John Redwood
Main Page: John Redwood (Conservative - Wokingham)Department Debates - View all John Redwood's debates with the Department for Transport
(1 year, 2 months ago)
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John Redwood (Wokingham) (Con)
I rise to urge the Government to be careful about rushing to close our factories making diesel and petrol cars before we have established the electrical revolution and are confident that we have created the capacity and the extra jobs in the alternative power system that the hon. Member for Croydon Central (Sarah Jones) is so passionately recommending. I would ask the Labour Opposition, who seem even keener to close our petrol and diesel capacity more quickly, to consider why Germany, with a far larger automotive industry than our own, has decided with the EU to delay the ban on the sale of new petrol and diesel vehicles to 2035 rather than 2030, and also why Germany thinks it needs to make provision for the possibility that it can make cars that work on synthetic fuels or some derivative of hydrogen as an alternative to the battery system as a way of getting to a low carbon output. Germany might not be wrong. I think that we will discover as a country that it is much easier to close factories and terminate the production of petrol and diesel cars than it is to get those much-wanted electrical factories into operation, with all the supply chain that that requires.
Wera Hobhouse (Bath) (LD)
Is the right hon. Gentleman not making an important admission that although the EU has delayed ending the manufacture of combustion engines, there are important exemptions in that those cars should be run only on synthetic fuels and sustainable fuels?
John Redwood
I have said that the EU was keen to explore the synthetic fuel opportunity. In the meantime, it is not recommending the closure of traditional vehicle factories at pace. Indeed, the EU has recently required of its member states that they should not only speed up the roll-out of electrical charging points—which will clearly be needed if people are to buy more electric cars—but roll out the provision of hydrogen refuelling places, not synthetic fuels. It is probably easier to deal with synthetic fuels, because a good synthetic fuel that is liquid at normal temperatures can be used in the usual distribution system, using the sunk assets that already exist in the petrol and diesel system. Indeed, one of the ways to introduce synthetic fuels more easily would be to gradually increase the proportion of synthetic fuel mixed into traditional fuels, as we have with E10 petrol and as is being talked about for sustainable aviation fuels, where there are target percentages for the introduction of lower carbon ingredients in the fuels.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I am very much a supporter of synthetic fuels. I think they will have a role to play in the years moving forward. Can the right hon. Gentleman tell us what emissions synthetic fuels will emit from a combustion engine compared with the current fossil fuel equivalent?
John Redwood
That is to ask, “How long is a piece of string?” A variety of these fuels are being produced in trials in small quantities. They need to have all their characteristics explored, then people will decide which ones give the best green output for the lowest cost for scale-up.
The whole House needs to get better at carbon accounting. I hear from all sides that unless we go for battery cars, we will not meet our net zero targets. I am suggesting that there may be other ways of getting closer to net zero targets through other types of fuels. I also do not quite understand why so many people in the House think that getting people to buy electric battery cars today helps us with our net zero targets. Let us take the example of a well-off person who decides to replace their petrol or diesel car with an electric battery vehicle. They have enough money to be able to afford one—they are quite expensive—and they are also fortunate in that they have a driveway or personal garage and can pay to have a charger put in at home. They realise that they will always be able to get there and back for short and medium distances without having to rely on unpredictable and rather scarce public charging systems, so they are ready to go. When they get home and recharge their car on the first night, however, there is no extra renewable electricity to send to them. We use every bit of renewable electricity every day, whether or not the wind is blowing, because it is given priority so, when the car is plugged in overnight, a gas power station will probably have to up its output a little to supply the electricity. Far from helping us to meet our net zero target, that new electric car is probably increasing the amount of electricity that has to be generated from fossil fuels.
