Departmental Update

Wednesday 19th July 2023 Written Statements

[The Secretary of State for Business and Trade (Kemi Badenoch)]

I am pleased to provide the House with the following updates from the Department for Business and Trade today.

Tata Group gigafactory investment

I am delighted that Tata Group, the owner of JLR, has today announced that it has chosen the UK as the site of its first gigafactory outside of India, creating thousands of jobs. This is one of the largest ever investments in the UK’s automotive sector and has been secured following in-depth engagement across Government and Tata over the last two years.

The multi-billion pound investment represents an historic moment for the UK’s growing electric vehicles industry and the new gigafactory will supply all JLR’s future battery electric models, including the Range Rover, Defender, Discovery and Jaguar brands, with the potential to also supply other car manufacturers.

The new gigafactory will create up to 4,000 highly skilled direct jobs and thousands of further jobs in the wider supply chain for battery materials and critical raw minerals, helping to grow the economy and moving the UK forward in the race to net zero.

The Government have engaged closely with Tata to demonstrate our commitment and support for this investment. The decision to build in the UK is a testament to this strong relationship and the new gigafactory secures a great future for our automotive sector, while supporting Tata’s ambitions to be a leader in zero emission vehicles.

The new gigafactory will be one of the largest in Europe and will be crucial to boosting the UK’s battery manufacturing capacity needed to support the electric vehicle industry in the long term. Initial production of 40GWh will mean it will provide almost half of the battery production that the Faraday Institution estimates the UK will need by 2030.

The location of the facility will be confirmed by Tata following the finalisation of due diligence, with battery production expected to start in 2026. When built, it will become one of the largest buildings in the UK at the size of almost 65 football pitches.

The automotive industry is a vital part of the UK economy, and it is integral to delivering on levelling up, net zero and helping to drive economic growth. The Government are committed to making the UK one of the best places in the world for automotive investment, evidenced by the automotive transformation fund, the British industry supercharger scheme and our strong programme of support for research and development.

We are working alongside industry to unlock private investment in our EV supply chain and have long-standing and comprehensive programmes of support for the automotive sector including the automotive transformation fund, the Advanced Propulsion Centre and the Faraday battery challenge. The automotive transformation fund was instrumental in securing this investment and supports the development of a high-value end-to-end electrified automotive supply chain and is enabling a UK-made transition to net zero.

The strength of the UK’s automotive R&D is also evidenced by the welcome decision by Tata that it will also create two R&D innovation hubs, one in India and one in the UK. Supported by leading academia, these hubs will focus on next-generation battery cell technologies.

The UK has a proud automotive heritage. Today’s investment is a major vote of confidence in its bright future too. I look forward to continuing to work closely with the automotive sector to ensure that we take the necessary steps to put the UK at the forefront in the transition to zero emission vehicles.

Statutory review of the Groceries Code Adjudicator

I am today publishing and laying before Parliament the report on the third statutory review of the Groceries Code Adjudicator (the GCA).

The GCA was established by the Groceries Code Adjudicator Act 2013 (the Act). Its role is to monitor and enforce the Groceries Supply Code of Practice (the code), which the UK’s designated large grocery retailers must comply with when dealing with their direct suppliers.

Section 15 of the Act requires the Government to review periodically the performance of the GCA. The first review covered the period from the creation of the GCA, in June 2013, to 31 March 2016 and the second review covered the period from 1 April 2016 to 31 March 2019.

The statutory review is not a review of the code or of the remit of the GCA. The code is a competition measure owned by the Competition and Markets Authority (CMA) as the UK’s independent competition authority.

The third review (the review) considered the effectiveness of the GCA in enforcing the code over the period 1 April 2019 to 31 March 2022. A public consultation was held from 19 July to 11 October 2022 to meet the requirements of the Act for the Secretary of State to consult those with an interest in the code. Responses to the consultation and evidence from the GCA annual supplier survey and annual reports enabled the Secretary of State to make an assessment of the performance of the GCA against the measures set out in the Act. These measures were explained in the terms of reference which are included in the report on the review and in the consultation document which was placed in the Libraries of both Houses of Parliament on 19 July 2022.

The review has found the GCA to be a highly effective regulator that made good use of its powers to take a balanced and collaborative approach that usually resolved issues before the need for an arbitration or investigation and was valued throughout the sector.

The review also found no evidence to support the need to change the permitted maximum financial penalty the adjudicator can impose following an investigation into non-compliance. It also concluded that the information which the GCA may consider when deciding whether to launch a formal investigation into non-compliance should not be restricted.

The Government took the decision not to transfer the GCA functions to the CMA or another public body but that we should explore with the GCA and the CMA ways to work together to realise efficiencies around staffing and expertise. The review also concluded that there is not any evidence to suggest that the GCA should be abolished.

The report on the third statutory review of the GCA has today been placed in the Libraries of both Houses of Parliament.

[HCWS978]