. That is the truth. We saw
communities such as Blyth left behind and ignored. We saw an
economic strategy that did not work for our young people and did
not contribute to net zero in the way that it should. On the
underpinning energy system, a bit more than 7% of our electricity
came from renewables when Labour left power. Now it is more than
40%.
The net zero strategy announced £350 million for the automotive
transformation fund. That was in addition to the £500 million
announced as part of the 10-point plan. That is why we are seeing
investment. That is why we have nearly full employment. That is
why we have factories and manufacturing going ahead in a way that
would never happen under Labour.
(Wokingham) (Con)
As we are very short of commitments to assemble more EVs in the
United Kingdom, which would be needed to create battery demand,
will the Minister pause the ban on the sale of new petrol and
diesel vehicles until our EV capacity has caught up? Otherwise,
the industry will shrink too much.
I thank my right hon. Friend, whose economic insights I always
value and appreciate. However, we are committed to electric and
zero-emission vehicles and we will not stimulate investment in
those sectors by removing the mandates that drive consumer choice
and have led to such a significant change in our road transport
emissions. We are going to have even more ambitious steps.
Mr Speaker
I call the SNP spokesperson.
(Kilmarnock and Loudoun)
(SNP)
I express sympathy with all those affected by the job losses, but
this is an abject failure of the mythical levelling-up agenda.
Unfortunately, that should not come as a surprise. It has always
irritated me that the Tories claim that they are the ones to
level up communities—the very communities that they devastated in
the first place.
Just over a year ago, the former, former Prime Minister was
boasting about the construction of Britishvolt’s gigafactory. He
said that it would create 3,000 direct jobs and 5,000
supply-chain jobs, and support the production of 300,000
batteries for car production. That meant putting our faith in a
company with no pedigree, no assets except a field and no
products to deliver a £4 billion factory—and that with one owner
with a conviction for fraud. We know that the Government do not
care about paying taxes, but that is akin to awarding a ferry
contract to a company with no ferries. When did the Government do
due diligence? When did they realise that there was a problem and
what actions did they take? When will we see a coherent strategy
for battery production, EV manufacturing, the roll-out of
charging points across the UK and, importantly, hydrogen vehicle
manufacturing and green hydrogen production?
I share the hon. Gentleman’s enthusiasm for the opportunities
that come from net zero. That is why we are moving so hard on
nuclear, which of course anybody who is not a prisoner of some
ideological opposition and is genuinely committed to green energy
would support. We are supporting that across the piece. I do not
think that Conservative Members will take lessons on industrial
intervention from Scottish nationalists after their shipbuilding
enterprises in the north.
(Tunbridge Wells) (Con)
As my right hon. Friend pointed out, no cars with internal
combustion engines can be sold after 2030, so, if we do not have
battery manufacturing in this country, we risk not having car
manufacturing in it. Do the Government have a strategy, as they
did until 2019, to ensure that we manufacture batteries and cars?
In the case of Britishvolt, will they work with the
administrators, as they did when British Steel went into
administration, to find a buyer who can take it out of
administration and into production?
I thank my right hon. Friend, before whom I appeared this morning
on the subject of delivering nuclear power, for which I noticed
there were no Scottish nationalists present. He is absolutely
right about the need to have those batteries in place and, as I
have said, that is what the automotive transformation fund, among
others, is designed to do. The automotive sector generated £58.7
billion in turnover and £14 billion in GVA in 2021 and we are
committed to ensuring that it goes forward successfully. I look
forward to working with the former Secretary of State to make
sure that we do have those factories in this country, which is
absolutely vital to make sure that, on British roads, there are
zero-emission vehicles that are produced here and that jobs are
created here as a result of that.
Mr Speaker
I call the Chair of the Business, Energy and Industrial Strategy
Committee.
(Bristol North West) (Lab)
The Americans have announced significant subsidies for industry
under the Inflation Reduction Act, and the European Union is
responding by streamlining state aid rules and announcing its own
subsidies for industry in the European Union. Surely the Minister
must recognise that businesses are being attracted to the US and
the EU, away from the UK. What is he going to do about it?