I have read a number of studies that attempt to get to the truth of how much of a contribution, or detriment, getting more people to switch to electric cars might make to reducing world CO2, and there are rather different answers because the calculations are very complicated. I am more persuaded by the people who do total-life-of-vehicle calculations. We need to recognise that more CO2 is generated in producing a typical electric car, including the battery, than in producing a petrol or diesel car. Mining all the metals and minerals needed for the battery and battery production is particularly intensive, and more CO2 could be produced to deal with the waste when the battery reaches the end of its useful life and needs to be replaced, which is an expensive and complicated task.
To beat running a petrol or diesel car for a bit longer, a person running an electric car would need to do a very high mileage and would need to make sure that every unit of electricity used to charge the vehicle is generated from zero-carbon sources. At the moment, it is very clear that none of these requirements has been met. Although I can understand why we need to encourage people to go on this journey to build up the fleet of electric cars, against the day when we generate more zero-carbon electricity, we must accept that, in the short term, it is probably bad news for the world’s CO2.
I am worried that we may be in danger of not achieving our main green objective, at the same time that we are spending a lot of money on a subsidy war with other countries that are similarly desperate to get battery production. I am also very worried that the UK, Europe and, to a lesser extent, the United States of America are so behind China in putting in battery manufacturing capability, and so behind China in doing deals with world suppliers of critical minerals and battery components, that it places us in a very vulnerable industrial position, which is why both the European Union and the United Kingdom are having difficulties ensuring enough value added in electric cars to meet our own criteria. That is a common and shared problem, and the solution is not easy because we need to leapfrog 10 years, or whatever, to get to the point at which we have control over the minerals, the raw materials and the production of batteries so we can meet those criteria.
I am also very worried about how customers are left out of most of these debates. They are taken for granted and, when they do not behave in quite the way that politicians would like, politicians invent taxes, subsidies and bans to say, “Well, we are going to make you choose a car you would not have chosen for yourself, because we do not think you are making the right choices.” I would rather live in a world in which the hugely talented motor industry, and all the skilled scientists and technologists who help it, work away at producing cars that are better, more affordable, safer, higher quality and meet our service requirements so that we willingly buy the electric or synthetic fuel alternative, rather than sticking to petrol or diesel vehicles. We are not there yet, as we can see. The proportion of people wanting to buy electric cars is still a minority, despite all the very aggressive advertising, promotion and political weight behind them. Part of that is affordability, part of it is range, part of it is the worry about refuelling and part of it is uncertainty about battery life and repair. There are many complicated decisions when trying to make such a big switch in product availability, and people have come to like their traditional petrol or diesel vehicle. They have the measure of those vehicles and think they provide a very good service. As a country, we should not get too far ahead of our electorates and consumers.
If we look at the fast growth of electric car sales, from a very low base, we will find that it is much more concentrated in the business fleet market than in the personal choice market, because companies feel under more of a moral imperative to buy into this idea, which I have just exposed as somewhat odd, that these are super-green vehicles, whereas individuals say, “But it is not affordable, it is not practical and it is not what I want.”
Gavin Newlands
Does the right hon. Gentleman accept that the reason why fleet purchases are now massively outstripping personal purchases is the tax incentives given to fleet purchases, whereas the incentives for private purchases have all but disappeared under this Government?
John Redwood
The hon. Gentleman makes a very good point, and it is an additional reinforcement, but I think fleet buyers are also very conscious of the environmental requirements.
I stress that, for this to work, it has to be a popular revolution. Millions of people have to decide for themselves, having listened to the arguments and seen the products, that green products are better than the old products, and in some cases they very clearly are and people will rush out to buy them. If we are still in a world in which people are not of that view, we can subsidise, tax and lecture all we like, but people will not change their mind.
One of the ways in which businesses and people could get around any attempt by this Government or a future Government to ban all sales of new petrol and diesel vehicles in 2030, when the rest of the world is not doing so, is that people will set up businesses to import nearly new petrol and diesel cars from places that still sell them and make them, to sell them as second-hand cars on the UK market. I do not believe anyone is suggesting that we ban the sale of second-hand diesel and petrol cars, as that would immediately remove all the value from our cars, meaning that we are prisoners—we either run the car until it falls to pieces or we lose its value and are unable to make the changes we would normally make.
