Automotive Manufacturing: Employment

Freddie van Mierlo Excerpts

Wednesday 7th May 2025 Westminster Hall

[Clive Jones (Wokingham) (LD)]

It is a pleasure to serve under your chairship, Sir John. I thank the hon. Member for Reigate (Rebecca Paul) for securing this important debate.

The UK’s automotive industry is a cornerstone of our economy, contributing £93 billion and providing many high-skilled, high-wage jobs across the country, which pay 13% above the national average. Crucially, many are located outside London and the south-east. However, the industry faces intense global competition, supply chain pressures and the ongoing demands of the transition to net zero, as well as Trump’s disastrous tariffs, which are deliberately targeted at the automotive sector. The UK Government, under the Conservatives and now Labour, have struggled and failed to grow the economy. The automotive sector will need to be at the forefront of any plan to get on to the right path again.

When I visited BMW’s Mini plant in Cowley earlier this year—

[Freddie van Mierlo (Henley and Thame) (LD)]

I am grateful to my hon. Friend, as the Liberal Democrat spokesperson for trade, for visiting the Cowley Mini plant in Oxfordshire. All Liberal Democrat Oxfordshire MPs attended; it was a pleasurable visit and we saw the amazing work being done there. I am worried that the Government are asleep at the wheel on this issue and that we will see job cuts at Cowley as a result of the very high energy costs in the United Kingdom. I would like the Government to do more to tackle that and, potentially, to support the industry. Does my hon. Friend agree that the Government should announce greater flexibility, benefiting not just luxury manufacturers such as JLR—that is very welcome—but those that make cars intended for the mass market?

[Clive Jones]

I certainly agree with what my hon. Friend says about energy prices, and I will talk about that a bit later.

When I visited BMW’s plant, I met hard-working staff, who are the most at risk if the Government continue to get this wrong. Whether plants are being closed or investment scaled down, people lose their livelihoods and a rich history of manufacturing at the heart of Britain is lost, possibly forever.

This sector is at a crossroads: with the right support, it can lead the way in innovation, climate action and economic resilience, but without swift and strategic action, we risk losing a competitive advantage built up over generations. That is why more must be done to end the uncertainties that the car industry faces, and that starts by building consumer confidence in electric vehicles. The previous Conservative Government failed to support a thriving electric vehicle market in the UK, implementing chaotic U-turns that badly hurt the industry, and they continually failed to deliver the charging infrastructure needed to boost demand, create jobs and cut emissions. The Government must right that wrong by cutting VAT on public charging by 5%, by investing urgently in schemes to speed up the installation of rapid charging points throughout the country and by making it as affordable as possible to own an EV by reducing electricity prices that are passed on to the consumer.

One of the clearest calls from the sector is on energy costs. UK automotive businesses face electricity prices that are, on average, twice as high as those in the EU; gas costs are nearly 60% higher. That is an unsustainable burden. If we are serious about reshoring manufacturing and making the UK a global hub for ZEVs, we must address that urgently.

Ensuring that we have a strong trading relationship with our economic allies is vital for supporting UK automotive employment. The EU remains our largest trading partner for vehicles, and electric vehicles are now the biggest share of UK automotive exports by value. With the next EU-UK summit on the horizon, the time to act is now. We must give investors and manufacturers certainty and protect the employment and regional growth that depend on it.

What contingency planning is in place to protect UK manufacturers and exporters if President Trump’s damaging tariffs remain in place? What action is being taken to reduce the UK’s industrial energy costs to ensure a level playing field with our global competitors? What is the status of the £200 million that was announced in the autumn Budget for charging infrastructure but is in limbo? What is the status of the rapid charging fund, which has delivered ultra-rapid en-route hubs across the country? Will the UK formally seek to accede to the Pan-Euro-Mediterranean convention to provide manufacturers with a more flexible and reliable origin framework?

--- Later in debate ---

[Greg Smith (Mid Buckinghamshire) (Con)]

It is always a pleasure to serve under your chairmanship, Sir John. I begin by drawing the House’s attention to my entries in the Register of Members’ Financial Interests. I congratulate my hon. Friend the Member for Reigate (Rebecca Paul) on not only securing this debate but delivering a superb opening speech. She spoke with passion for the automotive sector, particularly Toyota in her constituency, and she spoke with realism about the challenges that we face, and the other way that is possible to ensure that consumers get to choose vehicles of the future that are greener and cleaner and do not rely on fossil fuels, but do not necessarily fit in with the Government’s chosen winner, despite the fact that they claim to be technology neutral. That is battery electric, whose sales figures, once we remove fleet sales, are utterly appalling because people simply do not want to buy one of those vehicles.

