UK Automotive Industry

Debate between Bill Esterson and John Redwood

Monday 18th September 2023 Commons Chamber

[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.

[John Redwood]

Will the hon. Gentleman give way?

[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

Tuesday 15th November 2022 Commons Chamber

[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.

[John Redwood (Wokingham) (Con)]

rose—

[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.

Draft Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016

Debate between Bill Esterson and John Redwood

Thursday 8th December 2016 General Committees

[Bill Esterson]

I am grateful to the Minister for her summary of the regulations. As she said, while we remain members of the EU, we continue to implement its directives. Some members of this Committee may be considering the irony of that situation, but that is where we are.

I raised the question of corporate governance because it struck me on reading the regulations and the Government’s response to the consultation that this was an opportunity to pick up on many of the points considered in the Green Paper at an early stage, including, but not exclusively, worker representation on boards. At one point the Prime Minister was very keen on having elected representatives, but we seem to have gone into reverse on that. Perhaps the Minister will correct me if I am wrong, but my understanding is that a director will now represent workers, small businesses/suppliers and customers, and presumably that director will be appointed by the board.

A number of aspects of the regulations seem worthy of further debate. If we are to make the most of the opportunities afforded by non-financial reporting, matters such as how companies deal with worker representation and their relationships with suppliers and customers will fit directly with that approach.

[John Redwood (Wokingham) (Con)]

Does the hon. Gentleman not think that this sums up the EU perfectly: no financial benefits, plenty of financial costs and we cannot do anything about it?

[Bill Esterson]

Just when we thought we had escaped the debate about the EU this morning.

There are opportunities, regardless of whether we are part of the EU. I happen to think it a very good thing for companies to report on their approach and attitude to wider stakeholders, because I think companies should behave responsibly. I hope hon. Members on both sides of the Committee agree with that. Section 172 of the Companies Act 2006 has provisions, which have never been enforced, about directors’ long-term responsibilities to have regard to employees, suppliers and customers, to the community and the environment, to standards of business conduct and the importance of the company’s reputation, and to the way they treat fellow directors and shareholders. Those matters would fit very well with duties to report non-financial matters. Do the Government intend to consider section 172 as part of this statutory instrument? What does the Minister think will be contained in the reports after it passes? We have no intention of dividing the Committee, because this instrument is a thoroughly good move, but perhaps she could tell us what she thinks will be in the reports.

The Minister mentioned gender reporting. Again, the diversity of company boards is exactly the sort of thing that should be seen in company reports, but is it also an opportunity to consider gender equality in terms of pay, or the difference between the top pay and the pay of everybody else in companies? Is it an opportunity to examine pay policy and have it clearly set out in the non-financial as well as the financial part of company reports? She mentioned that there will be omissions. Can she explain what those omissions will be and why things will be omitted, as well as whether she agrees about the areas that I would like to be included?

The Minister discussed the importance of employees. She also said that because of their security implications, cyber matters—I think that was the phrase she used—were as important in reports as financial matters. I agree, but that led me to think about electronic reporting. She can correct me if I am wrong, but I think the Government are still considering requiring small firms, which are clearly outside the scope of the legislation—[Interruption] —she is confirming that to me by nodding—to undertake significant additional bureaucratic responsibilities by reporting quarterly using digital reporting. The feedback that I get—we have discussed this before, and I am sure we will discuss it again—is that that is time-consuming and expensive for many small firms that simply do not have the resources in-house to address them. Does she consider it ironic that, although she made it clear that she did not want to extend the responsibilities in these regulations any further than necessary beyond the largest firms, when it comes to electronic reporting, she is making small firms comply with time-consuming additional responsibilities?

I mentioned the importance that I think we should attach to the wider stakeholders when it comes to the responsibility of business to society. These regulations are a move in the right direction. Non-financial reporting is extremely important, and I hope that the Minister will take on board the opportunity that the regulations present, alongside the corporate governance Green Paper, to partner with business to develop the relationships and arrangements with the wider community and society that are the hallmarks of a successful business environment and a prosperous economy and country.