There will have to be a definition of what is a new car, and it will presumably have something to do with how long ago it was made and/or how many miles it has on the clock. Whatever the definition, there will then be a good opportunity for people to sell cars that are four months old, rather than three months old, or that have 3,000 miles on the clock instead of 500 delivery miles. There would be a nearly new market, but the cars would all be imports, because people here would try to obey the law.
I urge all politicians to remember that they cannot just lecture, ban, tax or subsidise people into doing things unless the product has an underlying merit that people can see. Can we please work with the industry to prove that underlying merit? And do not ban things in the meantime, because Britain will lose jobs and factories. We cannot save the electric vehicle until the electric vehicle saves itself.
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.
John Redwood
Does the hon. Gentleman have any thoughts on how the Government should go about replacing all the lost petrol and diesel taxes if electric vehicles take off?
Gavin Newlands
I am not sure I heard the right hon. Gentleman’s question correctly. Would he mind repeating it?
John Redwood
My point is that if we achieve a big switch to electric cars, the United Kingdom will lose a huge amount of petrol and diesel tax. How should we replace that lost tax revenue?
Gavin Newlands
That is a very astute intervention. I did not pick up that he said the word “tax”, so apologies for asking him to repeat the question. It is a fair point. I am a member of the Transport Committee and we worked on a report about that a while back. The elephant in the room is that we will have to look at something to replace the current form of taxation. The SNP does not have a policy on whether that is road pricing or whatever, but we have to have that conversation and we have to have it now. We all know that revenue at the Treasury is already an issue, and will become an ever-increasing issue every year, so we have to have that debate sooner rather than later. I rather suspect we will not hear much about it before the election, but after the election that debate will have to begin in earnest.
Of course, in an independent Scotland we would have control of the same fiscal and tax incentives that have encouraged those huge levels of electric vehicle uptake in countries such as Norway. The Department for Transport’s poor record on EV charging is a glaring obstacle on our path to decarbonisation. When compared to some of our European counterparts, the deficiencies in our charging network are stark. We must acknowledge that reliable and widespread EV charging infrastructure is essential to encourage the adoption of electric vehicles and reduce carbon emissions from the transport sector.
Scotland’s approach to rapid EV charging infrastructure is an example of what can be achieved. The SNP Scottish Government have made huge strides in expanding the EV charging infrastructure, with one hand tied behind their back. The network has grown from 55 charge points in 2013 to over 2,500 charge points in 2023. In fact, the latest figures, published in July by the DFT, show Scotland has 72.7 chargers per 100,000 people, which is around 40% more per head than English regions outside London, and 19.2 rapid chargers per head, which is nearly double London’s figure of 10.7.
The lack of rapid charging infrastructure in many English regions, and much of Northern Ireland, makes charging a postcode lottery and hampers the transition to EVs, leaving residents without reliable options for charging their cars That imbalance is not only detrimental to our environmental goals, but exacerbates regional disparities. One would think addressing those imbalances would be a priority for a Government who have been talking about levelling up for quite some time.
The challenges facing the industry are multifaceted and require immediate attention and action. Brexit’s disruptive influence, unresponsive Government policy and the internal strife within the Tory party are hindering our efforts to tackle climate change and transition to a sustainable future.
The Scottish Government have led the way on transport decarbonisation, from the EV incentives and charging infrastructure I have talked about and decarbonising our railways at twice the pace of the UK Government, to many times more electric buses per head, funded, bought and actually on the road, those 21 and under travelling free on those same buses, and the gulf—the chasm—in investment in active travel. We have shown what we can do despite the dead hand of Westminster, so just imagine what we can do when that hand is removed by independence.
