Zero-emission Buses

Gavin Newlands Excerpts

Tuesday 21st May 2024 Westminster Hall

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

There was me, about to say that I agreed with pretty much everything that my DUP colleagues said, and then the hon. Member for Strangford (Jim Shannon) made his final comment. I am sure he did so on purpose, as he always does.

I start by thanking the hon. Member for North Antrim (Ian Paisley) for introducing this debate and for bringing up this issue again, as he often does. As the hon. Member for East Lothian (Kenny MacAskill) said, it is uncomfortable to agree with pretty much everything that all the DUP representatives have said in the debate thus far, apart from the last sentence of the hon. Member for Strangford. That is not always a comfortable position for an SNP Member, but I thought the hon. Member for North Antrim set his case out extremely well to remedy the unacceptable situation in this country. He spoke of the three major bus manufacturers. I have visited Alexander Dennis in Falkirk and Camelon a couple of times and spoken to it many times. The hon. Gentleman spoke of the 40,000 buses, only 3,000 of which are zero-emission, and the 4,000 British-built green and clean buses that were promised by a previous, previous, previous, previous, previous Prime Minister—however many previous it is. They said that they would be manufactured in the UK. The initial aim of that commitment has been lost.

The hon. Gentleman mentioned imports, and that gets to the crux of the issue. Some 46% of those buses were manufactured outside the UK. The vast majority come from China. That is the case in my constituency. I will come on to say how good a job the Scottish Government have done in getting on with ordering zero-emission buses, but we have the same issue with the import of Chinese buses in Scotland. Renfrewshire, in my constituency, with McGill’s, has the highest concentration of zero-emission buses anywhere in the country outside of London, a fact of which I am proud. The fact of which I am less proud is that the clear majority of those buses are Chinese-manufactured. I wish to see that change.

Ultimately, these are highly skilled, highly paid jobs. They are the type of jobs that this Government—in fact, all of us—want to see not just retained, but increasing in this country. At the moment, we are in danger of losing some of those jobs.

The hon. Member for North Antrim spoke of the retendering of the Blackpool bus order, which was changed from Yutong to a UK manufacturer due to social and environmental benefits. In my mind, though, we should not be leaving it up to the operators or the local authorities to put those conditions in place—I will come on to that later. It should be for the Government to do so.

The Chair of the Transport Committee, the hon. Member for Milton Keynes South (Iain Stewart), made a far more balanced contribution to the debate. He spoke of the Falkirk growth deal, which I am well aware of, having visited ADL. He made a fair point on Alexander Dennis having previously partnered with BYD, which has been brought up. It used BYD chassis, but that is no longer the case; the new electric bus fleet is now manufactured entirely in-house.

The hon. Member for East Lothian spoke of the Brexit bonus that was plastered on the side of the bus; the irony is that we are not seeing the Brexit bonus in bus manufacturing in this country. He spoke of global warming, and how important it is that we decarbonise as quickly as possible. He made a very fair point that electric buses are not the solution—certainly at the moment—for many rural routes, particularly in Scotland: hydrogen may be a better alternative for those services. He also made the point that Scotland is almost uniquely placed in Europe to deliver the green hydrogen that would support such an endeavour—in fact, it is probably better placed to do so than anywhere else in Europe.

The hon. Member for Mansfield (Ben Bradley) spoke of the £13 million for the scheme towards a new zero-emission bus fleet, as well as the challenges on infrastructure, with which I think we all agree. He also spoke of his disappointment at not being elected Mayor—I suggest the hon. Gentleman is somewhat of a masochist, addicted as he seems to be to standing for election.

Of course, the hon. Member for Westminster Hall, West—the hon. Member for Strangford—who is always here assiduously, spoke rightly about the potential issues around human rights and religious freedom relating to some of these orders. The irony in all this, with all the contributions we have had from DUP Members today— I am not ascribing any blame to the DUP for this, incidentally—is that Northern Ireland has, by some distance, the worst charging infrastructure for electric vehicles in this country. This is an issue that the hon. Gentleman has brought up previously in debates in this Chamber. I will forget his concluding sentence and instead circle back to the sentence before, when he said that a rising tide lifts all ships, or all boats—you may choose the version you wish. I think that is entirely true.

I raised this issue in Transport questions last week. In his answer, the Secretary of State challenged the Opposition’s confidence in UK bus manufacturing. Given the DFT and wider UK Government’s delivery on this, I thought that was quite a brave challenge. We do have confidence in the bus manufacturing sector, but it is very difficult for that sector to compete on a level playing field with the significantly lower wages and the subsidies available in China.

The hon. Member for North Antrim was talking about TfL when he said that we are penny wise and pound foolish in this country, but I think we can say that in a wider context and in many ways when it comes to bus tendering or procurement in this country. To save a few per cent, we are sending hundreds of millions of pounds-worth of orders outside this country. I want the Minister to make it make sense, because it makes no sense to me. We are doing economic harm and losing jobs overseas. It makes no sense whatsoever.