The hon. Gentleman, who is himself a distinguished Chair of a
Select Committee, is right to highlight some of the pressures
from IRA in the United States and the response from the EU. We
have to ensure that we have policies in place and I look
forward—[Interruption.] In the coming weeks, we will be coming
forward with our green finance strategy and our response to the
Climate Change Committee. In hydrogen, carbon capture and so many
of these industries, the UK is world leading. We are determined
to ensure through a raft of different policies—I know his Select
Committee will be scrutinising them—that we retain that position,
which has transformed the UK from where it was in 2010, when
there was higher unemployment and so little progress on net
zero.
(Rushcliffe) (Con)
To have secure battery production, we need a secure supply of
lithium, so the Business, Energy and Industrial Strategy
Committee was very concerned to hear last year that 95% of the
world’s current supply of lithium is processed in China. Can the
Minister tell the House what the Government will be doing to
increase the resilience of the UK’s lithium supply chain both in
boosting production at home and in creating partnerships with
allies, because we cannot continue this over-reliance on
China?
As ever in this area, I know my hon. Friend’s insights on
security issues more broadly and specifically on critical
minerals are well founded. The critical minerals strategy sets
out our plans to improve the resilience of supply chains and
increase the supply by accelerating the growth of the UK’s
capabilities, as she suggested—there is a development and
investment in my own constituency, at Saltend, in critical
materials—as well as by collaborating with international partners
and enhancing international markets to make them more
responsive.
(Wansbeck) (Lab)
On the benefit of clarity and accuracy, the Britishvolt site is
in Wansbeck—my constituency. Will the Minister give my
constituency some guarantees that the jobs promised with
Britishvolt—3,000 plus a further 5,000 in the supply chain—will
not be forgotten, and can he say what support he will give to any
potential investor to continue a gigafactory project on the site
in Cambois in my constituency?
The hon. Gentleman is absolutely right that it is a fantastic
site, and we will continue to work with investors and encourage
them to go in that direction. As a champion of workers, he must
be delighted that we have seen this transformation over the last
12 or 13 years, from the high unemployment left behind, sadly, by
the Labour Government to the nearly full employment that Britain
enjoys today.
(Hitchin and Harpenden)
(Con)
The Minister has been clear today, and indeed the Prime Minister
was clear at Prime Minister’s questions earlier, about the need
for private sector investment in Britishvolt being supported by
public sector and Government investment. From the Minister and
his Department’s discussions with potential private sector
investors, could he set out what appear to be the missing
ingredients that stop them investing more in this company and in
the broader supply chain, and what is being done by him and his
Department to help fill in and provide those missing ingredients
so that we can improve the resilience of the EV supply chain as a
whole?
I thank my hon. Friend for his question. Britishvolt is in the
best position to judge what happened with its investors. We set
milestones, as I have said, for our funding, and we were prepared
to put in significant British Government support, but it was
dependent on Britishvolt fulfilling its business plan, with its
offer to investors that it would bring forward, and then we were
going to co-invest with them. That was the plan, and it is not
for me as a Government Minister to second-guess the work of that
company, or indeed others.
(Bath) (LD)
The collapse of Britishvolt is a huge blow by any measure. Owning
and running an electric vehicle will continue to be financially
out of reach for many or most UK households, and the lack of
enough EV charging infrastructure compounds the problem. I
welcome the Minister’s commitment to the mandatory phasing out of
petrol and diesel cars, but how can that successfully happen
without having a good charging infrastructure, which currently is
woefully inadequate?
I thank the hon. Lady for her question. The Government have
prioritised securing investment in battery cell gigafactories. As
Members have been right to say, this is key in anchoring the mass
manufacture of electric vehicles in the UK, safeguarding jobs and
driving emissions to net zero by 2050. On 1 July 2021, Envision
AESC announced investment in its gigafactory in Sunderland. On 18
July last year, Johnson Matthey confirmed investment in the
construction of a factory for PEM—proton exchange membrane—fuel
cell components for use in hydrogen vehicles to be located at its
existing site in Royston, Hertfordshire. We have to keep on going
with that and, as she says, build that investment and make sure
we have the policies in place to bring that investment here.
