Asked by
To ask His Majesty’s Government what is their investment strategy
to support the automotive manufacturing sector in the United
Kingdom.
The Minister of State, Department for Business and Trade ( of Lainston) (Con)
Our automotive industry has a long and proud history. We are
determined to build on our heritage, and to secure international
investment in the technologies of the future to position the UK
as one of the best locations in the world to manufacture electric
vehicles. That will include aspects such as the automotive
transformation fund, our Advanced Propulsion Centre, UKRI, our
critical minerals strategy, our overall global trade strategy,
UKEF and, on top of that, the specific investment opportunities
that I, my team and colleagues from the Department for Business
and Trade are working on assiduously.
(Lab)
My Lords, in my opinion, what appears to be missing here is a
proper government strategy for the automotive sector as part of a
much wider industrial strategy. The House will be well aware that
the EU’s Green Deal industrial plan is in place, with tens of
billions of euros in manufacturing grants topped up by literally
hundreds of billions in loans to companies, while the US is
investing over $2 trillion in its advanced manufacturing, energy
and clean technology efforts. We have already fallen behind our
competitors, according to my contacts at the Society of Motor
Manufacturers and Traders, who tell me that we are at a tipping
point. Does the Minister therefore agree that what we need now is
a truly tripartite industrial strategy council, with the
Government, companies and trade unions working together, and that
it should be placed on a statutory footing—as called for only
this weekend, ironically, by Labour?
of Lainston (Con)
I am grateful to the noble Lord for his continued engagement on
this important matter, which I know he holds dear to his heart,
as do I. My department will work continually with all parties to
ensure that we have the right amount of investment in our future
industries. Please make no mistake about it: the creation of an
EV industry in this country and the importance of the automotive
sector is paramount to our long-term strategy, and to the success
and prosperity of this great nation.
(Con)
My Lords, in looking at what the Government are doing to support
the manufacturing industry, I ask: are they satisfied with the
way in which industrialists and entrepreneurs see it at the
moment? There was a call by James Dyson at the weekend, saying
that there is not sufficient liaison. If he does not feel that
the Government are on the side of industry in this country, that
is very disturbing. What are the Government doing to put this
right?
of Lainston (Con)
I am grateful to my noble friend for that comment but I do not
necessarily see those figures in the facts that I look at. Look
at the investments into life sciences, into fintech, into
start-ups and venture: we lead the world, second only to the
United States. On unicorns, which are an important measure of the
sort of R&D that Sir James Dyson is talking about, if your
Lordships took a hot-air balloon up over this great nation and
looked down, you would see herds of unicorns thundering across
our green and pleasant land, the sunlight glinting off their
horns. But if your balloon drifted over the channel to the
continent, you would see single unicorns, their ribs showing,
tethered to a stake and munching dry grass. Our brains are our
best defence, and the facts speak for themselves.
(LD)
My Lords, I remind your Lordships’ House that unicorns are
mythical beings. I will return to the point of discussion: there
is a lack of urgency and of scale. We are at a watershed; if the
investments are not made very soon, they will never be made
because they will have been made somewhere else. France is
investing about €10 billion in automotive electrification and
Germany about €7 billion. When will the Government understand the
nature of the international competition that we face and put in
place the scale and urgency that we need to get this done?
of Lainston (Con)
As I have expressed, the importance of investing in this area
remains paramount. We have the automotive transformation fund,
which is over £850 million, and the Faraday challenge. I have
listed some other important aspects that the Government are
focusing on. This has led to important investment, including into
Pensana, Jaguar Land Rover, Mahindra & Mahindra, Motherson
Group, TVS and the Hinduja Group, and a whole new range of
investments into hydrogen-powered buses, which is a great success
flag for Northern Ireland.
