Stellantis Luton

Earl of Effingham Excerpts

Thursday 28th November 2024 Lords Chamber

[The Earl of Effingham (Con)]

My Lords, just two days ago, the Prime Minister stated that he will

“get people back to work”.

It is therefore extremely distressing that just 12 hours later Stellantis announced the closure of its plant in Luton with 1,100 jobs put at risk. The loss of these jobs has driven the Secretary of State to come to the other place in an attempt to mitigate uncertainty, but we have to ask: what more bad news is to come?

We hear the Government talk about growth and helping business, but that does not appear to be happening. We are committed to the reality that business matters. It matters for our high streets, our economic growth and, critically, for people’s livelihoods. Although we welcome the Government’s Statement in acknowledging this terrible situation, this process has taken far too long. We hear that, on parts of the Government’s employment Bill, businesses were not even consulted. On the Budget, which will deliver the highest overall tax burden since 1948, the engagement on the national insurance jobs tax was low—a tax raid on businesses of £25 billion that will reduce wages, stifle growth, deter investment and likely bring about a return to inflation and a higher cost of living for everyone.

When in government, we demonstrated unwavering support for businesses during the unprecedented challenges of the pandemic. Understanding the difficulties they faced, we provided 100% business rates relief to the retail, hospitality and leisure sectors, ensuring their survival during the worst of the crisis. Post pandemic, we extended our commitment with a 75% business rates relief policy, helping businesses rebuild and adapt to the new norm. We made it clear that, had we remained in government, this level of relief would continue.

However, the Government have chosen a radically different path. They have slashed business rates relief to 40%—a decision that we believe will be harmful to the recovery of our valued high streets and communities. This has been compounded with unnecessary measures that burden businesses even further. Estimates suggest that the business rates paid by thousands of shops, pubs and restaurants will more than double next year as long-standing relief is tapered off. Altus Group said the cut from 75% to 40% next April will mean an average 140% rise in business rates bills for more than 250,000 high street premises in England alone. The British Institute of Innkeeping has suggested that one in four independent pubs are

“set to fail as they face a wall of taxes from the Chancellor’s Budget”.

We should also recognise family businesses. They are the lifeblood of our economy and growth prospects, but the founder of Family Business United has said its members were shocked by the Budget, saying:

“It’s caused a lot of conversations around succession. The unintended consequences will be reduced investment”.


Another membership organisation, Family Business UK, says it has been “inundated” by inquiries about membership and advice.

The increase in national insurance contributions has already hit 1 million small firms, with analysis from the Treasury and OBR revealing that 60% of the costs are being passed on to working people immediately, rising to 76% in the medium term. This happens through reduced wage growth, price hikes and job cuts. Deutsche Bank predicts that 100,000 jobs will be lost as a direct consequence of these policies.

Despite claims by the Chancellor that there will be no further tax rises, the Business Secretary appears unable to back this assertion. Leading economists from Oxford Economics suggest that further tax increases are inevitable in the new year.

Meanwhile, the latest surveys paint a bleak picture of the economic outlook. S&P Global warns that business output is falling for the first time in over a year, with employment cuts now ongoing for two consecutive months. The CBI reports the sharpest decline in business sentiment in two years, and major investors like Pladis, one of the world’s fastest-growing snacking companies, are questioning the viability of investing in the UK. This sentiment is echoed by over 80 CEOs who recently warned the Government of £7 billion in added costs they fear will lead to job losses and price increases.

The Government are not just failing businesses; they are stifling growth, stopping innovation and deterring much-needed investment. These policies are dampening the entrepreneurial spirit that drives our once great economy, forcing businesses to lay off workers, cut back on expansion and abandon innovation in the face of mounting costs. If we want to foster a thriving economy, we must reverse this course, support businesses and restore confidence in the UK’s potential for growth and innovation.

Just nine months ago, Stellantis committed to investing in its Luton plant making electric vehicles at the site for the first time. Now, the plant is closing, bringing an end to its 120-year history of car production. What steps have the Government taken to engage with the manufacturer along the way? What work is the Minister undertaking with the Department for Work and Pensions to support Stellantis workers?

Stellantis was about to produce electric vehicles, yet just two nights ago the Government’s EV policy appeared to change and allow hybrid vehicles, despite the manifesto’s commitment to banning fossil fuels. Can the Minister clarify the Government’s position on this?

The Chancellor claims taxes will not increase, yet the Business Secretary in the other place appears unable to back this statement. Can the Minister please clarify the Government’s position on whether they will raise taxes? Furthermore, in relation to Stellantis, will taxes need to increase to support the production and adoption of electric vehicles?

We have witnessed the sharpest fall in business sentiment in two years. Economic activity is stalling. We need more than Statements from the Government referring to growth. We need concrete action plans to ignite the desperately needed inward investment into our economy which will benefit everyone.