Protecting Steel in the UK
Jonathan Reynolds Excerpts(10 months, 4 weeks ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I beg to move,
That this House recognises the need to decarbonise steel production; appreciates the pride that local communities have in their historic steelworks; regrets that the Government has pushed through plans for decarbonising steel in the UK which will result in thousands of steelworkers losing their jobs and risk leaving the UK as the first developed country in the world without the capacity to produce primary steel; further regrets that the Government has failed to produce an industrial strategy which could have included a plan for the whole steel sector; believes that primary steel is a sovereign capability and is therefore concerned about the impact that the Government’s plans could have on national security; also believes that steel production can have a bright future in the UK; therefore calls on the Government to work with industry and workers to achieve a transition that secures jobs and primary steelmaking for decades to come; and further calls on the Secretary of State for Business and Trade to report to Parliament by 27 February 2024 with an assessment of the impact on the UK of the loss of primary steel production capabilities.
Labour has secured this debate today because this is a hugely important issue. It is important not just because the future of the Port Talbot steelworks is integral to communities across south Wales—I know that many hon. Friends will be making that case passionately—but because it speaks to a much bigger challenge that we face as a country: how to decarbonise heavy industry in a way that is effective for our climate objectives and fair for our communities.
The Opposition believe that the Government’s push to decarbonise the steelworks at both Port Talbot and Scunthorpe, in a way that guarantees large job losses and has no support from the workforce or unions, risks irrevocably damaging working people’s trust in the opportunities the net zero transition could bring. We believe that it is a calamitous mistake for the UK to become, under the Conservatives, the first major economy in the world without the ability to make our own primary steel.
Zarah Sultana (Coventry South) (Lab)
Decades of underinvestment and managed decline have devastated our steel industry, as the news from Port Talbot painfully brings home, but as the Unite the union’s workers’ plan for steel sets out, with the right Government action this crucial industry can still be saved. Does my hon. Friend agree that the Government must invest in UK steel, transitioning Britain’s remaining blast furnaces to fully decarbonised steel production, saving thousands of skilled jobs and putting Britain at the heart of clean, green steel production?
Jonathan Reynolds
I intend to make the case today that the UK steel industry could have a strong future, but that requires a much better approach than the one we have seen so far.
Jonathan Reynolds
I am cautious of doing so given the warning about time, but I will give way as I know my right hon. Friend has a significant interest in this.
Mark Tami
I thank my hon. Friend for giving way. He will be aware that I have the privilege of representing Shotton steelworks, and he has been there with me to see the high-quality products made in that profitable plant, but in order to carry on it needs to recruit and retain quality employees. What we have seen, however, is a Government who do not care, and if that message gets through to the workforce we are not going to retain those skills.
Mr Deputy Speaker (Sir Roger Gale)
Before the hon. Gentleman continues, may I make a point? I understand how this game is played, and interventions are fine, but please understand from the Chair that if Members intervene they are less likely to get called.
Jonathan Reynolds
It was a pleasure to visit the Shotton steelworks with my right hon. Friend last year, and he will know that it began as the Summers steelworks in Stalybridge in my constituency. He has much expertise, and I commend the argument and points he has put forward.
The decisions the Government have made will have consequences. They will have consequences for our national security and our resilience, and they risk leaving us exposed at a time of significant geopolitical instability.
Several hon. Members rose—
Jonathan Reynolds
I will take an intervention from the Government Benches and one more from the Labour Back Benches, if that is okay.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
If the hon. Gentleman is so determined that steel is a resource we as a nation should have, why is the Labour party against the west Cumbrian coalmine, which would mean we would not have to bring in coal from Australia to smelt steel in blast furnaces here?
Jonathan Reynolds
We have considerable expertise in that matter, and that grade of coal is no good for the current way steel is produced in the UK, but the right hon. Gentleman is right to raise the point because the Government justified that coalmine on that basis and have now made a series of decisions that, frankly, makes that look even more absurd.
Today I hope to make the case for Labour’s plans for an alternative way forward, an approach that is in no way based on misplaced nostalgia for the past but is instead based on hard-headed realities and an assessment of our national interest.