Mark Pawsey
The hon. Gentleman makes a good point and I will make some remarks on that issue in just a second.
The view about the need to support our move to net zero, and the steps that we need to take, are very much mainstream. The environment is still a top issue, and a rising issue among people in the country more generally. It is in the top five when people are asked about issues facing the world. Climate change is consistently there above poverty, war and migration. Therefore, there is an increasing acceptance of the need for change, but the question is over the pace of change. Back in 2017, our date for ending the sale of conventional petrol and diesel-powered vehicles was 2040. In the BEIS Committee report, we called for all new cars and vans to be truly zero emission by 2032, bringing the target forward eight years. As a Member of Parliament with an interest in UK auto-manufacturing and close to businesses that were involved in it, at the time we prepared the report five years ago, I was concerned that bringing the target forward was too ambitious. I was really bothered that it would put our UK-based manufacturers at a disadvantage because I believed they would struggle to electrify the UK-manufactured heavier and larger cars. However, it soon became clear that manufacturers such as Jaguar Land Rover were willing to move faster, with Jaguar very soon to become an all-electric brand. We now have the date set at 2030.
Having set that date, and with the good news that we have had recently of BMW’s investment in the Mini plant at Oxford, and the manufacture of all electric products at Ellesmere Port, it is vital that the Government stick to the 2030 date. There are voices making the case for relaxation, but Ministers and the Government should stand firm because what industry needs is some certainty.
To take up the point of the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), I accept that there is a case about the high cost of electric vehicles, compared with those powered by an internal combustion engine. In many cases, the new vehicle is something in the order of £10,000 more expensive on a like-for-like basis. Interestingly, many manufacturers— I have in mind Volkswagen—are bringing out new models, rather than electrifying the existing model range, to avoid a direct comparison. Of course, the higher purchase price can be offset by lower running costs. The electricity costs less than petrol or diesel where the price is inflated by the addition of fuel duty. There will be lower servicing costs on the electric vehicle as a consequence of their having fewer moving parts. However, I accept that, for some people, the higher cost is an obstacle.
As we have heard, some countries are further down the road in the manufacturing of EVs, with a range of new models ready to come into the UK. I have in mind China, which, according to many industry watchers, has up to 10 new brands to launch in the UK by the end of the decade. Although they will be less expensive than UK or European-produced products, they will not be as attractive to the consumer because they will not possess the brand and heritage, which is a big part of the value. UK manufacturers will have to take on this competition and, in many cases, that will mean, as they already are, focusing on higher-quality, more upmarket models. That means that, when we look at the performance in the UK, it will be as important to focus on revenue derived from sales as on units sold.
John Redwood
The danger is that China will try to acquire some of those brand attributes. After all, China owns MG, does it not?
Mark Pawsey
I accept that point, but Chinese manufacturers are intending to bring to the UK a load of brands that are anonymous and bland and they will not have the same attractiveness to the consumer.
On the incentives to acquire an electric vehicle, in recent years, there has been a cash grant to offset the extra cost of an EV. That now stands, I think, at £1,500 towards a vehicle costing less than £32,000. One way the Government could make a change and provide a reason for many private buyers to buy EVs is to level the playing field between private buyers and company car users. We have already heard that company drivers benefit from favourable benefit-in-kind rates, which means that they can save hundreds of pounds each month if they choose an EV over an internal combustion engine. One reason that employers are keen to encourage that is that they make savings on employers’ national insurance contributions. That is why many of the EVs on our roads are company cars. An increasing number of companies are also offering salary sacrifice schemes as a method of getting staff to switch to an EV. It would be beneficial if the parliamentary authorities were to launch such a programme in Parliament as a way of getting MPs and staff here to consider making the change.
On electrical vehicle charging, in our Select Committee report, we spent a lot of time considering charging infrastructure. We know that, in addition to the higher capital cost, range anxiety is a key reason drivers will not switch. Frankly, I hope the Minister will accept that the picture here is less rosy, with public charging in particular failing to keep pace with increasing numbers of electric vehicles.