In addition to the questions already asked by the hon. Member for North Antrim, I would like the Minister to directly answer these three questions. Does he think that highly skilled engineering and manufacturing in this country can compete with China on labour costs? What work has been done in Government to identify how other European countries that follow the same trade criteria obligations as us manage to support their domestic manufacturing sectors a hell of a lot better than we do? Lastly, particularly when compared to the Scottish ultra low emission bus schemes—SULEBS 1 and 2—and now the zero-emission bus schemes—ScotZEBs 1 and 2—would he agree that his Government’s ZEBRA schemes have been an unmitigated failure?

To conclude, the Minister also said in his response that those being awarded ZEBRA grants can put

“social value in their tenders”,

but there is no reason why the scheme itself cannot embed that social value in the conditions for getting Government grants in the first place. Bluntly, local councils and combined authorities in England are financially under the cosh enough from this Government. They fear expensive legal challenges from companies with deeper pockets than their own, and the UK Government simply do not have that problem. France just a few years ago began beefing up its social and environmental procurement roles, and from 2026 public contracts must include conditions that specifically relate to broader social needs and employment protections. To be honest, they are in a far better place already without the beefing up of those particular obligations in 2026.

It is no use for the Minister to wring his hands and say that it is up to councils to decide; the UK Government are ultimately the ones handing over the cash. At the moment, that cash is allocated with no thought given—or allowed to be given—to any industrial strategy or economic policy that might benefit bus manufacturing on these isles. They have just thrown £143 million at ZEBRA round 2, and not a penny of that will be conditional on its being spent on buses made using labour that is covered by humane employment laws or with any kind of environmental accountability. UK manufacturers play by those rules; their competitors overseas, who will be able to grab a share of that windfall, cannot say the same. We all know that to be true.

There are world-class bus manufacturers in these isles—Alexander Dennis Ltd in Camelon is one of the leading ones—but if the Government carry on with their current course, they will push bus-making down the same road as our counterparts in the rail manufacturing industry—going from crisis to crisis, with the barely remaining operations here all owned overseas and supply chains completely devastated. The Government have it in their hands to stop the rot now and guarantee a future for a high-skill, high-value industry right here in these isles. They need to grasp that opportunity quickly, before it is too late.

--- Later in debate ---

[Guy Opperman]

I am told that the companies Yutong and BYD are not state-owned. That is the first key point. The second is that there is a degree to which we debate in this House the extent to which the state supports individual companies in their individual country. I take the hon. Gentleman’s point. Clearly, on one simple basis, a worker in China is not paid the rate or salary that a worker in this country is paid, with automatic-enrolment pensions and all the welfare support and other bits that come on top of that. That is clearly a difference in scale. But I want to try to address a couple of the key points.

[Gavin Newlands]

Will the Minister give way on the WTO?

[Guy Opperman]

No. I will try to address the point made by the hon. Member for South Antrim. As a Minister in a different Department, I brought forward ESG: environmental, social and governance regulations. Those apply across the City of London, all pension funds and, by and large, to how local authorities conduct their business. Those bodies must give due consideration to ESG in their purchasing. More particularly, under the Cabinet Office public procurement notice 02/23 they have to be mindful and cognisant of modern day slavery in the supply chain. Public sector suppliers must comply with all the applicable human rights and employment laws, as set out in the Modern Slavery Act 2015.

As was rightly set out, social value for the tender can be considered—and already is—by local authorities. There is a degree to which organisations seek for Government to say the local authority cannot do this, but it is for the individual local authority to look at the way it is commissioning. Matters of social value, ESG and the interpretation of modern day slavery and its impact are highly relevant when doing that. The fair point has been made by various Members that commissioning an environmentally friendly bus from somewhere 10,000 miles away seems an interesting call, given the consequences.

We must be aware that a lot of companies in this country also receive aid from the Government. I want to try to set that out. Members will be aware, I am sure, of the funding, research and development through the Advanced Propulsion Centre, which allows UK bus manufacturers to be supported by Government to seize opportunities for the future. Through the APC research and development competitions, the UK Government have awarded grants totalling £24.2 million for bus-related projects, with total costs of £52 million.

Those late-stage collaborative R&D competitions are an important part of the Government’s support for the UK automotive sector’s transition to zero-emission vehicles and provide backing for new market-leading technology to underpin battery and fuel cell electric buses. There is also £460 million in dedicated funding provided for the zero-emission buses this Parliament. The innovative technology is to be deployed, we suggest, at scale. More than 5,200 zero-emission buses have been funded across the UK since the Government committed to funding at least 4,000 this Parliament, and UK manufacturers are leading the way.

