UK Automotive Industry

Gavin Williamson Excerpts

Tuesday 1st April 2014 Westminster Hall

[Gavin Williamson (South Staffordshire) (Con)]

It is a great privilege to have secured this debate about the United Kingdom’s automotive industry. I hope that we will approach it in a consensual manner, discussing some of the successes we have had and how we move the industry forward. I think hon. Members are here not just because we understand how important the UK automotive industry is to our whole economy, but because we have a passion for the automotive sector itself.

I am a great fan of the BBC’s “Top Gear”. It is one of those programmes that is on every Sunday, and I dedicate myself to watching it. I am not sure whether you, Sir Alan, have the same enthusiasm for the programme, but I certainly do. One of the finest episodes I ever saw was in the most recent series, where the last part of the episode was dedicated to celebrating the UK’s automotive industry and everything we produce here, whether it was a Dennis or Leyland truck; a product from JCB or Caterpillar; a Norton or a Triumph motorcycle; one of many family cars that are produced in the UK by Toyota, Nissan or Honda; or some of the luxury cars that are envied the world over—Bentley, Rolls-Royce, Aston Martin, Jaguar and Land Rover.

The episode also celebrated our success in Formula 1, for which we are producing the finest racing cars in the world—from Petronas, Red Bull and McLaren to Williams and Lotus. The Italians hold nothing on us, as we beat them consistently. Quite simply, we produce the best in Britain, and a lot better than what is produced in Italy.

I do not want this debate to be about how we produce better things than the Italians, the French or the Germans, as it could go on for many more hours than the hour and a half that we have been allotted. Many people have a livelihood in the automotive sector. Some 731,000 people are involved in the wider automotive sector, while 146,000 are directly employed in automotive manufacturing. The industry expects the sector to grow, not by 5,000 or 10,000 jobs, but in the region of 100,000 extra jobs by 2020.

We are producing more and more. Often we look back to the ’50s and ’60s as the heyday of automotive production, but we are rapidly gaining ground. Last year, 1.5 million cars were produced in the UK. Production is forecast to be up to 2 million by 2017—more cars produced in Great Britain than ever before. Those are high-value cars, which make a difference to our balance of trade. Some 10% of all the things that we export from this country are automotive products.

We are the second largest exporter of construction equipment in the world. We are leading the field—for example, with JCB, which is based in Staffordshire—in developing technology and world-leading products. If we go to building sites in China, Russia, India and Brazil, we can see British products digging the foundations for their economies.

[Dan Byles (North Warwickshire) (Con)]

Does my hon. Friend agree that it is not just about British products going abroad, but about overseas companies seeking to come to Britain to make use of our expertise? For example, Nissan recently announced its largest investment outside Sunderland—a new £6 million investment with ADV in my constituency. That sort of confidence from overseas companies coming to the UK is vital.

[Gavin Williamson]

My hon. Friend is absolutely correct. Much of our success has depended on learning from foreign businesses. They invest in the UK because they see that we have the right environment and structures to succeed.

Since 2010, £7 billion has been invested in the automotive sector, growing success and bringing jobs to the UK. My constituency of South Staffordshire has been incredibly fortunate to benefit from that investment; Jaguar Land Rover has announced a £500 million investment to build a new engine manufacturing facility on the i54 South Staffordshire site, creating 1,400 jobs directly and another 3,500 jobs across the UK in our supply chain.

[Mr Jim Cunningham (Coventry South) (Lab)]

I am sure that the hon. Gentleman recalls that one of the starting points for the turnaround of the motor car industry was when Tata took over Jaguar—before the 2010 election, by the way. I remember meeting Tata at the time, along with the trade unions.

We once tried to get Nissan to invest in Coventry airport and turn it around for car production. We did not get the grants at the time, which is why Nissan went to Sunderland instead. Nevertheless, we welcome any increase in production and manufacturing generally, but most importantly in Coventry and the midlands. The motor car is a big thing; Coventry was once known as the motor car city.