Employment in the automotive manufacturing sector— a sector that has long been the backbone of British industry, supporting hundreds of thousands of jobs and driving innovation—is the foundation of regional economies across our great United Kingdom. My constituency does not have any major vehicle manufacturers, but it sits in the absolute heart of motorsport valley. The motorsport sector and its supply chains do so much to create the next big thing and innovate. They find solutions, yes, for speed and the racetrack, but there is often a direct translation from the race car to the road car. So much British innovation in motorsport has found itself in the cars that I am sure all of us in this Chamber and people across the country drive today.

It is therefore with great concern that I speak about the marked lack of support for the vital automotive sector under this Labour Government. Let us be clear that this is not a new challenge: automotive manufacturing has been under pressure for many years from the combined forces of global competition, supply chain shocks and the urgent transition to cleaner technologies—note the plural, cleaner technologies; there is not just one. We now see a deeper, more systemic failure, which is rooted in the inability of this Government to deliver on their own promises and provide the strategic direction that the industry so desperately needs.

Take, for instance, Labour’s 2024 manifesto commitment to “supercharge the electric vehicle revolution” and make the UK “the best place in the world to manufacture electric cars”. Those are bold words yet one year into their term, we see precious little action, only rhetoric that seems to accept an electric future rather than a technology-neutral approach.

[Freddie van Mierlo]

Will the hon. Member give way on that point?

[Greg Smith]

I will give way to my constituency neighbour.

[Freddie van Mierlo]

Does the hon. Member regret the lack of action to bring forward battery manufacturing in the UK under the Conservative Government?

[Greg Smith]

What I regret is the ZEV mandate, which is why I voted against it at the time. It puts shackles around our automotive industry, and it needs to be revisited so that our automotive sector has the freedom to get on, innovate and provide future solutions that consumers might actually want to buy.

Even with the electric obsession, the promised gigafactory developments remain stalled or mired in uncertainty, commercial investment incentives have been vague at best and crucial supply chain support has failed to materialise in any meaningful way. Labour also pledged to spend on a national training programme to reskill workers for the green transition, yet we still await details of how, when and, crucially, where that will be delivered.

The skills gap in the automotive industry is widening by the day. Thousands of jobs are at risk, not because there is no demand for people to work in that sector, but because we do not have a pipeline of trained, job-ready individuals. The industry has been crying out for a co-ordinated national effort to address this, and what it has received instead is a patchwork of pilot schemes and a lot of ministerial hot air.

Contrast that with the pragmatic and targeted steps taken by the last Government, which launched the Advanced Propulsion Centre and the Faraday battery challenge—programmes that secured investment in cutting-edge technologies and laid the groundwork for the electric vehicle sector in particular. To attract global investment, we need to back British innovation and give investors confidence in our long-term industrial strategy. In government, the Conservatives also took real action to support jobs: the automotive transformation fund, which was backed by Conservative Ministers, delivered vital support to manufacturers, and let us not forget the commitment made to freeports, which are already starting to attract inward investment and create highly skilled jobs, including in areas directly linked to automotive logistics and component manufacture.

Now, under Labour, we see dithering where there should be decision making. The industry does not need more consultations; it needs action. Businesses are ready to invest—yes, in electric, but also in synthetics and hydrogen. However, they need the certainty that they can get on and do that. They need clarity on planning reform, energy prices, trade policy and the Government’s commitment to industrial growth.

The Government must address the ever-growing training deficit. They must launch a comprehensive industry-led training strategy that spans apprenticeships, technical colleges and adult reskilling programmes. It must be tailored to the needs of automotive employers, not devised in isolation by Whitehall, where the Government pick the winners and losers at odds with what consumers want to buy. The Government must do more to attract foreign direct investment into the automotive sector. That means tax incentives that are actually internationally competitive, a planning system that works at pace and a stable regulatory environment. Labour’s flirtation with regulatory overreach is already spooking the investors.

The Government must ensure that the UK’s de-fossilisation transition is an opportunity for jobs and growth, not a burden on industry. I repeat: that means genuine technologically-neutral support, embracing other technologies beyond battery electric, such as synthetic fuels and hydrogen, as well as putting realistic deadlines around any transition.

The automotive manufacturing sector is not asking for handouts; it is asking for clarity and leadership. The last Conservative Government took steps in that direction. Labour, in contrast, have offered slogans over substance, and pledges over performance. We cannot allow this Government’s inaction to cost Britain its place at the forefront of the global automotive industry. The time to act is now.