Productivity

Debate between Bill Esterson and John Redwood

Wednesday 17th June 2015 Commons Chamber

[John Redwood]

I agree, but only if we have ineffective or over-the-top regulation. Removing it can give more people access to the market and provide a greater competitive challenge, but we need some regulation, because we need rules and certain guarantees in the market.

Let us take a sector that I asked the shadow Chancellor about. It was a problem that, in the Labour years, we had a long period of practically no growth in public sector productivity. I am the first to admit that the concept of productivity is more difficult in parts of the public sector. People actually like more teachers relative to the number of pupils, because they hope that that will create better teaching and a better system in classes, but it means that productivity falls. That means that we need other parts of the public sector, where the productivity issue is more straightforward or more like the private sector, to be even better, so that the overall performance of the public sector does not lag behind and cause difficulties. As we have quite a big public sector in this economy, the performance of the public sector is very important. It also happens to be the area where Ministers have most control and most direct influence, so it is the area that this House should spend more time on, because we are collectively responsible for the performance of the public sector. I think most parties now agree that we want to get more for less in the public sector, so that we can control public spending. There are disagreements about how much control we should exert on public spending, but I hope there is agreement that if it is possible to do more for less while improving—or not damaging—quality, that is a good thing to do.

[Bill Esterson (Sefton Central) (Lab)]

rose—

[John Redwood]

I am afraid I need to move on because many people wish to speak. Time is limited.

I draw the attention of my right hon. Friend the Chief Secretary to the Treasury to the issue that I raised with him in my intervention. One very important industry that is almost completely nationalised—the tracks, signals and stations are completely nationalised and the train operating companies are very strongly regulated and controlled by franchises, so they are almost nationalised—is the railway industry. It is a growing industry, and this Government are committing a lot of money to it. It is an industry which, I believe, all the main parties in the House wish to commit money to and wish to grow and invest in.

However, an independent study in 2011, the McNulty report, showed that our railway does less for more cost than comparable railways on the continent. It should be a matter of great concern, and I hope it will be a matter for review by those dealing with the railways and with public spending, because as we channel those huge sums of money into our railway to try to get expansion and improvement, we need to pull off the trick that the best private sector companies manage—of driving quality up and costs down at the same time. A myth in some public sector managers’ minds is that a cut in the amount spent is bound to lead to worse quality or impaired service, whereas every day in a good private sector company they go to work saying, “How can I spend less and serve the customer better? How can I apply new technology so that I get more for less? How can I have a better skilled and better motivated workforce?”—I hope it is not done by unpleasant management, because that usually leads to the wrong results—and “How can I motivate the workforce more so that they are empowered to achieve more and do less?”

That is the spirit that we need in the public sector, and if we began with the railways, it would make a very important contribution to improving our overall productivity rate.

Finance Bill

Debate between Bill Esterson and John Redwood

Tuesday 1st July 2014 Commons Chamber

[Mr Redwood]

I thought that I had dealt with that point. As far as I am concerned, it was proven conclusively in the ’80s that taking the rate down from 83% to 40% increased the revenue very substantially and on a sustainable basis. That was sufficient to persuade the official Labour party—perhaps not some Labour colleagues here today—not to increase the tax rate from 40% throughout its long years in government until the very end.

[Bill Esterson]

Does the right hon. Gentleman not recognise that the economic circumstances are now rather different from those he is talking about. Surely we need a study, as the new clause proposes, to enable us to look at what is happening now.

[Mr Redwood]

I do not think that the economic circumstances were as different as the hon. Gentleman thinks. In the early ’80s the Conservative Government inherited an economic crisis from Labour, just as this Government did. There was a lot of unemployment and a big task in getting people back to work and getting the economy growing again, rather like today. The Government at the time managed to do that, just as this Government are, so I do not accept his point.