I got a sense of the challenges when the most recent motorway services opened at junction 1 of the M6 at Rugby in 2021. At one point, because of the lack of power infrastructure, it looked as though the site would open with only two charge points. It was a real challenge to get enough power but, fortunately, good work by the site operator and the power network enabled 24 charge points to be available at the opening. Thanks to additional provision since 2021, there are now 40 charge points at junction 1 of the M6 at Rugby. It is a great place for people to stop in the middle of a long journey across England.
Too often, chargers are busy or are not working. I happened to notice a letter in The Times today from a driver of an electric vehicle, who recounts that he restricts his round trips to his battery’s limit of 240 miles and takes public transport for longer journeys. In fact, he questions—perhaps with tongue in cheek—whether that is the Government’s intentional strategy. Clearly we will not achieve the transition we need if every electric vehicle has that issue.
I appeal to the Minister to intervene with my local authority. Warwickshire County Council is providing public charge points but is allowing anybody to park in front of them for as long as they like, so someone who has identified a vacant charger via the app may get to a site and find a diesel internal combustion engine-powered vehicle occupying it. That seems absolutely crazy. I ask the Minister to put pressure on local authorities to ensure that parking in front of public EV chargers is available only to electric vehicles, and that they move off once they have finished charging.
A further issue for many EV drivers is that charging at a public site has a higher cost than charging at home. I suspect most EV drivers expect to pay more for using the facility and for charging faster, but I do not know how many realise that they are paying 20% VAT, compared with just 5% at home. That is why I supported the campaign by the motoring journalist Quentin Willson to reform VAT and equalise the charge.
We spend a lot of time talking about battery manufacture; in fact, the Business and Trade Committee is conducting an inquiry into it. The conventional thinking is that because a battery represents 40% of the value and weight of an electric vehicle, assembly will migrate close to where the batteries are manufactured. West midlands MPs, including me, have been calling for the development of a gigafactory at the Coventry airport site, adjacent to the traditional heart of UK automotive manufacture. I very much welcome the investment coming to Somerset from Tata Sons, with 40 GW of capability, but it is well accepted that we need 100 GW to keep business operating at the same level. To achieve that, we will need one more gigafactory, or maybe two. I very much hope that that will happen in the midlands, at the Coventry airport site.
Five years on from our Select Committee report, automotive remains an important sector and a major contributor to the UK economy. The transition to EVs presents real opportunities for manufacturers, the supply chain and the associated sectors. The one thing I know from my business career is that businesses need certainty. Having embarked on change for all the right reasons, the Government must maintain their course and create the climate for further growth in future years.
Wera Hobhouse (Bath) (LD)
It is a pleasure to follow the hon. Member for Rugby (Mark Pawsey). I echo him in urging the Government to stick to the 2030 target—a point that I will make in my speech.
The climate emergency will not go away. Surface transport is responsible for nearly a third of the UK’s carbon emissions, and more than half of surface transport emissions come from private cars and taxis. The electric vehicle transition is therefore vital. The 2030 target to end the sale of new petrol and diesel vehicles is an important tool to bring us towards decarbonisation. It gives the industry the certainty for which it so often asks, and it has worked: sales of EVs in the UK are exceeding expectations, according to Chris Stark of the Climate Change Committee. That gives us confidence that the 2030 target is achievable, proving all the naysayers wrong. Reports suggest, however, that the Government have been tempted to cut the “green crap” and that they will water down this important target. The permanent fear that the UK Government will go back on their word weakens our automotive industry. A tough target is better than persistent U-turns.
We Liberal Democrats have consistently encouraged the automotive industry to embrace the future and to transition from petrol and diesel to electric cars. We need a Government who are equally committed and who will not be derailed by their Back Benchers. I am very pleased that BMW will build the new electric Mini in Oxford; it is a significant investment that demonstrates the economic opportunities. I am even more excited that Somerset will host a new gigafactory for battery production. Those are important milestones on which we must build.
