UK Automotive Industry

Jim Shannon Excerpts

Monday 18th September 2023 Commons Chamber

[Gavin Newlands]

I am grateful for the intervention and, obviously, that is a triumph for Triumph, but it is very much the exception that proves the rule, as I am about to go on to state. I congratulate Triumph on its export success, but Brexit has caused immense damage to our automotive sector, with real-world consequences for workers and communities. Since Brexit, car production in the UK has plummeted from about 1.7 million in 2017 to just 840,000 in the 12 months leading up to July this year. Factories produced just 775,014 cars during 2022, the lowest figure since 1956.

Despite the much more positive recent news on investment, which has been mentioned, the new post-Brexit rules of origin that come into effect in January, which place tariffs of 10% on exports of electric cars between the UK and the EU if at least 45% of their value does not originate in the UK or EU, will be deeply damaging. The Minister mentioned Stellantis, the world’s fourth largest car manufacturer, which has recently warned that a commitment to make EVs in Britain is in jeopardy unless the Government renegotiate their Brexit deal with the EU to maintain existing trade rules until 2027. Mike Hawes, the chief executive of SMMT, speaking at the very same conference as the Secretary of State, echoed similar sentiments. Of course, the dogs on the street know that Brexit has been a disaster and they also now know that Labour owns this Brexit every bit as much as the Tory party. There is no mitigating, fixing or polishing Brexit, and the sad thing is that the Leader of the Opposition and the vast majority of those behind him also know that to be true.

To compound that issue, the UK Government’s approach to supporting both the industry and consumers during this period of upheaval has been less than ideal. We have witnessed unresponsive Government policy that lacks a comprehensive strategy for the sector’s future. The industry, a cornerstone of our economy, deserves a clear vision and targeted support to ensure its competitiveness and sustainability in a rapidly evolving global landscape. The ZEV—zero emission vehicle—mandate is a case in point, because on paper it is a good thing and it has cross-party support, save from some Conservative Members, but it has been bungled from start to finish. I say “finish”, but we still do not know the final details of the policy, and how it will be enacted or enforced, even though it is scheduled to kick in next year. Mike Hawes said this morning that

“until we see the regulations, we can’t plan, and if we cannot plan, we cannot deliver.”

Furthermore, the culture war within the Conservative party about the net zero agenda is sowing seeds of confusion and inaction. This morning, Mike Hawes had a message for the Conservatives, dressed up in a rhetorical reference they might understand:

“With respect, and I choose my words carefully—very carefully—where there is uncertainty may the Government bring certainty because on decarbonisation this industry is not for turning.”

We should all be united, not so much in quoting Margaret Thatcher—many in this Chamber might like me to do so, but it will not win me any votes—but in our efforts to combat climate change and achieve net zero emissions. We are instead witnessing political infighting that threatens to derail our progress. It is time for the Conservative party to put aside its internal divisions and focus on the pressing issue of climate change. One crucial aspect of that transition is the promotion of EVs.

The Scottish Government have taken decisive steps to support green transport, and we will continue to support the automotive industry to phase out the need for petrol and diesel cars by 2030. The most obvious example of this is on the charging infrastructure, particularly the rapid charging infrastructure, which I will come back to, but Scotland has also shone on incentives to drive switching from combustion engines to EVs. Over the past 10 years, Scottish Government grant funding has provided more than £165 million of interest-free loans to support the purchase of more than 6,100 vehicles, including my own—I have already declared that. If we look at that from a UK Government spending perspective, we see that that is the equivalent of £1.6 billion for 61,000 vehicles. The Scottish Government have provided nearly £5 million to support the installation of more than 16,000 home charge points across Scotland, which is the equivalent of nearly £50 million for 160,000 home chargers—that is over and above the Office for Zero Emission Vehicles grant funding from the UK Government. The Scottish Government have also provided the equivalent of more than £100 million to deliver 15,000 charge points to businesses.

