Britain’s Industrial Future

John Redwood Excerpts

Tuesday 15th November 2022 Commons Chamber

[Bill Esterson]

I would have hoped that, as a Conservative MP, the hon. Lady would have been talking to her own colleagues. I hope that her ministerial colleague will have heard what she said, and that she will join me in calling on him to respond to the requests of the steel industry. [Interruption.] The hon. Member for Stoke-on-Trent North (Jonathan Gullis) can sit there and heckle all day—he does quite a lot of that—but the honest truth is that we do need cross-party working to deliver for steelworkers. I am happy to support the call of the hon. Lady, as I am the calls of my colleagues who have spoken in this debate.

On the automotive sector, it must make sense for the Government to support workers at one of the most productive car plants in Europe. That is why the Government should be working with BMW at Cowley to give it assurances that they support electric car production in the UK. They should be working with the car industry to support the transition to electric vehicles, not sitting on the sidelines while our great automotive sector falls behind our European competitors. While we have one gigafactory in operation, Germany has five, with a further four in construction. France and Italy are set to have twice as many jobs in battery manufacturing as us by 2030. The precarious future of Britishvolt is incredibly worrying for the local economy, risking up to 8,000 jobs, but it also further jeopardises our gigafactory capacity as a country. As part of our plans for a national wealth fund, Labour will part-finance the creation of three new additional gigafactories by 2025, with a target of eight by 2030.

Turning to shipbuilding, a successful strategy means making and buying more ships here in Britain, such as the Fleet Solid Support Ships, rather than seeing lucrative defence contracts built abroad. It is, of course, a very important way of supporting our steel industry. Investing in sovereign defence capability is a matter of national security as well as being good for jobs, 6,000 of which are at the UK’s high quality shipyards from the Fleet Solid Support Ship contract alone.

A hallmark of each iteration of this Conservative Government has been to act in the heat of the moment and lurch from crisis to crisis. The revolving door of Ministers, the seemingly endless soap opera, the unedifying sight of Conservative MPs eating bugs in the jungle mask a much deeper problem. The Conservatives are unable to offer British industry the bedrock on which it needs to grow. They do not have an industrial strategy that can last the term of a Minister let alone the turn of the century. Whether that is ideological opposition—the mistaken belief that Government should get out of the way—or pure incompetence, it is clear that the Conservatives are failing British industry.

[John Redwood (Wokingham) (Con)]

rose—

[Bill Esterson]

I suspect the right hon. Gentleman is going to tell us that it is the former.

[John Redwood]

I support what the shadow spokesman says about wanting more made here; I quite agree. On the gigafactories that Labour is now sponsoring, what demands would it make of those putting forward the idea? The issue is: should they not have some customers and a plan that will work. What does he want from them?

[Bill Esterson]

The Government really should have done their own due diligence before investing. If the German, Italian or French Governments have made those investments because they have a strategic interest in their car industries, it must make sense for us to do the same here.

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[George Freeman]

I will have to check the exact number. I am surprised that the hon. Gentleman did not mention Aberdeen’s leadership. With our support, Aberdeen is a hydrogen hub and there has been the creation of hydrogen hubs in Teesside, Harwich and all around the country. We are investing in another industry of tomorrow—green and blue hydrogen. His question is revealing. The motion suggests that the Government are doing nothing at all about hydrogen, but far from it. We are investing in the infrastructure for the hydrogen of tomorrow.

[John Redwood]

Is there a danger that the UK could end diesel and petrol vehicle production too early compared with competitors—before we have a large electric car industry up and running? Would that not be bad news for our industry?

--- Later in debate ---

[John Redwood (Wokingham) (Con)]

I congratulate the Minister on a lively and informative speech. It was great to have a positive vision for the future from him. He rightly reminded us that many of the exciting new technologies and opportunities available to modern industry and business are being grasped by both the private sector and the Government working together. I congratulate him and his Department on that work. However, I urge him and the Department to greater efforts in the range of more traditional industries that are still very much industries of the future. We have a choice. If we make the right decisions on taxes, regulations, support frameworks and orders, we can produce more such things at home. If we make the wrong decisions, we will end up importing too many of them.

