Car Production: Solihull

Jim Cunningham Excerpts

Wednesday 16th January 2019 Commons Chamber

[Julian Knight]

I thank the hon. Gentleman for his intervention. The way to bring jobs into the UK is to create a business environment in which investment can flourish, and that is basically the point of my speech.

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

I congratulate the hon. Gentleman on securing this timely debate. He is right that not a lot can be said about the meetings we have had with Jaguar Land Rover, because that information is confidential, but Jaguar Land Rover is in a totally different situation from Bombardier. We want to support the hon. Gentleman, as he knows, in ensuring that Jaguar Land Rover goes on to create more jobs, and I am sure that he will want to touch on the question of the supply line. I have had a number of letters from small companies that are a bit concerned about the situation, although we have had some reassurances and there will be further discussions. I wish the hon. Gentleman all the best.

[Julian Knight]

I thank the hon. Gentleman for his intervention. I wonder whether he has seen my speech, because I am just about to mention Jaguar Land Rover’s successes, which are manifest. I mentioned employment at the start of my speech, and the reality is that we have gone back to the situation that we were in in 2016.

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[Julian Knight]

I certainly will, and I know the impact that investment has had on my hon. Friend’s local community and on the wider west midlands economy. Those jobs are fantastic. The pay is much higher than the national average wage, which creates jobs in the local economy through the multiplier effect. They are jobs that we have to keep and develop. The key word is “transition.”

[Mr Jim Cunningham]

Will the hon. Gentleman give way?

[Julian Knight]

I am conscious of time. Sorry.

Jaguar Land Rover has announced that all new models will be electrified from 2020, and I have no doubt that other manufacturers will follow suit. It is a simple fact that we do not yet have the infrastructure to handle a wholesale shift towards electric vehicles in the near future.

As I told the House during the passage of the Automated and Electric Vehicles Act 2018, the current capacity for public charging points does not come close to that provided by traditional filling stations. It will take time to put the necessary infrastructure in place and, until it is ready, our environmental goals are best served by encouraging motorists to switch to cleaner, modern vehicles of all types before we get rid of the internal combustion engine by 2040.

As the MP for a car-making town, and as a former chairman of the all-party parliamentary group for fair fuel for UK motorists and UK hauliers, I am grateful for the Government’s proactive approach to the sector. The previously mentioned sector deal is welcome, and I am proud to have the opportunity to serve on the new JLR development partnership, which will give the company, firms in its supply chain, trade union officials and others the opportunity to liaise directly with the Business Secretary, the Mayor of the West Midlands and other local politicians.

I also note the £500 million investment in the new advanced propulsion centre, which is intended to research, develop and industrialise new low-carbon automotive technologies, and in other initiatives such as the Faraday battery challenge and the supplier competitiveness and productivity programme. The car industry has proven itself more than willing to collaborate with Ministers in this field, match-funding not just the advanced propulsion centre but also another £225 million for R&D investment.

We face a period of economic uncertainty, especially for exporters, as we negotiate our future relationship with the European Union and start to pursue our own independent trade policy. It is vital to the wellbeing of constituencies such as mine and the entire British economy, not to mention the Government’s own long-term environmental and technological ambitions, that we do everything we can to offer stability and certainty to companies such as Jaguar Land Rover. Only then will they be able to make the investment needed to protect jobs, drive growth and make our eventual transition to electric cars a reality.

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[Richard Harrington]

If the hon. Gentleman was not invited, I would like to apologise to him. This was all done at the last minute. I will meet him whenever he likes, either informally or in a meeting with officials. The point I was making is that JLR is a cross-party matter, and it is treated in that way by the Government and by the company.

In the time we have, I wish briefly to outline the steps the Government have taken since JLR announced last Thursday that it will reduce its global workforce by about 4,500 people. I will then move on to address the arguments put forward by my hon. Friend the Member for Solihull. As he highlighted, the UK automotive industry remains one of our great success stories, and global demand for UK designed, engineered and manufactured vehicles is strong. Our industry is regarded internationally as very productive. Our industrial strategy builds on these strengths and invests in the future, to put the UK at the forefront of the next generation of electric and autonomous vehicles. JLR is a key part of our automotive manufacturing base, supporting high-quality jobs, both directly and across the automotive supply chain.

As my hon. Friend noted, last Thursday, Jaguar Land Rover confirmed that it is offering voluntary redundancy packages to its UK workforce, to reduce the headcount. As this is a voluntary redundancy programme, the company cannot give any figures on the number of Solihull workers who might be affected. However, JLR has made it clear to us, in a call that the Secretary of State and I had with its chief executive just before the announcement, that those working on production lines are not part of this programme; this predominantly relates to marketing and management staff. I do not make light of that; these people will be made redundant—we hope it will be with their agreement—and what job they do does not particularly matter. He also stressed to us that the apprenticeship programme, which has been supported so well by my hon. Friend and other local MPs, will continue, as will graduate recruitment and the recruitment of specific staff that the company needs.

The decision to offer these redundancies is the next phase of a £2.5 billion “Charge and Accelerate” turnaround plan, which the company announced last September. As I say, I have spoken several times to the chief executive and he has explained how these redundancies will streamline the business and help to ensure the company’s long-term health for the future. As I say, I do think a lot of every member of staff and their families, who face an uncertain time. I assure the House that we are working closely with colleagues throughout the west midlands to offer whatever support we can.