[Gavin Williamson]

The hon. Gentleman is absolutely right. Let us not forget that the west midlands are the beating heart of the automotive industry in this country. The west midlands are what drive the automotive industry and have the most to gain from an expanding automotive industry. Almost one third of those employed in the industry live and work in the west midlands. That is why many hon. Members from the west midlands are present for today’s debate. We know that it is important to our constituencies and our region to drive economic growth and success. We have to be committed, both as a Government and as constituency Members of Parliament, in order to support businesses, whether foreign or domestic, to invest.

While much has been done, there is much more to do. The hon. Member for Coventry South (Mr Cunningham) pointed to the success of Jaguar Land Rover, much of which is down to research and development and which, importantly, leads to excellent products that people want to buy.

[Jeremy Lefroy (Stafford) (Con)]

I congratulate my hon. Friend on securing this debate and on all the work that he has put in to ensure that JLR’s move to South Staffordshire will be a great success.

Does my hon. Friend agree that one of the areas in which the UK has a tremendous competitive advantage, based on excellent, top-quality R and D, is the development of engines? We have engine plants all over the country, including in my constituency—although not for the automotive industry—Perkins Engines, which makes the largest engines. It is vital that long-term investment in research and development in an area in which we have such a competitive advantage continues to grow.

[Gavin Williamson]

My hon. Friend is absolutely right. He is right to point out the valuable work that Perkins Engines does to supply the heavy construction sector. We are seeing a build-up of expertise in engine design and manufacture, not just in the west midlands but right across the UK. That can be seen not just in JLR’s investment in its new plant or in Perkins’s work, but in BMW, which produces many of its engines in Hams Hall, and in Ford, as a third of its cars, which are produced across the globe, have engines manufactured in the UK. That is why it is vital that the Government keep their commitment to invest in research and development, whether through the Technology Strategy Board or the regional growth fund.

I am pushing for the Government to support and commit to the regional growth fund, and I hope the Minister will reassure us on that. I seek real Government commitment to help British industry and automotive production so that the technology and research and development bases may grow and develop. It is vital that R and D is based here in the United Kingdom, because if we can get businesses to invest in R and D in the UK, they will often base their manufacturing here, too.

[Mr Jim Cunningham]

I congratulate the hon. Gentleman on securing this debate. An important driver in the west midlands, and certainly in Coventry and Warwickshire, is the university of Warwick, where a lot of research and development and business innovation take place. Many companies, including companies from Germany, are investing because of that research and development, which helps the economy not only of Coventry and Warwickshire but of the west midlands. That is vital.

[Gavin Williamson]

The hon. Gentleman is correct. The finest engine ever produced is being designed and engineered at Whitley in his constituency and will be built in my constituency by Jaguar Land Rover. Having that research and development based here in the United Kingdom is vital when businesses decide whether to invest in manufacturing in this country. Sadly, we do not have enough manufacturing, and we need more, which is why I urge the Minister to do all he can to start a dialogue with manufacturing companies, whether it is Nissan, Toyota, Honda or any of the many others, to carry out more research and development here in the UK. Some of the greatest automotive designers have come out of British design schools, and some of the best technical expertise comes out of British universities, but we have to leverage that much more.

One of the UK automotive industry’s great weaknesses is our supply chain. Although we have a very developed assembly sector, the supply chain is incredibly weak. The industry runs a trade deficit of close to £7 billion in components that have to be imported, which is not good enough. We need to make progress by encouraging businesses to invest in the UK from abroad, but we also need to strengthen our supply chain’s domestic infrastructure. We need to help small businesses to grow so that they can become medium-sized businesses. We need medium-sized businesses that are already supplying the automotive industry to grow into large businesses, and we need to support them as they take their first steps towards investing in research and development. If our automotive sector does not have a developed supply chain, it will become much more difficult for the sector to develop the new products that it needs to succeed. Let us not be so naive as to think that large automotive companies do all their product development purely by themselves; they do it hand in glove with their supply chain, working incredibly closely to ensure that the components, parts and products are in place for them to deliver new models.

[Mr Jim Cunningham]

The hon. Gentleman raises some interesting points. Talking about the supply chain—I will leave the automobile industry aside for a moment—unless companies such as Rolls-Royce get their spare parts on time, they cannot finish their engines on time, which often results in a financial penalty. That illustrates the point that it is vital that we get the supply chain right, whether we are talking about the automobile industry, manufacturing in general or companies such as Rolls-Royce.