However, I find the fact that Labour is going backwards on these issues rather perturbing. Why can the modern Labour party not understand the basic points that the Labour party that was victorious between 1997 and 2010 understood fully? Why can it not understand that it is possible to take the tax rate too high and get less revenue? The Treasury has now accepted the doctrine of the Laffer curve and understands that putting the tax rate above the optimising rate would surely be a very foolish thing to do. It knows that that applies to capital gains tax, as it clearly does to income tax. I submit that 50% was well above the optimum rate, because we collected rather less revenue than many people would have liked. I welcome the fact that the Government have started to put that right.

I do not think that we need the study that the Labour party is recommending today, and I advise it to think again about what it learnt in the ’80s and ’90s but appears now to have forgotten. It shows that the former Labour Chancellor was clearly not crowd-pleasing when he refused to increase the rate from 40%—he was clearly antagonising many of his Back-Bench colleagues by not doing so—so there must have been a good reason for it. I think that reason was a sensible one: it would have raised less revenue, rather than more. I urge the Government to reject new clause 14.

Academies Bill [Lords]

Debate between Bill Esterson and John Redwood

Monday 26th July 2010 Commons Chamber

[Mr Redwood]

The main mechanism by which academies could take more of the money would be by their being extremely popular and attracting more pupils, because most of the money follows the pupils. That is a thoroughly benign pressure. If these academies are going to take off and develop extremely good standards and reputations, they will attract more pupils and get more money, which they will need because they are teaching more pupils, and the other schools will need to pull their socks up. If the outcome is not as successful as that, the hon. Lady’s worries should fall away. Surely she must accept, however, that we need some challenge and improvement in the system, and that there is nothing wrong with choice.

Why is it that someone like the hon. Lady does not trust anybody other than the state and is never prepared to give anybody any freedom to initiate, innovate, change and improve? Cannot she see that we desperately need to raise school standards, and that we need to do something to try to make that happen? Her system was tried for 13 years, and it did not work.

[Bill Esterson (Sefton Central) (Lab)]

The right hon. Gentleman’s point about trust is unfortunate, to say the least. Governing bodies do not always get these things right, and that is why some kind of mechanism needs to be in place. The amendments are trying to achieve that and to remedy some of the problems caused by our not having enough time to do the job properly in Committee.

[Mr Redwood]

I have said that I love democracy, and it is often a good idea to give more people more votes. However, let me deal directly with the issue. Parents are not without powers or influence in this situation; if they were, I would immediately sign up to the amendment tabled by the hon. Member for Southport. I suspect, however, that Ministers will argue, like me, that it would be a nice addition but is unnecessary because there are other checks and balances in the system.

Let us consider those elements. First, there is an elected local authority that will have a lot of influence and control over these schools. Its voice will be heard because it has considerable influence over the appointments of the very people who will be making this proposal or decision for each school. The local authority often has members on the governing body, and the governing body has parent representatives. If the parents became alarmed by the way in which the head teacher and the senior governors were moving, they would presumably make their voice heard through the parent governors or use their ability to change those governors to make the point.

Finance Bill

Debate between Bill Esterson and John Redwood

Thursday 15th July 2010 Commons Chamber

[Mr Redwood]

Indeed, it tried to stop them on many occasions. If we do too much of that, however, we have a poorer country, a smaller tax base and all the rest of it. It is a pity that the Labour party still has such a downer on success, prudence and savers, but it might be surprised—hopefully, pleasantly surprised—in due course to find that people on more modest means take advantage of this flexibility as well. We no longer live in a world in which everybody retires at 65 and does no more work. I see around my constituency many people taking on paid work into their late 60s and early 70s, either because they want to or, in some cases, because they have to in order to supplement their resources. Why should we debar them from this flexibility any more than richer people, if they have savings?

[Bill Esterson]

The right hon. Gentleman mentioned the record of the last Labour Government on pensions, but what about the record of the previous Conservative Government when it came to the mis-selling of pensions? I trust he would accept that that was a serious problem.