(Lab)
My Lords, my first car, which I loved, was a British-made MG
Midget in racing green. It is very sad that we are now at a point
where unless the UK Government develop a credible automotive
industrial strategy, Britain will soon have no automotive
industry and the memory-making cars that come with it. We have
world-class British automotive designers, internationally
renowned British engineers and a skilled and hard-working British
workforce. What plans do the Government have to utilise these
assets to improve productivity, invest in research and innovation
and ultimately transform the sector as it moves away from petrol
and diesel?
of Lainston (Con)
I am grateful to the noble Lord, , for telling us about his car
history. My first car was a Fiat Regata; I doubt that anyone in
this House has ever driven one of those, and I would not
necessarily advise it. It is important to look at some of the
other aspects of where we are investing and have been successful
in this country, and to trumpet the successes and triumphant
elements of our car industry. Formula 1 is a very good example of
that: two-thirds of the Formula 1 teams are effectively located
here and the technology is developed here. There is our luxury
car industry, where Bentley has recently announced £2.5 billion
for further investment. We lead the world in luxury cars
including, I am pleased to say, the rebirth and renewal of the
important brand of Lotus. I met those in its owning company a few
days ago and heard of their commitment to investing in this
country, because we have the expertise to do the design,
development and, ultimately, manufacture.
(CB)
My Lords, the Science and Technology Committee’s report published
in November 2022 was concerned about the UK’s capacity for
electric vehicle battery production. It now comes to pass that
Britishvolt, one of our biggest possible producers of electric
vehicle batteries, has failed. What effect will this have on our
automotive industry, as we have no other UK production of
batteries?
of Lainston (Con)
I believe that the outcome has been relatively satisfactory, with
the purchase of Britishvolt by Recharge Industries, which I have
met on several occasions to ensure that it is committed to
investing in this country. It will make non-vehicular batteries
to begin with but has reassured me that it will ultimately make
batteries that can be used in EVs. It is not true that we do not
have prospects. As we know in this House, there has been £1
billion of investment in the Sunderland plant for Envision to
allow us to make electric vehicles made by Nissan.
(Lab)
My Lords, further to the answer the Minister gave a moment ago,
when he gazes down on the country from his hot-air balloon, can
he tell us where the gigafactory for the manufacture of electric
batteries, on which the future automotive industry of this
country is going to depend, will be?
of Lainston (Con)
I have tried to cover the key areas where we are investing
significantly alongside industry to build our EV industry. We
have several important pools of capital. I have not mentioned
UKEF, which has through various loan schemes also supported our
existing and future manufacturers. On top of that, through the
Faraday challenge we are investing very heavily in R&D,
because innovation will drive the technological change that will
give us these opportunities in the future.
(Con)
Has my noble friend noticed that Honda, which has given up
manufacturing in this country, now proposes to import a low-cost
EV made in China? Many are forecasting a tidal wave of lower-cost
EVs from China as its industry expands at an amazing rate. Is our
strategy robust enough to take account of that and of the
devastating effect of the Inflation Reduction Act in America,
which is sucking a lot of investment in automotive components and
manufacture away from this country? Are we ready for these two
blows?
of Lainston (Con)
We clearly import cars and run a global economy. I would like to
raise to the House the importance of our trade deals. They will
allow us, through the new rules of origin opportunities under
CPTPP and so on, to make more cars with mixed-use components. I
congratulate our Secretary of State, who is in Switzerland today
to further this post-Brexit vision of Britain.
(PC)
My Lords, given that the future of the motor sector will be
related to electric cars, can the Minister address the
inconsistency in the rates of VAT exercised with regard to the
electricity in private households and that available at public
charging points? For those who do not have the benefit of a
private drive and the ability to charge cars by their own homes,
can the Government move towards an equalisation of these
charges?
of Lainston (Con)
My Lords, as always, I am grateful to the noble Lord for raising
important points, and this debate continues. However, we are
investing £381 million to ensure that we have the right number of
points around the country so that people can have the
infrastructure they need to run their electric vehicles and make
this vital transition to a zero-carbon future.
