Car Production: Solihull

Debate between Andrew Mitchell and Julian Knight

Wednesday 16th January 2019 Commons Chamber

[Julian Knight]

I thank the hon. Gentleman for his intervention. I wonder whether he has seen my speech, because I am just about to mention Jaguar Land Rover’s successes, which are manifest. I mentioned employment at the start of my speech, and the reality is that we have gone back to the situation that we were in in 2016.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

I congratulate my hon. Friend on securing this important debate. I have a feeling that I know what he is going to say, and he will have huge and strong support from my constituents in the royal town of Sutton Coldfield due to Jaguar Land Rover’s critical importance in our region.

[Julian Knight]

I thank my right hon. Friend for his intervention. I know for a fact that many people who work at Jaguar Land Rover live in his constituency, and the royal town of Sutton Coldfield is a close partner with Solihull in many respects, so I welcome his comment.

JLR faces serious challenges, but it is important not to allow them to eclipse what is still an encouraging picture overall. In 2010, it employed just 12,000 people in the UK. However, even after the latest reductions, it will still employ over 38,000 workers across the country, including 10,000 in Solihull—a more than threefold increase nationwide. The past eight years have also seen substantial revenue growth, from £6 billion a year to £25 billion a year—a more than fourfold increase. Over the past five years, JLR has invested some £80 billion in the UK, which is basically the same as the defence and education budgets put together. It is an enormous investment, and a further round of investment was announced alongside the job news last week.

Overall, the UK continues to enjoy the most productive automotive manufacturing sector in Europe, and productivity remains about 50% higher than the British manufacturing average. In short, Solihull remains a great place for British manufacturers and exporters, and I will do everything I can to help them succeed as part of the new Jaguar Land Rover development partnership, to which I will return later.

We must ensure that the details of this important issue are not confused or obscured. There is no doubt that our relationship with the European Union is a matter of serious concern to JLR and every other manufacturer that depends on international just-in-time supply chains, but JLR’s management has been clear that the driving forces behind the current reductions are twofold: a serious fall in demand in China and a slump in demand for diesel cars in the aftermath of the Volkswagen emissions scandal. Exposure to downturns in foreign markets is part and parcel of being an exporter, but the second reason—the fallout from the VW emissions scandal—is a problem made in Wolfsburg that is threatening jobs and investment in the UK.

For years, Governments of both parties encouraged Britons to buy diesel and, by extension, encouraged British car makers to service that need. According to Professor David Bailey, more than 90% of JLR’s domestic sales are diesels. But after Volkswagen was found to have been fiddling its emissions scores, we suddenly saw a scramble to be seen to crack down on diesel, which has had predictable results. Jaguar sales are down 26% so far this year, and that pattern has been repeated across the UK car industry, where overall diesel registrations have plunged by a third since January to March 2017.

Respected economists from the Centre for Economics and Business Research have shown that such policies are hugely detrimental to the economy. Many such policies also fail to account for the huge differences between old-fashioned diesel engines and so-called cleaner diesel alternatives of the sort manufactured by Jaguar Land Rover in my constituency. Those cars are just as clean as petrol alternatives. In fact, What Car? recently named a diesel as its car of the year, saying that it combined the low CO2 for which diesels are known with lower NOx output than many petrol alternatives. What is worse—this is perverse in many respects—many people are now switching to petrol without realising that they could be buying a more polluting vehicle than the diesel that they could have bought instead, perhaps at a good discount.