We now need a longer-term strategy to truly grow the industry. Transport & Environment UK is worried about how much of the more than £800 million in the automotive transformation fund has been spent. It is concerned that wider investment cannot be maintained without expensive subsidies. Uncertainty around the zero-emission vehicle mandate and the lack of an overall industrial strategy add to those concerns.
The Government have a poor track record when it comes to building electric vehicle supply chains. The collapse of Britishvolt was a staggering blow. When he was Chancellor, the Prime Minister said that Britishvolt
“will produce enough batteries for over 300,000 electric vehicles each year”.
Now Britishvolt will produce none. Mistakes were made at the company, but was there really nothing that the Government could have done to prevent the loss of such an important business?
If we are to build an EV industry in the UK, we must ensure that there is enough demand. The Government must support manufacturers as global players. As we have heard, a clause in the UK Government’s Brexit deal means that at the end of this year, British-made EVs will face tariffs of up to 22% when exporting to the EU if they do not contain 40% local content. That puts UK manufacturers at a huge disadvantage. I would like to know what the Government, rather than overblowing the perceived Brexit benefits, are actually doing about an acute issue that is putting the future of motor manufacturing in the UK at great risk.
Although the sales targets for commercial EVs are very encouraging, private uptake of EVs is proving more difficult. We have heard many of the reasons for that, but the main barrier for potential private buyers, apart from cost, remains charging anxiety. So far, EVs are not a realistic option for householders who cannot park or charge their cars outside or near their homes. In last year’s EV infrastructure strategy, the Government made no firm commitment that infrastructure roll-out would rise in line with EV market uptake. Recent Government statistics show that only 19% of all chargers are rapid chargers. That is a problem for long-distance travel: people cannot be expected to wait for hours to charge their car when they are on the go.
We Liberal Democrats would invest urgently to speed up the installation of rapid charging points throughout the country. Rapid chargers must be installed where people will use them. Motorway service stations must therefore be the No. 1 priority, but we must consider other locations, too.
John Redwood
Is the hon. Lady also worried that there is a lack of cable capacity under our streets and of grid capacity to get the power to those fast chargers? How long will that take to resolve and how will that be done?
Wera Hobhouse
I share the right hon. Gentleman’s concerns, which is why we consistently make the case for upgrading the grid. That is one of the most important things for getting to net zero in the UK, not just for vehicle charging, but for the roll-out of all the electric infrastructure we need for our many renewable energy installations. I share his concern, but the solution is not to stop the roll-out of electric vehicles; it is to improve the grid and get things sped up as quickly as possible.
If, for example, electric charge points are installed in places where non-electric vehicles park, such as in lamp posts or bollards, valuable charging space will be lost. We Liberal Democrats would give grants to parish and town councils to install charging facilities where they will actually be used—for instance, at village and community halls.
It is important that the Government do not stop the incentives for EV uptake. They must stop penalising people who cannot charge their EVs at home. Drivers currently pay 20% value added tax to use a public charge point, compared with 5% VAT for home charging. That unjustifiable discrepancy must end and the VAT rate for all electric vehicle charges must be equalised at 5%.
Electric vehicles will drive us down the road to net zero. Infrastructure and incentives will be vital. What we need is a Government who are willing to fuel this transition, rather than being content to trundle along in the slow lane.
Bill Esterson (Sefton Central) (Lab)
Over the last few months, I have—high vis and hard hat at the ready—been blown away by the possibilities in our automotive industry, but I have also felt the force of the headwinds facing the sector, including EU rules of origin, high electricity prices in manufacturing, the slow roll-out of EV charge points, the shortage of gigafactory capacity, delays to the zero-emission vehicle mandate, and, of course, the continuing fallout from the way in which the Conservatives crashed the economy this time last year.