UK steel should have a bright future. It is not a sunset industry, and it is central to how a modern, low-carbon economy works. I ask the Minister, for whom I have considerable regard, to listen and engage today and to have a serious debate about what is about to happen and be willing to consider the alternative case. Let us please not trade boilerplate rebuttals or pre-scripted lines, but instead ask all colleagues to listen to the rational case being put forward, which is serious, pragmatic and important and one I genuinely believe any Conservative could agree with.
Anna McMorrin (Cardiff North) (Lab)
Many of my constituents are impacted by this devastating closure, and closing Port Talbot will mean the UK is the only G20 nation unable to make steel. Does my hon. Friend agree that this is an appalling decision?
Jonathan Reynolds
Of course, the decision has to be considered in conjunction with the one in Scunthorpe, and that is why this issue is so important and deserves the attention it is getting today.
I want to say one more thing by way of introduction. We have already heard from several Welsh colleagues, and the decision of the Prime Minister and the Business Secretary to refuse even to have a phone call with the First Minister of Wales about this matter was profoundly wrong. Anyone who is a supporter of the Union wants to see productive, effective relationships across all UK Governments, and the Prime Minister’s behaviour reflects extremely badly on him on this occasion.
The Secretary of State for Wales (David T. C. Davies)
Does the hon. Gentleman realise that I was the chairman of the transition board supporting all those workers who face the loss of their jobs? I offered to speak to the First Minister last week. He has so far been too busy to do so. He has known about this potential problem since September, and only when it appeared all over the papers did he suddenly appear to take an interest and want to make phone calls.
Jonathan Reynolds
I think that is a pathetic response. I mean no discourtesy, but that is pathetic. It is entirely reasonable for the First Minister of Wales to seek a conversation with the Prime Minister of the United Kingdom. I will leave that there.
I acknowledge that in the Public Gallery we have many steelworkers who have made the journey here today, including men such as Alan, who has worked at Port Talbot for 40 years, as did his father and both his grandfathers, and Gary, who has worked there for 37 years, and whose son now works in the hot mill. We have men and women from Port Talbot, Scunthorpe and Trostre who started as apprentices. I want to thank them for the contribution that they and their families have made to the UK over many generations. Last year, I went several times to steel sites across Wales, and I met the workforce at Port Talbot when these plans were first announced. They deserve a lot better than what they are being offered right now. At a minimum, they deserve this place taking their case seriously and engaging with these issues with the respect and consideration they require.
Several hon. Members rose—
Jonathan Reynolds
I can give way one more time, to my hon. Friend the Member for Stockton North (Alex Cunningham)
Alex Cunningham (Stockton North) (Lab)
When I was a young reporter on the Evening Gazette, the steel industry supported tens of thousands of jobs on Teesside alone. The decline started with Thatcher. When the Government abandoned Redcar nine years ago, numbers fell to a few hundred. Steel is a foundation industry. Surely we need primary steelmaking in this country if it has a real future.
Several hon. Members rose—
Jonathan Reynolds
I will take an intervention from the Government Benches, then one from my hon. Friend the Member for Leeds East (Richard Burgon), and then I will take no more.
Mark Pawsey (Rugby) (Con)
Is the hon. Gentleman overlooking the half a billion pounds that the Government will contribute to Port Talbot, or the £1.25 billion in total? When the Business and Trade Committee visited Port Talbot, we saw a plant badly in need of new investment. This Government are bringing forward that investment and securing a future for the steel industry.
Jonathan Reynolds
I am not ignoring that investment; I am making the case that it is a bad deal and that there is a better deal for the resources available that would satisfy far more of our objectives and give a better future to Port Talbot.
Richard Burgon (Leeds East) (Lab)
I grew up, like the shadow Minister, in a region ripped apart by the economic vandalism of Thatcher. Is it not the case that the Tories are repeating the mistakes of the past and claiming there is no alternative, when the reality is that steel jobs can not only be saved, but even created, with a proper plan that takes advantage of the global demand for steel—especially low-carbon, green steel—which is going up fast?
Jonathan Reynolds
I agree with that case. That is why this is such an important issue for Parliament to consider. I always acknowledge that there are parts of it that are difficult. Decarbonising industry is an urgent priority, but in some cases the technology is uncertain or expensive. It is my contention, however, that getting it right is more important than doing it quickly or necessarily at the cheapest cost. To state the obvious, we can decarbonise anything by shutting it down. The cheapest path will likely always involve outsourcing most of our industrial production to other places. If we do that—it is the Government’s plan for Port Talbot—we will spend millions of pounds, and we will see huge job losses and global emissions rise as we effectively offshore our emissions and then claim that is progress. That would be a fundamental political mistake with potentially enormous ramifications for the future of the transition to net zero. We should know that from our own past.