[Gavin Williamson]

The hon. Gentleman makes another strong point. When the disaster happened in Japan, many Japanese companies that produce large numbers of automobiles here in the UK were badly hit by disruption to their supply chain. There is a real benefit, not just to the British people but to companies based here in the UK, in having more of the supply chain on our doorstep. We need to do all we can not just to encourage small and medium-sized businesses but to encourage foreign businesses to invest in the UK.

I would like the Government to consider more closely how to give foreign investors greater reassurance that, if they invest here in the UK, they will have the support they need, whether through the regional growth fund or some other mechanism. That would help the UK to attract such investment. The Government must consider how we can reassure companies that we will give them training and skills support so that they have the right work force to deliver and manufacture their goods here in the United Kingdom. Education and skills are vital to this high-tech industry. Although we are making up ground, we still lag a little behind other countries. Every automobile manufacturer always says that its area of greatest concern is whether the skills will be in place for the next generation of workers.

[Caroline Nokes (Romsey and Southampton North) (Con)]

I congratulate my hon. Friend on securing this debate. Will he join me in congratulating automobile companies such as Ford, which already has 68 advanced apprentices in engineering and 15 higher apprentices in engineering? Ford is going further this year and has committed to an additional 50 apprentices in both engineering and craft at the higher level.

[Gavin Williamson]

I congratulate companies such as Ford on their work. In the run-up to 2018, the automotive sector hopes to take on 7,600 new apprentices and 1,700 new graduates. The sector is a growth area for young people, which is one reason why I am championing a £5 million investment in an engineering studio at my local high school in Codsall. Such a studio will concentrate on training the engineers and designers of the future so that South Staffordshire can provide the very best work force to Jaguar Land Rover and the aerospace sector and companies can grow with the best talent.

[Jeremy Lefroy]

Does my hon. Friend agree that we also need electronic engineers and software engineers? So much of the inside of a car these days is made up of electronics and software.

[Gavin Williamson]

My hon. Friend makes a valid point. At the weekend, I took my two daughters to the Enginuity museum at Ironbridge near Telford. We saw a cross-section of a Mini. Although the design is amazing and out of this world, it is all pulleys and levers. Now, much of a Mini’s design is down to electronics. We must not forget how high tech or capital-intensive the automotive industry is, but it is about getting the skills and technology in line, and the Government have an important role in ensuring that that happens. Let us not forget that if youngsters and people of all ages do not have the skills, and if we do not support companies constantly to skill up and improve their work force so that they can move forward, we will lag behind.

I am conscious that other people want to take part in this debate. In summary, I seek assurance from the Minister that the Government are committed to ensuring that the regional growth fund continues to deliver jobs and investment not just for the west midlands but for the whole country. The fund has already achieved a great deal, but it can do more. Let us not kid ourselves, because the automotive sector is one of the most international industries in the world. The sector can move to virtually any country. We would be very naive to think that countries such as Germany, Italy, France, Spain, Portugal, India, China, Russia, Brazil and the United States are sitting back and not being proactive in attracting investment, because those Governments are going out to seek and deliver investment. I want to see the Government continuing to do that, ensuring that it is clear to everyone not only that we have the most skilled work force and the best designers in the world and produce the best cars, but that we are the best place to produce them.

[Sir Alan Meale (in the Chair)]

Order. Before we continue, I have permission from the Speaker to impose time limits on speeches if necessary. Seven Members have indicated that they want to speak, and we need to give a proper opportunity for the Minister and the shadow Minister to respond. I will impose a five-minute limit on speeches, which includes any interventions. It is up to individual Members to decide if they want to give way.

--- Later in debate ---

[Gavin Williamson]

Thank you, Sir Alan. It is always a pleasure to speak again and to thank everyone, as you so kindly prompted me to, for their contributions.

The debate has shown that, as I said at the start, we are all passionate about this industry, and we all have a clear idea of some of the challenges to it. I have a great feeling that there is an immense amount of consensus on making sure that the industry thrives in future, so that instead of being the third largest car manufacturer in Europe, we will be the largest, hopefully in the not-too-distant future.