We are also working to support the company itself. We have a long-standing relationship with the firm and its parent company in India. Since the turnaround plans were announced last September, we have worked even more closely with the company in support of its long-term strategy as it invests and transitions to autonomous, connected and electric vehicles.

[Mr Jim Cunningham]

First, one of the important factors here is that the development of the electric vehicles takes place at Whitley in Coventry. Secondly, the Minister might want to think about whether a scrappage scheme would help the situation. I do not know—it would have to be put to the company—but it struck me as something that we should perhaps think about and explore to help the company. Thirdly, as my hon. Friend the Member for Warwick and Leamington (Matt Western) said, there is the issue of taxation. Lastly, when we talk about the labour force, it is important to remember that a lot of the labour force bought houses, certainly in my constituency and others, so we have to do as much as possible to help them if they run into difficult situations with, for example, mortgages.

[Richard Harrington]

I thank the hon. Gentleman for his intervention. He was at the meeting last week and I know that, like other Members, he spends a lot of time with Jaguar. Let me go through his points briefly. I must confess that I have not thought about a scrappage scheme, but I am happy to do so now, as he suggested. I will come to the matter of taxation and the electric vehicles later in my speech.

I was just about to confirm that Andy Street, the Mayor of the West Midlands Combined Authority, and the Secretary of State convened the Jaguar Land Rover development partnership, which brought together the company and local MPs, including my hon. Friend the Member for Solihull, whom I thank for having come at short notice. Other local MPs were invited and I hope that, although I might have missed him out from my meeting, the hon. Member for Warwick and Leamington was not missed out from that one. I was not there, in case there was an urgent question in the House on the subject; somebody had to be here to deal with it. I do not know whether I drew the short straw or the long one, but I intend to be there in future. It is a part of my responsibilities that I look forward to taking up. Also present were trade union representatives, trade bodies, local government and almost anyone who we felt was relevant and could be invited. The partnership is a continuing group. It heard from chief executive Ralf Speth about the significant investment that Jaguar Land Rover continues to make in the UK. He gave many examples of how the company is investing in the future, including in Solihull.

I accept the point that the hon. Member for Coventry South (Mr Cunningham) just made about working families throughout the UK, not just in his Coventry constituency—

[Mr Jim Cunningham]

I did say other constituencies.

[Richard Harrington]

The hon. Gentleman certainly did. The lives of people throughout the UK are affected. As my hon. Friend the Member for Solihull said, these are not just jobs: they are well-paid, highly skilled, well-respected jobs, and long should they continue. Jaguar Land Rover seems positive about the future. Last week, I met Steve Turner, one of the trade union representatives, and I have to say, without betraying Steve’s confidence, that I asked him what the management is really like—I have dealt with the chief executive and so on—and he said it is absolutely very good. I believe that, and I think everyone involved has confirmed that, so I am confident for the future.

Let me turn to the specific points. Jaguar has confirmed that the next-generation electric drive units will be produced at the company’s engine manufacturing centre in Wolverhampton, from later this year. The units will be powered by batteries assembled at a new JLR battery centre located at Hams Hall in Birmingham. That clearly reinforces the company’s commitment to the west midlands.

Over the past year, Jaguar Land Rover has announced investment in its key plants in Solihull and Halewood, to build the next generation of models, including electric vehicles. For Solihull in particular, in June 2018 the company announced hundreds of millions of pounds of investment in a technology upgrade to accommodate the next generation of flagship Land Rover models. Hopefully—this is certainly the intention—that will future-proof the site.

We are determined to ensure that the UK continues to be one of the most competitive locations in the world for automotive and other advanced manufacturing. My hon. Friend mentioned the automotive sector deal, which was published just over a year ago. The Government are working with industry to invest in the future. This includes a £1 billion commitment over 10 years through the Advanced Propulsion Centre, which is very impressive. Jaguar Land Rover has benefited from this support; most recently as part of a £4.4 million project through the Advanced Propulsion Centre, and a £11.2 million one through the connected and autonomous vehicles intelligent mobility fund.

I now want to turn to other arguments made by my hon. Friend. As he rightly points out, while Jaguar Land Rover has had great success over the past decade, the number of challenges facing the company are significant. Falling sales in China has been a major factor and it has had an impact on many global automotive companies. In addition, the broad trend of declining consumer demand for diesel has had an impact.

I make no apology for the Government’s bold vision on ultra low emissions vehicles, which we set out in our road to zero strategy. I am sure that, in the long run, Jaguar will be a major beneficiary of that strategy, as, of course, will be the environment of this country, Europe and, I hope, the world. We want to be at the forefront of this and aim for all new cars and vans to be effectively zero emission by 2040. Hopefully, by 2050 and beyond, every car will be zero emission. I agree with the critical point made by my hon. Friend: diesel plays an important role in reducing CO₂ emissions from road transport during the transition and it will continue to have an important role for years to come. We need to be clear on this point, both in our own minds and in our communication with industry, and I believe that we have been.

The Government’s road to zero strategy is clear that diesel, particularly the new generation of diesel engines, is a perfectly acceptable choice environmentally and economically. For those Members who are not familiar with this document, I suggest that they look at it. There has been much talk of the Government playing a role in destroying diesel and talking it down.