As my hon. Friend mentioned, when I was a child growing up in the north-east in the 1980s, there was a major transition. We saw the end of coalmining and shipbuilding and the old nationalised industries as we knew them then. Many colleagues across the UK have similar personal experiences. Nobody today would propose that the UK should have an economic or energy policy based around large-scale coalmining, but how we manage the transition is fundamental. In the past, as a country, we have got that wrong. Levelling up—supposedly the Government’s flagship policy—is surely a recognition that the scars of those years and the impact of deindustrialisation are still felt in many parts of the UK today, yet the Government risk making exactly the same mistakes all over again.
The decision of this Conservative Government to hand over half a billion pounds of taxpayers’ money to make thousands of people redundant is quite simply a bad deal. It is a bad deal for workers, a bad deal for taxpayers and a bad deal for the future of our industrial sovereign capability. Worse than that, it sends a message that decarbonisation effectively means deindustrialisation. I put it to Conservative colleagues that if net zero becomes a zero-sum game for working people, that risks the very support that we need to achieve the transition. There must be public consent for the transition, and that requires our economy to benefit from better jobs and better opportunities. This is the real politics of getting net zero right: it is not imaginary meat taxes or made-up claims about seven bins but whether the transition is just and fair and delivers something for Britain’s workers. The Government’s plans so far are simply none of those things.
The race to decarbonise is a race for jobs and prosperity, and this could be a hugely significant time for steel. As the Minister knows, I have many criticisms of Government policy, and I believe that we have weak business investment, weak productivity and weak growth as a result. I recognise that the Port Talbot site is in a challenging financial position, but the Government have already recognised that uncompetitive energy prices need tackling. We have procurement rules in place that are seeing significant steel content from the UK in infrastructure projects, and we are getting close to carbon border adjustment mechanisms both here and in the EU, which will be a major development. CBAMs in particular will likely completely change the economics of the UK steel industry. There is no reason to believe that the UK cannot have a vibrant steel sector, so to make this irreversible decision now, when the policy background is clearly improving, seems odd indeed. Better options are on the table; anyone claiming otherwise is simply being disingenuous.
When it comes to Port Talbot, there is a specific alternative proposal available—the multi-union Syndex plan—which is not far off Tata’s original proposals, which were known as Project Kronus. Other proposals have also been put forward. All we ask is that the Government consider the issues involved and do not make any fundamental decisions that are irreversible.
It is widely accepted at Port Talbot that blast furnace No. 5 is at the end of its life and may need to close, but blast furnace No. 4 will not need to be relined until 2032. For the Government to force that furnace to close now, as we await the arrival of new technologies, is an act of economic vandalism. We acknowledge that electric arc furnaces are part of the answer, but we do not want to put all our eggs in one basket, which means being open to all technologies, and especially direct iron reduction, which is one of the most exciting possibilities.
The counter-arguments put forward so far are not robust. I believe that safety issues could be managed in the same way that they are every day at a major steelworks. The claim that 90% of what Port Talbot does could be met with an electric arc furnace does not stand up, as key products in packaging and automotive materials cannot be produced in one. At Scunthorpe, I understand that the lack of sufficient grid connections and the cancellation of the first carbon capture programme back in 2010 have severely limited the options available. Again, I ask the Government not to make irreversible decisions, to be open to all technologies and to recognise the growing importance of and demand for steel.
We are not the only country with these challenges, but everywhere we look, other countries are doing it better. Take the Netherlands, where Tata is in negotiations with the Government on DRI technology; Sweden, with the collaboration between SSAB, Vattenfall and LKAB; Canada, where ArcelorMittal signed an agreement some time ago to build a new green steel plant; or the news just in of a $5 billion investment in a new green steel plant in Saudi Arabia. Everywhere we look, other countries are seeing growth and investment in their steel sector, but we are seeing the opposite. I put the question to Ministers: why is the UK pursuing this path alone?
At Business and Trade oral questions, the Minister has been asked repeatedly—mostly by Government Members—about the assessment the Government have made of becoming the only major economy without primary domestic steel production. Her answers hint that she might get it, but the Government have ploughed on regardless. I ask her again: how can any Government possibly justify making thousands of workers redundant in the name of cutting our carbon footprint only to pay to ship in more carbon-intensive steel from halfway across the world?