The fact is that it is only through a partnership with Government that our vehicle manufacturers can achieve lasting success in a world where new technologies offer opportunity, and competition from new participants such as China is more of a challenge than ever. That is what other countries are doing—other countries that are ahead of us in the low-carbon transport transition race.
I mentioned my recent visits. I saw the pride of the Stellantis workers at Ellesmere Port, where they produce electric vans for Peugeot, Citroën and Fiat, as well as for Vauxhall, and where they want to expand production to be able to export, as they told my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) and me just a few weeks ago. I saw the ingenuity on display at the Jaguar Land Rover research and development facility at Gaydon, and JLR’s “Reimagine” project and commitment to all electric across a number of its brands. Then there is ULEMCo in my constituency—please look it up—which has pioneered the use of hydrogen as a drop-in fuel to existing internal combustion engines to cut emissions while full hydrogen options for combustion and fuel cells are being developed.
Those, and many more, are examples of the amazing potential in this country. However, they are all examples in which uncertainty must be addressed to ensure that our automotive industry can thrive. The honest truth is that we are in danger of squandering the advantages that we have in vehicle manufacturing. UK motor vehicle production levels have fallen by 37% since the Conservatives came to office in 2010—one of the largest falls in vehicle production of any country. Eight in every 10 cars produced in the UK are exported, yet exports of cars manufactured in the UK fell by 14% in 2022. The Faraday Institute estimates that the UK will need 200 GWh of gigafactory supply by 2040. Other countries are on track, but we are off the pace. The news of a gigafactory from JLR is, of course, very welcome, but it does not address the demand from the rest of the industry.
We still have the cautionary tale of the failure at Britishvolt as a reminder of the precarious nature of gigafactory development. The problem of the lack of gigafactory capacity is repeated with EV charge points: the Government target of 300,000 charge points is set to be missed by at least a decade. Meanwhile, parking bays for vans are often inaccessible at charge points. The UK has no equivalent to the plans in Germany for dedicated commercial vehicle charging every 60 km to 100 km. Speaking of commercial vehicles, where are the plans for hydrogen refuelling for larger vehicles that will use hydrogen combustion or fuel-cell technology?
Reliance on imports of batteries is directly linked to the question of local content and how UK-produced vehicles will be able to compete in export markets. From next year, a 10% tariff will apply to cars and 22% to vans when rules of origin are exceeded. That will, during a cost of living crisis, also push up prices for consumers who buy imported vehicles. Stellantis wants to expand the electric van production that it showed my hon. Friend and me. It wants to employ more workers and export its new pride and joy to the EU, but to do so, it needs to qualify for local content rules, which will not be ready in time for the looming cliff-edge in a few months’ time. Stellantis, Ford and JLR have all called for a delay in the implementation of new rules of origin to give them time to comply.
The Minister of State, Department for Transport, the right hon. Member for Hereford and South Herefordshire (Jesse Norman), who will wind up, said that he could not comment on negotiations. Indeed, the Minister for Industry and Economic Security, the hon. Member for Wealden (Ms Ghani), who introduced the debate, said the same thing. But industry is not asking Ministers for a running commentary; it is asking them to say that their objective is to support the request and ensure that it can continue to compete in its biggest export market.
Then, there is the ZEV mandate. The Government said that they would introduce the mandate by January next year. Decisions are taken many years in advance by investors, so regulatory certainty is critical to inform decision making. Motorists need to know whether they should buy another petrol or diesel car, or go hybrid or full electric. Is 2030 still the date for the end of the new petrol and diesel car production, as the hon. Member for Rugby (Mark Pawsey) quite rightly mentioned in his speech? I would like to hear about that from the Minister. Companies are having to second guess the Government, as are consumers.