(Ludlow) (Con)
My right hon. Friend is aware that, last month, electric vehicle
sales overtook diesel and were one third of all new vehicle sales
in the month. There is demand for electric vehicles, and we need
to ensure that there is an automotive industry here making them.
We have lithium in Cornwall, and members of my Environmental
Audit Committee visited the constituency of my hon. Friend the
Member for Truro and Falmouth () and saw the lithium
mine there. We have natural assets. We have the site that the
Minister is interested in and I encourage him to visit it. We
visited Blyth and met the Britishvolt management there, who
pointed out that the interconnector that serves the site provides
electricity from Norway that is 100% fossil fuel-free. So there
is a considerable asset in that site, and I urge him to do all he
can to engage with the automotive industry to re-establish a
credible proposition.
I entirely agree with my hon. Friend on the importance of the
site, and we are absolutely committed to working with potential
investors to ensure that it is developed.
(Warwick and Leamington)
(Lab)
The Minister will know that many in the industry have never
actually taken Britishvolt as a serious proposition. The fact is
that the Advanced Propulsion Centre has forecast that we need 90
GWh to 100 GWh production by 2030; we stand at 2% to 2.5%
currently. Without UK battery manufacture, we do not have an
automotive manufacturing industry supporting 180,000 employees.
The UK is way behind France, Germany and other countries, and we
are in danger of missing out. He will know that, under rules of
origin changes, without those batteries, our products will not be
competitive. What are the Government going to do?
The hon. Gentleman is right to highlight the importance of this
and of ensuring that we get policies that put us on track for
that kind of transformative change; we are not currently on that
track. I look forward to myself and colleagues coming back to the
House to talk about that because we have to get it right. He is
right to highlight that it is an important strategic interest for
the UK.
(South Derbyshire)
(Con)
I congratulate my right hon. Friend on grasping this difficult
nettle. I have the massive Toyota factory in South Derbyshire,
and it is hugely important to us that we have these batteries
built in the UK—and preferably near me. Would my right hon.
Friend kindly agree to a meeting at which we can discuss future
international inward investment in that sector?
I am grateful to my hon. Friend and I would be delighted to have
that meeting. As I say, as part of the green finance strategy,
about which I had a cross-Whitehall ministerial meeting just this
morning, we are determined to make sure that this is the most
investable place on earth for the net zero transition and the
best place for companies to build businesses, including
gigafactories.
(East Antrim) (DUP)
The announcement today is a tragedy for those who have jobs in
this company and those who were looking forward to having jobs
there in future. It is also a hammer blow to the Government’s
levelling up policy. The support for this company seems to have
been driven more by the desire, in the words of the former Prime
Minister, to be
“at the helm of the global green industry”
than a robust economic case. Is the Minister concerned that the
company mentioned ballooning energy costs? BMW is moving its
production of the Mini to China because it can get cheap energy
there. How many more jobs will be sacrificed on the altar of a
high energy cost net zero policy?
I thank the right hon. Gentleman for his question and his
consistency, but if he looks at energy costs at the moment he
will find that it is the sky-high prices of fossil fuels that are
causing the problems. There is consensus across the House, of
which he is not quite a part, that renewables and the Government
policy of building them at scale are bringing the lowest cost
energy to the grid. The contract for difference companies are
paying hundreds of millions of pounds into subsidised bills
because under the CfD mechanism, while they were guaranteed a
figure with high prices that are driven by gas prices, they are
now contributing and lowering bills. It is precisely more
renewables and more green energy that we need in order to have a
more affordable grid for our industry and our residents.
(Broadland) (Con)
About 40% of the components of an electric vehicle are contained
within the battery. That matters because of the definition of
“British made” when we export to the European Union and
elsewhere. The Britishvolt site is a fantastic site with great
renewable electricity and it is ready to go. Will my right hon.
Friend confirm what the Government are doing to ensure that an
alternative battery manufacturer takes advantage of that great
site and creates employment locally?
My hon. Friend is absolutely right. I am working closely with the
Department for International Trade, the Minister with
responsibility for investment and others, and I am delighted to
have the Minister for Trade Policy, my right hon. Friend the
Member for Chelsea and Fulham (), here beside me. We are
absolutely determined to sell the opportunity of the site to
contribute to the wider goals we have discussed, and to ensure
local jobs and employment. The site offers a tremendous
opportunity.
