Battery Strategy (Science and Technology Committee Report)

Baroness Randerson Excerpts

Wednesday 23rd November 2022 Grand Committee

[Baroness Randerson (LD)]

My Lords, I start by congratulating the committee on its report, which is brutally clear in its conclusions. I have been fascinated by this debate. I have sat in many Grand Committee debates here but I have never come across one that has aroused such strong views across the Room.

The first sentence of this report says it all:

“The UK’s current trajectory of battery manufacture is insufficient to support the automotive industry’s transition to electric vehicles or to meet our net-zero commitment.”


The committee goes on to say—the noble Lord, Lord Liddle, has already quoted this—that it was astonished at the stark contrast between the optimism of Ministers and the concerns of the experts who came to give evidence.

These conclusions stand even more clearly a year on from the writing of the report. This Government—we are of course three Prime Ministers on from when it was produced, but they are still the same Government—never cease to disappoint. Their ambitions sound good, if rather vague, their rhetoric is florid and fanciful and their practical support for business and industry fails at every step. Only last week, the Chancellor’s answer to perceived misuse of some R&D tax credits was to cut them in half, rather than deal with the problem of fraud and tighten up procedures.

For seven years, I have been arguing for a more proactive approach from the Government to battery technology and the availability of EV charging to ensure what this report calls “charging for all”. I have been very frustrated by the lack of progress. We do not even yet have the simplicity of a proper, straightforward payment system. The Government’s response to this report is disturbingly vague and avoids many of the precise questions the report posed. They continue to fall into the trap of being unrealistically upbeat.

The SMMT—the Society of Motor Manufacturers and Traders—is clear that the UK must expand its domestic battery production to retain domestic auto manufacturing in the long term. It estimates that the UK needs at least eight gigafactories by 2040, with approximately 120-gigawatt capacity. Currently there is a capacity of only 2 to 2.5 gigawatts, and only two companies: Envision and the proposed Britishvolt factory. Together, if they fulfil their ambitions, those two might produce 40 gigawatts by 2030—but 120 are needed.

If that were to be achieved, the prizes would be great. EV transition alone will be worth £12 billion to the economy in terms of batteries for the UK supply chain. The EV market is developing rapidly; there were 53,000 UK-manufactured vehicles this year, almost 80% of which were exported. One-quarter of all our vehicle exports are EVs. However, we face huge challenges. Rules of origin under the TCA will apply from 2027, but some related issues apply from 2024 and will make life very difficult for the industry.

We also need a major reskilling of the workforce and training of new workers. The recent Budget produced nothing for further education. We need a national skills strategy; for example, we need about 10,000 qualified workers to manufacture battery cells, but we have almost no such qualified workers at the moment. The report points out that government support, for example via the Faraday battery challenge, has been lower and of shorter duration than that of our competitors. The Faraday Institution receives £30 million per annum, compared with the European Commission’s €3.2 billion aimed at seven member states up to 2031. That is £270 million per annum for 10 years. In France, there is an investment of €960 million and in Germany an investment of €1.25 billion. They dwarf the UK in their ambition and commitment.

The truth is that, by leaving the EU, we have cut ourselves off from the benefits of scale in research and development. The Government now face a stark choice. They need either to massively up the scale of their commitment to R&D to greatly outspend our competitors or to tone down their rhetoric and modify their ambitions. They might even consider a Swiss-style trade agreement.