UK Car Production Since 2016

Debate between Lord Johnson of Lainston and Lord Hain

Tuesday 14th March 2023 Lords Chamber

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

My apologies; I was waiting outside.

The Government are focused on transitioning our car industry from internal combustion engines to electric and other sustainably powered vehicles. Shortages of semiconductors and supply chain disruption have been key factors affecting recent UK and global car production numbers. However, the Government are accelerating and positioning ourselves for growth in electrification and unlocking industry investment.

[Lord Hain (Lab)]

I give a warm welcome to the Minister.

--- Later in debate ---

[Lord Hain (Lab)]

I also appeal to Ministers to be more open. My question asked about car production. Car production in the UK has collapsed by over half since 2016—the worst performance of any car producer in Europe. Even the soaring demand for electrical vehicles is likely to be affected when, under the trade and co-operation agreement with the EU, car industry rules of origin exemptions for EVs come to an end this coming December. Brexit has created nothing but uncertainty, extra costs and supply chain problems for business. What incentives have the Government provided for international investors in the car industry to come to this country at a time when the major trading blocs, from which we are now excluded, are becoming more protectionist?

[Lord Johnson of Lainston (Con)]

I sincerely thank the noble Lord for raising this point. It is important that we have a strong car industry in this country, and there are some legitimate reasons why the industry is transitioning. As many noble Lords who have been involved in this industry will know, we are moving from internal combustion engines to electric vehicles, which means some lines end and it takes time to start new lines. I am also very aware of the rules of origin issue, and I sincerely hope that our new relationship with Europe will allow us to have a more constructive conversation around that. It is in no one’s interest to have a trade war on cars.

I will finish by saying that there have been some great announcements over the last few years, and the Government have been extremely influential and relevant in supporting companies such as Nissan and Envision, with investment in the Vauxhall plant at Ellesmere Port and support for Pensana’s factory near Hull. Ford has committed just under £0.25 billion of investment in Halewood, and in 2022, Bentley announced a £2.5 billion investment to produce its first battery electrical vehicles by 2026, which will secure 4,000 jobs at its Crewe plant. There is certainly more that we can do, but we are acting, and we are trying to transition our car industry into one that is sustainable for the future.