I start with energy. The Minister’s Department has a crucial role in organising our energy and the transition that it wants as well as ensuring that we have enough of the traditional energy forms when they are crucial to heating our homes and turning our factories. In this period of transition, we can do more to extract more of our own oil and gas. That is greener than importing it, because, in burning gas that comes down a pipe from the North sea, far less carbon dioxide is generated than if the gas were extracted somewhere else, transformed into liquid form and transported—at least half the CO₂ is saved that would otherwise be generated. More importantly, that is a safer supply. Even more importantly, if we are still to have high taxes on it, we will collect those taxes. At the moment, the more we import, the more dead money goes out of our country to pay somebody else’s taxes, doubly burdening our industry with the extra cost of what are sometimes extreme market prices to secure the supply—when there is not a long-term contract—and extra transport costs that must be put into the equation for effective delivery.

I urge the new ministerial team to take up from where the old team were moving to and understand that there are quite a lot of good proven reserves out there now. Production licences could be granted in a timely way, and we could have more of our own import substitution and more secure supplies for the future. It is possible to work with the industry on existing fields so that maintenance schedules can be kept to a minimum and output can be maximised, particularly over a difficult winter. We all know that if anything goes wrong with the UK and European gas supply over the winter, it will be our industry that gets caught first; industry is very reliant on plentiful gas supplies for much of its important processes.

We must be careful about carbon accounting. I think a lot of us feel that it does not make a lot of sense to say that the heavy gas-using industries and other fossil fuel-using industries in the United Kingdom, such as cement, glass, ceramics, steel and so on, will be penalised because they are generating carbon dioxide in their process, only to substitute imports of those same products that will certainly produce more CO₂, not only because of the long-distance transport, but quite often from the processes as well, as this country has often gone a bit further in more efficient processes than some import substitutes. So that, too, is an area that we need to look at very carefully.

On the car industry, I would like to expand a little on the intervention. Again, a difficult transition is under way and it can only go at the pace that the customers are willing to let it go. At the moment, as we have been hearing, a relatively small minority of the cars built in this country are full electric cars—something to do with price and range, and people getting used to the idea of the electric vehicle—and so during the transitional period we again have a choice: either we produce the diesel and petrol cars that people still want to buy, or somebody else does that and we end up importing them. Again, I do not think that that is a good course. I would not want to be ahead of some of the other leading car producers in the world in definitely ruling out producing vehicles that still sell well, when we have put a lot of investment collectively into developing more fuel-efficient vehicles, which have much less coming out of the tailgate.

My final brief point builds on one that the Minister eloquently made in certain contexts. We can do a lot more, as the Government are trying to do, with sensible purchasing of our own products. Of course, we do not want to buy products that are less good quality or too expensive. There has to be competition within the UK market to reassure the Government they are getting value, but just as we have always done with things like warships, so we can do for more essential products. We should give the home base the best chance and, if necessary, help people come in as major investors with their factories in order to do so.

[Christina Rees (Neath) (Ind)]

As a former Secretary of State for Wales, I am sure the right hon. Gentleman is aware of the very exciting global centre of rail excellence that is being built in Onllwyn in my constituency. It will be the only testing centre for futuristic trains and infrastructure in the UK. The Welsh Government have put in £50 million. Does he agree that his Government should honour their commitment to put in £30 million, so that it can be finished on schedule by July 2023?

[John Redwood]

The hon. Lady has made her own point very well and I trust Ministers will answer. I have not been privy to the documents on this particular project, so I have no idea how I can answer that and I do not know what the background is to the timing and the opportunity that may be presented. However, in general terms I am all in favour of more opportunities for Wales, as well as for England and the rest of the United Kingdom.

In summary, yes Minister, let us have more of it. Let us have more, cheaper energy produced at home. Let us have more steel, bricks and ceramics produced at home. To do that, it will require some actions, inspired purchasing and the right tax and regulatory regime so that we do not penalise ourselves needlessly over net zero and end up burdening the world with more CO₂ and ourselves with more imports.

[Several hon. Members rose—]