International Trade and Geopolitics

Jim Shannon Excerpts

Thursday 20th April 2023 Commons Chamber

[Darren Jones]

My hon. Friend is exactly right, and electric vehicles are a prime example. He and I were in Sweden last week on a Select Committee visit to look at how its electric vehicle battery manufacturing looks in comparison with the UK. If we are to continue to export cars to the European Union, we will have to hit the so-called rules of origin requirements where the components come from local or regional sources. Eventually they will have carbon embedded within them, in order to meet carbon border adjustment mechanisms and net zero targets. It is therefore crucial that the UK Government work with the private sector successfully to deliver that industrial policy outcome, or I fear we will see the near total decline of car manufacturing in the UK. While it is not for me as Chair of the Business, Energy and Industrial Strategy Committee to prejudge the conclusion of its inquiry into this issue, the contrast between what we saw in Europe last week, and what is happening in the UK, was stark.

[Jim Shannon (Strangford) (DUP)]

May I cast the hon. Gentleman’s mind back to his comments about the CPTPP? The Northern Ireland constituency that I represent has a large farming and agricultural manufacturing sector, and we export right across the world. Businesses in my constituency tell me that they are looking forward to opportunities that will potentially arrive from the far east. Does the hon. Gentleman recognise that farming in Northern Ireland has the potential to grow more, and that part of that growth will be in the far east through the CPTPP? If that grows, there will be extra jobs, extra opportunity, and real growth in my constituency and across Northern Ireland.

[Darren Jones]

I have to take the hon. Gentleman’s suggestion at his word as he knows much more about his constituency and farming than I do. If there are export opportunities that is great, but the question is whether that will deliver the wholesale economic growth that we need across the whole UK economy. It will be an important piece of the puzzle, but my proposition is that there is a much broader area where there are problems, and where Government policy is lacking.

In Sweden last week, we learnt about the sheer complexity of delivering a so-called gigafactory for electric vehicle battery manufacturing. We held in our hands, physically, fossil fuel-free iron made using hydrogen, which was being turned into low-carbon steel. I finally saw, after years, a carbon capture facility working, plugged in and capturing carbon in real life. Here in the UK, we just have ministerial statements setting out our intention to be world leading, without anything real or tangible to show for it. The British people will soon realise, if they have not already, that at the end of this yellow brick road set out by the Government there are just Conservative Ministers blowing smoke. The tragedy is that this is not just a dream: it is 13 years of Conservative economic mismanagement that will take years to clean up.

This sorry story is not just about what is happening in the European Union; it is about what is happening in the United States, too. During our Committee visits last year, it quickly became clear that the US is doing what Europe is doing, but on steroids. The Inflation Reduction Act, which is really a green new deal for the United States, sets long-term, multi-decade, easy-to-access tax incentives, grants, loans and market-setting standards to not only drive the net zero agenda but reinvest in the industrial capacity of the United States. This $500 billion multi-decade initiative is acting like a magnet, pulling investment, jobs and businesses into the American economy. Access to those tax incentives, grants and state-level support is predicated on agreements to train and employ Americans in areas that have been crying out for investment for years. In some circumstances, it is even predicated on business owners investing in childcare to help optimise the economic activity of the American labour market, including women.