[Jim Shannon (Strangford) (DUP)]

rose—

[Gavin Newlands]

I suspect I know what the hon. Gentleman is going to say about Northern Ireland, but I will give way to him.

[Jim Shannon]

The hon. Gentleman is setting out a good case for what the Scottish National party has done in Scotland, and it is much welcomed. In Northern Ireland, we have a real shortfall, because electric cars are being encouraged but there are not enough charging points. Has he taken into consideration the rural community, who depend upon their diesel cars in my area? It is not possible to have EV charging points in the rural community, where it is needed, just as it is in the urban areas.

[Gavin Newlands]

Praise for the SNP from the Democratic Unionist party might also not feature on my leaflets in the west of Scotland, as that might cause more problems than help. However, the hon. Gentleman makes a good point about rural chargers, as they are certainly part of the solution. Internal combustion engines and so on will clearly have to be part of the mix for some time to come for those in rural communities. That is where Scotland has taken a different approach over the past decade and more. Scotland has a comprehensive charging network, but the parts of it that are the most comprehensive are in the highlands, the Western Isles and Orkney—they are in the rural and island locations, where the private sector would not invest and so the Scottish Government invested to make sure that there was a charging infrastructure for the highlands and islands. However, I fully accept the general point he is making.

To come back to a point made in the speech by the right hon. Member for Wokingham, Orkney has the second highest rate of EV ownership in the UK, but that is hardly a surprise, as Orkney has the highest number of public EV chargers per capita in the UK outside London—this is four times the English rate outside of London. The lesson is clear: give drivers confidence in the charging network, combined with incentives, and people will switch to EVs. We still have a long way to go. In Norway, 20% of all cars on the road and 80% of all new cars are EVs. That is where we could be; in fact, that is where we should be.

Alexander Dennis Limited is a world leader in bus manufacturing and one of Scotland’s key manufacturers and exporters of high-quality products around the world. Just this year, its Enviro200AV electric fleet was used as the vehicle of choice for the autonomous bus service across the iconic Forth Road bridge. As diesel and petrol buses are phased out and replaced with zero emission vehicles—at least, that should be the plan—ADL is innovating with new electric battery technology that will ultimately benefit the environment and transport networks. However, that requires UK Government support and, so far, their record on buses leaves much to be desired.

There have been 558 zero emission buses ordered in Scotland through the Scottish Government’s ScotZEB and SULEBS—the Scottish zero emission bus challenge fund and Scottish ultra-low emission bus scheme—which is the equivalent of around 5,600 buses in England. Let us bear in mind that the previous Prime Minister’s target was 4,000 in England and that the vast majority of the zero emission buses ordered in Scotland are actually on the road. The figures equate to 10.1 buses per 100,000 people, compared with just 0.94 per 100,000 delivered through equivalent schemes in England, outside London. That is an extraordinary gulf in both ambition and delivery.

--- Later in debate ---

[Mark Pawsey (Rugby) (Con)]

It is a great pleasure to take part in this debate on the UK automotive industry because I grew up in a village just outside the traditional heart of UK car manufacturing. One of my earliest memories, as I walked to primary school in the mornings, is workers returning home from the night shift at one of the many car factories that existed in Coventry at that time.

I am very much aware of the heritage of the automobile industry in my local area. In fact, we have two excellent local museums that display historic British cars: Coventry Transport Museum, in Coventry city centre, which includes Queen Mary’s 1935 Daimler and the iconic Coventry-built 1975 Jaguar E-Type, and the British Motor Museum, in Gaydon, where there are over 400 classic British cars from major manufacturers such as Austin, Morris, Hillman and Triumph.

Over my lifetime, I have seen huge change in the origin of the cars on our roads. In my early years, they were mostly domestically manufactured. In the 1960s, I looked out for European cars, such as the Volkswagen Beetle, and then in the 1970s we saw the introduction of Japanese cars, such as the reliable, small Datsuns. In recent years, the majority of cars on our roads have been manufactured outside the UK.