(Luton South) (Lab)
Luton has long been associated with the motor manufacturing
industry at the Vauxhall plant in my constituency. Workers there
will tell you that their futures are under threat without battery
factories. Another major worry in the automotive sector is the
semiconductor supply chain. We have waited two years for the
Government’s review. Can the Minister tell us when we will
finally get it?
The hon. Lady is right to highlight the importance of
semiconductors to the automotive industry. I hope we will see
that coming out as soon as possible.
(South West Bedfordshire)
(Con)
As an unashamed enthusiast of UK electric vehicle production,
there is understandable sadness on all sides of the House that
Britishvolt is not proceeding. It was good to hear my right hon.
Friend the Minister talk about four or five significant
investments here in the UK, but I hope his Department will come
back to the House shortly to further outline the UK strategy in
this area, in particular on critical mineral supply chains—they
have already been raised—which are so key to this part of the
UK’s economic future.
My hon. Friend takes a close interest in these issues. He is
right that we need to do more and critical minerals are a part of
that. A whole series of elements need to come together, as
another hon. Friend said, to form that battery and to be the
vital component in a successful British automotive manufacturing
industry for the future.
(Hornsey and Wood Green)
(Lab)
Is it not the case that, in this crucial industry, this is just
yet another example of the lack of confidence in the UK economy?
Part of the reason for that is because there is no strategy. When
will the Government come forward with a strategy for industry, so
that external partners can have trust and build business
confidence in these sorts of proposals?
Opposition Members lose no opportunity to talk down the UK. It is
quite extraordinary, especially in the week when we have just
seen evidence come out that the UK is seen by—[Interruption.] If
the hon. Lady, instead of chuntering from a sedentary position,
were to stop her rant against the UK and its position in the
world and hear the answer, she would hear that global CEOs have
identified the UK as the third most attractive place in the world
in which to invest. If she was as committed to helping workers as
her party claims to be, then instead of talking this country down
she would be highlighting those issues, celebrating the fact that
we have nearly full employment and celebrating the fact that we
are not in the position we were in, with so many young people on
the dole, in 2010.
(Truro and Falmouth)
(Con)
I declare an interest as chair of the all-party parliamentary
group for critical minerals. As others have mentioned, it is
vital that we step up not only the domestic supply chain but
collaboration with friendly nations such as Australia, Japan, the
US, Canada and so on, to ensure that we get all the minerals we
need for our British-made battery production, starting with, but
not limited to, Cornish lithium.
I thank my hon. Friend, who is always championing her
constituency and its interests, and emphasising the fact that
yes, quite rightly, critical minerals are important, and that
working with partners and trusted allies is absolutely critical.
Colleagues in the Department for International Trade and the
Foreign, Commonwealth and Development Office are absolutely alive
to that and we use our posts around the world to make sure we
build a consensus and a common approach. We want security not
just for ourselves, but for our democratic partners too.
(Paisley and Renfrewshire
North) (SNP)
Battery production and electric vehicle roll-out counts for
nothing if the EV battery charging infrastructure is not
adequate. England still lags well behind Scotland in its charging
network. This Government have a target of 300,000 chargers by
2030. Last year, they installed just under 8,000 chargers and
that was a ramp up in installation. The Government are not going
to meet their target, are they?
The hon. Gentleman is right to highlight the importance of
charging infrastructure. We need to do more and we need to do it
faster. We are absolutely focused on delivering that.
(North West Norfolk) (Con)
My right hon. Friend rightly protected taxpayers’ money as
milestones were not met, but will he confirm to potential
investors that the £100 million is still on the table for firms
that can get the private sector investment and the orders that
Britishvolt was sadly unable to?
In the net zero strategy it was announced that there would be
£350 million of funding for the automotive transformation fund,
in addition to the £500 million announced as part of the 10-point
plan.
(Reading East) (Lab)
This is clearly deeply disappointing news, both for the workforce
and the wider UK economy. As we heard earlier, the
electrification of vehicles is slipping backwards under this
Government’s watch. Will the Minister update the House on what
action he will now take to try to improve this very worrying
situation?