The lack of a plan for ZEV, for rules of origin, for charge points and for commercial vehicles is an example of the indecision that characterises this Government. It does not have to be this way. Our long-term approach, working as partners with businesses and unions through our industrial strategy, will give investors and consumers the certainty that they want. That is how our competitors operate, and it is how this country needs to work, too. Our clean energy plans and our green prosperity plan will deliver the cheap, clean energy that will help to lower the cost of motoring and unlock the capacity for electric vehicle charging. Our support for hydrogen is also essential for the transition to low carbon for road vehicles that need an alternative to electricity. Labour’s new gigafactories will allow the UK’s automotive industry to source components locally, avoiding tariffs for exports to the EU by addressing the challenge of rules of origin. And we will work with the EU on a plan that avoids the cliff edge of the Prime Minister’s damaging export tariffs, which, with just 100 days to go, are looming large. We will also address the skills gap and the decline in apprenticeship starts—a decline of 170,000 a year since 2017—in part by moving to a growth and skills levy.
Labour’s plan will deliver precisely because we have drawn it up in partnership with the sector.
Bill Esterson
I will not, because Madam Deputy Speaker has, quite correctly, been very strict in the time she has allocated.
Labour’s plan will lead to the creation of 80,000 jobs in our industrial heartlands. Our plan will power 2 million electric vehicles and add £30 billion to the UK’s economy. We will accelerate the roll-out of charging points and give motorists the confidence to make the switch. We will have binding targets for electric vehicle chargers that will, like carbon budgets, be binding on the Government. We will ensure that local areas have the support and investment that they need.
Labour’s plans for energy generation are inextricably linked to the transition to low-carbon road transport. Our plan to make the UK a clean-energy superpower by 2030, with net-zero carbon electricity, will deliver capacity and lower energy costs for UK manufacturing. Those costs, including electricity costs, which are 62% higher in the UK than in Germany, are a barrier to our competitiveness. The motor industry and motorists are being let down by this Government. They are being let down on the ZEV mandate; on rules of origin and local content; on the slow progress of gigafactories and EV charge points; and on energy prices. Above all, they have been let down because of the damage done by 13 years of Conservative mismanagement of the economy, which culminated in last year’s disastrous mini-Budget. All of that has led to the further let-down of high interest rates, which are higher than in competitor countries.
The industry wants the roadblocks and the let-downs to be removed. I will leave the last word to Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, who just this morning wrote about the uncertainty around the ZEV mandate, charge points and gigafactory capacity. He said:
“A comprehensive package of measures would encourage households across the UK to go electric now, boosting an industry slowly recovering from the pandemic and delivering benefits for the Exchequer, society and the global environment.”
I could not agree more. With Labour’s industrial strategy, Labour’s green prosperity plan and Labour’s partnership with industry, our automotive sector will be turbocharged to deliver success.
John Redwood
At the moment, if a new EV is added to the charging system, it will be a gas power station that has to fire it up, so it is not a net zero product. When will we be in a position to have enough renewable power so that, if an electric car is added, it will be recharged with renewable power?
Jesse Norman
An economist of my right hon. Friend’s distinction will know that it is futile to predict the activity of private markets, because they so often move faster than we would imagine. A classic example of that is the way in which electrification has moved up the range and weight curves over the past few years. It is certainly true that at the moment, electric vehicles rely on fossil fuels for part of their charge, meaning that they are less green than they will be when those fossil fuels are removed from our electrical charging system. Nevertheless, those vehicles remain significantly lower-emission over their life cycle than equivalent petrol and diesel vehicles, including the production and disposal of batteries.
Capacity-building projects for important areas of our connected and autonomous vehicle supply chain are already starting to take place. This country remains one of the first to explore the business case for connected and autonomous mobility as a mass-transit solution. Connected and autonomous mobility will be the future; it will be an electric future, a zero-emission future, and one that is powered by the investments and leadership being provided now, with the private sector, by this Government.
Question put and agreed to.
Resolved,
That this House has considered the UK automotive industry.