UK Automotive Industry
Debate between Bill Esterson and John Redwood(1 year, 2 months ago)
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Bill Esterson (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 (Justin Madders) 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 (Jesse Norman), 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 (Mark Pawsey) 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.
Bill Esterson
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.
Britain’s Industrial Future
Debate between Bill Esterson and John Redwood(2 years ago)
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Bill Esterson
I would have hoped that, as a Conservative MP, the hon. Lady would have been talking to her own colleagues. I hope that her ministerial colleague will have heard what she said, and that she will join me in calling on him to respond to the requests of the steel industry. [Interruption.] The hon. Member for Stoke-on-Trent North (Jonathan Gullis) can sit there and heckle all day—he does quite a lot of that—but the honest truth is that we do need cross-party working to deliver for steelworkers. I am happy to support the call of the hon. Lady, as I am the calls of my colleagues who have spoken in this debate.
On the automotive sector, it must make sense for the Government to support workers at one of the most productive car plants in Europe. That is why the Government should be working with BMW at Cowley to give it assurances that they support electric car production in the UK. They should be working with the car industry to support the transition to electric vehicles, not sitting on the sidelines while our great automotive sector falls behind our European competitors. While we have one gigafactory in operation, Germany has five, with a further four in construction. France and Italy are set to have twice as many jobs in battery manufacturing as us by 2030. The precarious future of Britishvolt is incredibly worrying for the local economy, risking up to 8,000 jobs, but it also further jeopardises our gigafactory capacity as a country. As part of our plans for a national wealth fund, Labour will part-finance the creation of three new additional gigafactories by 2025, with a target of eight by 2030.
Turning to shipbuilding, a successful strategy means making and buying more ships here in Britain, such as the Fleet Solid Support Ships, rather than seeing lucrative defence contracts built abroad. It is, of course, a very important way of supporting our steel industry. Investing in sovereign defence capability is a matter of national security as well as being good for jobs, 6,000 of which are at the UK’s high quality shipyards from the Fleet Solid Support Ship contract alone.
A hallmark of each iteration of this Conservative Government has been to act in the heat of the moment and lurch from crisis to crisis. The revolving door of Ministers, the seemingly endless soap opera, the unedifying sight of Conservative MPs eating bugs in the jungle mask a much deeper problem. The Conservatives are unable to offer British industry the bedrock on which it needs to grow. They do not have an industrial strategy that can last the term of a Minister let alone the turn of the century. Whether that is ideological opposition—the mistaken belief that Government should get out of the way—or pure incompetence, it is clear that the Conservatives are failing British industry.
Bill Esterson
I suspect the right hon. Gentleman is going to tell us that it is the former.
John Redwood
I support what the shadow spokesman says about wanting more made here; I quite agree. On the gigafactories that Labour is now sponsoring, what demands would it make of those putting forward the idea? The issue is: should they not have some customers and a plan that will work. What does he want from them?
Bill Esterson
The Government really should have done their own due diligence before investing. If the German, Italian or French Governments have made those investments because they have a strategic interest in their car industries, it must make sense for us to do the same here.