Tata Group Gigafactory Investment

Debate between Dominic Raab and Jonathan Reynolds

Thursday 20th July 2023 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I thank the Minister for advance sight of the statement.

Anyone who cares about and has knowledge of the automotive sector knows how important these battery factories are to the future of the UK. Without batteries being made here, it is unlikely there will be a long-term future for automotive production in this country, and for too long the UK has been far behind where we need to be. Therefore, everyone should welcome this news and breathe a huge sigh of relief that we finally have a positive development. In all the urgent questions, debates and statements we have had, this is what we have been calling for.

However, this relief should also come with the humility to appreciate that there is still a great deal to do. If this factory proceeds as planned, the UK will have 66 GWh of capacity by 2030, but at that point Germany would have over 300 GWh, Hungary over 200 GWh and China over 6,000 GWh. I therefore hope there is resolve in Government to make sure that this is just one of several major announcements of this kind. Of course, to secure this investment a substantial amount of public money has had to be spent. The Minister did not actually reference that. Can she provide some clarity on the media reports we have seen about how much exactly that will amount to?

This approach of using public investment to leverage in a much greater degree of private investment is the approach that we have advocated in Labour’s green prosperity plan. Government Ministers have at times publicly disagreed with this proposal, but we always knew they were in talks that involved the same approach. I therefore put it to the Minister that it would be far better to set out that Government approach openly, transparently and honestly in order to attract more potential partners and be able to negotiate from a stronger position. Some might call this an industrial strategy, because the truth is that the UK was desperate for this announcement. If it had gone to another country, such as Spain, things would have looked very bleak indeed. That is why we are all so relieved, but that is not, if we are frank, the optimum negotiating position to find ourselves in.

Can I also ask the Minister about local content? Crucial to our future success is building up a domestic supply chain for these factories. Will the Government be specifying a minimum percentage of local content required by this factory in order to receive the generous subsidy that has been agreed? In addition, will the Government be encouraging the development of advanced battery chemistries in the UK to aid domestic job creation, but also to limit any risks from geopolitical events that have the potential to disrupt supply chains in future?

We also need to consider this announcement alongside the wider policy environment for automotive in the UK, specifically the rules of origin requirements under the trade and co-operation agreement and the Government’s phase-out of internal combustion engines from 2030. Even with this welcome announcement, these timescales look incredibly tight. I do not believe anyone can seriously countenance a 10% tariff on vehicle exports to the EU, which would be the outcome of failing to meet the rules of origin requirements. Can the Minister update us on progress towards a deal?

Can the Minister also update the House on the Government’s position on the 2030 phase-out timetable? Is she aware of concerns that maintaining that timescale without sufficient domestic production effectively means only Chinese vehicles stand any chance of meeting consumer demand in the short term? Surely we should be thinking holistically about the whole sector. It is not about a different level of ambition, just a query as to the best way to get there.

Finally, can I ask the Minister about industrial energy prices? So much of the transition to net zero requires more competitive industrial prices than the UK currently has. We know that has been and is a material factor in the deal, so can the Minister say whether a precedent has now been set that will have consequences for other sectors, such as steel, if deals are struck for their decarbonisation? In conclusion, I repeat my welcome of this announcement. I welcome the Government’s conversion to Labour’s way of thinking. I hope it is a sign of many more good things to come.

[Dominic Raab (Esher and Walton) (Con)]

I warmly welcome the Government’s decision and the announcement by Tata, which highlights the UK’s tech potential—