UK Automotive Industry: Job Losses

Debate between Lord Harrington of Watford and Richard Burden

Tuesday 22nd May 2018 Westminster Hall

[Richard Burden]

Consumer incentives will have to be part of the package that we hope will incentivise the shift towards zero emissions. The Government have scaled back both the plug-in car grant and the grant available for the home charging of electric vehicles. Does that not send out a confused signal, if we are trying to encourage people to make that shift?

[Richard Harrington]

One of the issues is not reducing the amount of grants, but where the grants should go, which I am happy to discuss separately with the hon. Gentleman, as I need to make progress due to lack of time. There are questions: for example, should hybrid cars receive the same grant as all electric cars? I would be delighted to meet him to talk this through, formally or informally.

I want to stress the importance that the automotive industry has to us with regard to the future. My hon. Friend the Member for Chichester (Gillian Keegan), while stressing frictionless trade, mentioned Rolls-Royce in her constituency and how it might appear as a small blob on a map compared to vast production, but it is critically important to the country and the local economy. I would be happy to accept her kind invitation to visit with her.

Investment generally in the UK auto industry is important to us. The industrial strategy and landmark automotive sector deal show how the Government can work with industry at the forefront of new technologies, to ensure that we remain the destination of choice for future investment decisions. There was good news, which hon. Members have mentioned, about the Luton plant with the Vivaro vans. Toyota announced that it will build the next generation Auris in Derbyshire. Those decisions are not to be sneered at, but are important. While I accept that decisions are made over a long period, I think that 10-year decisions for any significant investments are also important, but they can be pulled. Like any decisions, a company can decide to do that at the last minute for whatever reason it wants—for example, if it is short of money or if there is uncertainty in the market or points are raised about Brexit. Although they are long-term decisions, they are not decisions until they are finally made. BMW’s investment in the electric Mini and Nissan’s investment in Sunderland mean that since 2016, this country has won every single competitive model allocation decision by major car manufacturers. That does not mean we can take it for granted.

I would like to speak for an hour on the EU exit issue. I cannot, however, due to your quite rightly ruthless chairing, Mr Bone. The Government have reached an agreement on the terms of the implementation period, but we have to plan for all scenarios. I have a lot of confidence that we will leave with a deal and that a no-deal scenario in March 2019, which I think would be disastrous for the automotive industry—I am happy for that to be on record and will defend it to anybody—is significantly less likely. I hope that it is totally unlikely. I hope that it does not happen and I believe that it will not happen. There needs to be a competitive market as part of a European-wide industry. It has been a huge success. It was Mrs Thatcher who persuaded many of the Japanese firms to invest here, because of the market that they would be involved in. Whatever hon. Members’ different views about Mrs Thatcher are, I think that they will all agree that that has been a good thing for the country.

Our vision for the UK is clear. We are seeking a comprehensive solution, which includes most of the things that the industry wants, such as vehicle standards, one series of approvals and simple, frictionless movement for parts and labour, where it is required in the industry. We are pleased that the Government are producing a White Paper, which will set out in detail the UK’s position on a future relationship. I think that it will be significant and show the exact terms of the relationship we are seeking with the EU and our preferred option for the future customs relationship, providing detail on precisely these issues, such as tariffs, rules of origin and mutual recognition, which are important to the industry.

I am happy to take up this discussion afterwards. I am meeting the hon. Member for Ellesmere Port and Neston (Justin Madders) and others later today, and I am happy to meet any hon. Member to talk in more detail about this complex issue. In conclusion, hon. Members should know how strong the automotive sector is for us. We are a strong manufacturing nation. I believe that we will be a lot stronger. I thank everyone for their attention today.