In terms of vehicles on the road, as one of my hon. Friends
mentioned, we are actually seeing record sales. We are seeing
that transformation going ahead. [Interruption.] As the shadow
Secretary of State rightly says from a sedentary position, we
want to make them here—that is a shared aspiration. Today is not
good news, but I make no apology for, with conditions, making
that offer to Britishvolt because we wanted to help it. We did
thorough due diligence and we wanted it to succeed, but it was
unable to do so. If we want an enterprise economy, we will have
failures as well as successes. We cannot have some kind of
monolithic approach. We must keep going to deliver the industry
we want, so that we can have the outcomes the hon. Gentleman and
I desire.
(Scunthorpe) (Con)
Clearly, this is unwelcome and sad news. Does my right hon.
Friend agree that the Government must keep a constant eye on
ensuring that the UK remains an attractive place for new
investors and, alongside that, ensure that we retain the ability
to make other materials that are essential for net zero, such as
steel?
My hon. Friend would never miss an opportunity to promote
Scunthorpe steel, and I applaud that. That is why she is rightly
seen as a champion for her constituents, protecting their
interests. Steel, like energy, is at the heart of almost every
product and needs to be a fundamental part of our system if we
are to have a successful economy.
(North Antrim) (DUP)
I agree with the Minister that this is a most regrettable
situation. It is a blow to the automotive sector in the United
Kingdom. Battery integrity for the UK is essential if we are to
save the industry, but if we are in a race to beat China, it is a
race that we cannot win. To follow on from the question that the
hon. Member for Wansbeck () asked, is the Minister engaging in roundtable talks
with other suitors who could step into the shoes of the failed
directors and try to reinvest in and reinvigorate opportunities
in the sector? Is this also an opportunity for the Minister to
look afresh at the opportunities for hydrogen, in which we are
ahead of China?
We are engaging with the Department for International Trade—as I
hope the presence in the Chamber of my right hon. Friend the
Minister for Trade Policy indicates—to make that case to
investors. We have the green finance strategy, as I say, and our
response to the Climate Change Committee and to the judicial
review are coming up in the coming weeks, sending a real signal
of the investability of the UK in the green sectors. I know that
the hon. Gentleman, perhaps unlike the right hon. Member for East
Antrim (), is an enthusiast because he
can see the economic opportunity; if the hon. Gentleman can use
the few feet between the two of them to educate his right hon.
Friend, he will be an even greater politician than I thought he
was already.
(Gloucester) (Con)
Last month, I spoke at the launch in London of the Indo-Pacific
Net-zero Battery-materials Consortium, which brings together
British and far eastern businesses, working with the support of
the British and Indonesian Governments, to secure materials
essential for battery production, such as nickel. Some
politicians here today have talked about sprouting battery
factories in the UK as if they were mushrooms, but the reality is
that they depend on sources of materials. That is precisely what
our Government are helping to facilitate.
My hon. Friend is a shining example of how the trade envoy
programme can allow Members of this House to gain a deep
understanding of other countries, engage with their Governments,
and see in context how engagement with another country and its
industries can contribute to the success of our own, to the
mutual benefit of both countries concerned.
Mr Speaker
That completes it—apart from .
(Strangford) (DUP)
I thank the Minister very much for his answers to all those
questions and for the industrious method that he is using to try
to find a way forward. Will he outline how he intends to secure
production of batteries for the industry and secure access for
the future, as we are paying an excess because of our reliance on
foreign entities? British battery production must be supported at
all times. In my constituency of Strangford there is much
interest in battery storage, and indeed in production, if
possible. Northern Ireland wants to be a part of that. Will the
Minister outline how all regions of the United Kingdom of Great
Britain and Northern Ireland can play their part in electric
battery production?
I thank the hon. Gentleman for his—as ever—courteous question. He
is right about the importance of Northern Ireland playing its
part in the automotive industry as we move to zero-emissions
vehicles. I look forward to having the opportunity to discuss
this issue and others later this week when I visit Strangford
lough with him to hear about that particularly successful
technology.
|