However, it is two-way traffic. While the proportion of imports has risen, so has the proportion of our exports, as the automotive market has become international rather than national or even continental. Now some 80% of our production is exported, generating £77 billion in trade, as buyers across the world recognise the kudos of UK brands such as Land Rover, Range Rover, Jaguar and Mini. At the same time, overseas-based manufacturers, seeing the opportunities provided by the UK’s membership of the European single market, chose to manufacture their vehicles in Sunderland, Derbyshire and Swindon and, more recently, there has been investment in Ellesmere Port, Oxford and south Wales.

I have raised the issue of heritage and the impact of personal ownership of automotives, as cars are not just another manufactured product. For most people, a car is the second most expensive item they will ever acquire and there are few other items where there is such an emotive personal connection. I do not know many people who could tell me what brand of fridge or washing machine they or their parents owned, but almost all will know what brand of car they drive and how they identify with it. We need to generate the maximum impact from our iconic brands.

There are not just emotional reasons for supporting UK manufacture; there are hard-nosed commercial ones as well, because automotive manufacture provides highly-paid skilled jobs. There are 160,000 jobs in the manufacture of automobiles, which is 0.6% of the UK total. That is even more significant in the west midlands, where 2.2% of all employees work in automotives, including many in my constituency of Rugby. A large number of employees work at the London Electric Vehicle Company at Ansty Park, in my constituency, and at Jaguar Land Rover at Gaydon, and many more work in the supply chain, such as at Automotive Insulations on Central Park industrial estate in Rugby and Lenoch Engineering on Somers Road.

In 2022, the manufacturing of vehicles and parts contributed £13.3 billion to the UK economy—it was 0.6% of UK total output.

[Jim Shannon]

When it comes to telling good news stories—it is always good to tell them in this Chamber—Wrightbus in Ballymena would be one, encouraged by this Government and this Minister. One thousand jobs were created in Ballymena, with those buses being sold all over the United Kingdom but also across the world. Therefore, when there are good news stories to tell, let us tell them.

[Mark Pawsey]

I agree wholeheartedly. It is great to see Wrightbus’s product on the streets in London.

Although important and significant, the sector has seen decline, particularly in the number of vehicles produced. We peaked at 1.5 million units in 2015; that dropped to 775,000. The Society of Motor Manufacturers and Traders is projecting 860,000 units this year and 1 million by 2028—still lower than the peak years, but we generally produce higher-value cars, which is a key point to remember. The challenge for us is to maintain our volumes as the sector undergoes massive change. That arises from the worldwide move to electrically powered vehicles as a consequence of the imperative to reduce CO₂ emissions.

I still sit on the Business and Trade Committee. In October 2018, we produced a report on the sector, decarbonisation and the introduction of electric vehicles. I had to reread that report to remind myself that it was almost five years ago. We looked at the opportunities that would present themselves as we effected the transition from internal combustion engine-powered cars. Many of the issues that we considered five years ago are still relevant, but in other areas we have made progress. In August, almost four in 10 new cars that were sold in the UK had some form of electric power, with 20% being purely battery electric, 7.7% plug-in hybrids and 6.8% hybrid, in a market that grew by 24.4% over the previous years.

My right hon. Friend the Member for Wokingham (John Redwood) spoke about the role of the consumer. Most car drivers know that electric vehicles are coming. Most people will know someone who drives one, or who speaks enthusiastically about it and is preparing for that change. Most people by now have already been driven in an electric vehicle and, often, that will be an electric London taxi, manufactured in my constituency. On that pathway, the London Electric Vehicle Company has a pioneering role in the sector. In many cases, the move to electric will be championed by the cabbie, because every cabbie who drives an electric vehicle will speak very highly of it, compared with the diesel alternative. However, there remain those who are not convinced by the need to decarbonise or to move to electric vehicles as the solution, and there will also be people who do not support the ambition to get to net zero by 2050.