In March this year, we announced a further £142 million to support almost 1,000 more zero-emission buses. I look forward to UK manufacturers winning more orders. For example, I think Wrightbus has been named the fastest-growing and most successful business in Northern Ireland, having been struggling a few years ago, however one interprets the business as it was. On the back of Government funding for zero-emission buses, the company’s numbers have massively increased, from more than 1,000 to almost double that. Bus funding in this country has pretty much doubled in terms of Government subsidy and support over the past 14 years.

With respect, I suggest that the Government are fully supporting the bus sector, providing financial support, whether through Innovate UK or individual support in relation to hydrogen.

[Gavin Newlands]

The Minister talked about Government support. In fairness, it was before he was Minister, but he may remember a Transport Committee report that said that Scotland had ordered just over 10 zero-emission buses per 100,000 people, compared with 0.94 zero-emission buses outside of London. Does that highlight the success that the DFT has made of the roll-out?

[Guy Opperman]

There was pretty much nothing in the hon. Member’s speech with which I agreed, aside from his comments in relation to the hon. Member for Strangford. I, too, believe we are better together, in so many different ways. The long and the short of it is that I am proud to stand up and defend the UK bus industry. I am also proud to defend and support the degree to which this Government have supported the bus industry, and we have seen companies such as Wrightbus and others grow on the back of that.

Is everything perfect? No, of course not. Is there still work to be done? Yes, of course. Is there still work to be done to ensure that local authorities and commissioners fully understand their obligations under the Modern Slavery Act, the impact of social value and all the consequences of any commissioning purchase? Can the Government work harder with, for example, the Department for Business and Trade and the Cabinet Office to ensure those rules are then disseminated to the commissioners? I do accept that more can be done in that space.

However, as an example, £76 million in UK export finance loans and guarantees have been provided to UK bus manufacturers in the past few years, which is turbocharging exports. Wrightbus, as I understand it, is exporting to Hong Kong, right on the doorstep of China, and UK manufacturers are continuing to win orders around the world. Although we clearly want UK manufacturers to be commissioned in this country, it is most important, surely, that they can also take orders from around the world; my hon. Friend the Member for Milton Keynes South made that fair point. The argument is nuanced. We want our manufacturers to be able to compete worldwide, and I believe they can.

We are also providing certainty for manufacturers on the pathway to a fully zero-emission fleet. The final decision on diesel buses will be made shortly; part of the process is understanding exactly the capacity and capability of our UK bus manufacturing sector—if one sets a date that is too soon, clearly there are consequences, but if one sets a later date, there are also consequences. We are very much engaged with finding the sweet spot for a date, and we will be making a decision without a shadow of a doubt in the very near future. We believe that will provide a greater degree of certainty, allowing further focus on research and development lines, and also shifting production to producing more zero-emission buses at scale.

It is also clear that as a result of the Government’s action, air pollution has reduced significantly, both since 2010 and, more recently, since the introduction of zero-emission buses: since approximately 2016 or 2017, there has been a true ramping up—a massive reduction in CO₂.

I want to finish on a couple of the key points that have been made. My hon. Friend the Member for Mansfield (Ben Bradley) rightly made a variety of points. We clearly are working with local authorities, like his good self’s. The £8.3 billion for road resurfacing, redirected because of the HS2 second-leg decision taken by the Prime Minister in October, has benefited all local authorities, not least Nottinghamshire. I saw that when I visited there about three weeks ago and met my hon. Friend the Member for Rushcliffe (Ruth Edwards). I actually visited the site and met some of the councillors and other individuals.

My hon. Friend the Member for Mansfield is clearly badgering me about a variety of roads and infrastructure projects. He is passionate about the A614, which, I assure him, is engraved at the very top of my to-do list. I will make sure that we get that project over the line, to the benefit of both his constituents and my right hon. Friend the Member for Sherwood (Sir Mark Spencer), who has been robust in his recommendations.

I have dealt clearly with the point about competition on labour costs, which is a fact that we cannot disagree with or ignore.

It is hard to disagree with anything that my hon. Friend the Member for Milton Keynes South said. I do want to restate the point, though, that this is a nuanced argument. We want our manufacturers to be able to export, as well as to supply in the local environment. That has consequences when it comes to being part of WTO agreements. But we also want to make sure that we, as Government, are supporting manufacturers as much as we possibly can. I have addressed the issues of modern-day slavery and will not necessarily take that any further.

I want to finish, to allow the hon. Member for North Antrim to wrap up the debate with sufficient time. I genuinely welcome this debate. It has been an opportunity for us to cite, laud and praise a growing business in the UK. In these tricky times, there is no doubt that bus manufacturing in the UK is growing substantially. The best evidence is Wrightbus, with its massive increase in numbers. I look forward to visiting and being ambushed by a lemon drizzle cake in the appropriate way, and I greatly welcome the opportunity to set out the degree of support that the Government have given it.