It does not have to be this way. We cannot afford to blow this opportunity, repeat the mistakes of the 1980s and leave regional inequality entrenched—we can still see those scars. That is why I always say that, under Labour, decarbonisation will never mean deindustrialisation. I want green steel, and I believe that the workforce are our greatest asset in delivering that. Any real plan for green steel must cover the whole industry. It must be open to all technology that is available, and it should fundamentally be a story of new jobs, new opportunities, new exports and renewed British economic strength, rather than outsourcing our emissions and pretending that that is progress.
Stephen Crabb (Preseli Pembrokeshire) (Con)
The hon. Gentleman is being generous with his time. I came here this evening, as I am sure the workers sitting in the Public Gallery did, to see whether there is a genuine plan on the table from the Opposition. The hon. Gentleman said that there would be, but I have heard nothing specific. I have heard about none of the costs involved. He said that he was not interested in nostalgia, but most of the contributions from Opposition Back Benchers have been exactly that. Where is the credible plan B that people want evidence of?
Jonathan Reynolds
It is literally here in my hands. It is not hard to find. I say to Conservative colleagues that Google is their friend. I have tried to say that the plans are available, but we will be pragmatic and flexible. We are just asking that irreversible decisions are not made that limit the room for manoeuvre in future. On resources, we have earmarked £3 billion of investment from our spending plans to deliver this, all of which is predicated on unlocking much larger sums of private investment. The Government do not disagree with the case for putting money in, but the deal that they are putting forward for that half a billion pounds does not deliver very much at all. What a tragedy it would be in the future to find a Britain that is building homes and infrastructure again, with secure low-carbon energy generation and a new wave of floating offshore wind, but is not making the steel to provide those things.
Labour has a plan to build a better Britain, and we want to build it with steel made in Britain. We will only get one opportunity to get this right, and we must bring workers and steel communities with us. I will finish with what Gary Keogh, a steelworker from Port Talbot told me:
“The question for Tata and the UK Government is this—do we want to be a nation that makes goods, or a nation that imports them from heavily polluting countries? It is not too late for Tata and the UK Government to think again and change course, but time is…running out. If they fail to take a different path now, the people of South Wales will never forgive them, and history won’t forgive them either. There is so much at stake for all of us.”
Well said, Gary.
I am asking the Minister—quite honestly, I am begging her—to consider the arguments and what is really value for money, and not to make decisions that are irreversible and prevent a far better outcome in future. To Britain’s steelworkers, I say that I know how desperate things feel right now and how angry people are, but there are those of us who get it, who understand what this industry is and why it is important. Given the opportunity, we will deliver the future for steel and the right transition that we all know is essential for our future prosperity, security and wellbeing.
Ms Ghani
My hon. Friend is a staunch champion of her constituency and she highlights the lack of any sort of sensible plans from the Opposition. They do not want stuff coming in or going out. They will not even support the transition, and they would go harder and faster as well.
Closing the Port Talbot plant would cause immeasurable damage to the town and would be harmful for the UK as a whole, risking all 8,000 jobs that Tata Steel provides across the UK, not to mention the 12,500 jobs in the steel supply chain. That is why the Government are investing £500 million of a total of £1.25 billion towards securing the future of Port Talbot’s steel, and an industry that is inextricably linked to the community’s history and identity. That investment is a huge step forward, fortifying UK steel production at a time when traditional blast-furnace steelmaking has stopped being viable.
We have heard loud and clear the calls from the unions to keep one blast furnace open for several months during the transition. Tata held discussions with the UK Steel committee and its advisers on this very issue. In response to those concerns, Tata Steel has revised its proposal and continues to operate Port Talbot’s hot strip mill throughout the transition period and beyond. However, its position remains that continued blast-furnace production is neither feasible nor affordable, and the risk is that we would lose steelmaking at Port Talbot. An electric arc furnace provides us with greater resilience and the ability to absorb shocks in the global supply chain by reducing our dependency on raw material imports. Quite simply, UK steel will be ready for whatever the future holds with state-of-the-art modern equipment.
Just as crucially, the transformation is pivotal to the Government’s ambition to position the UK at the forefront of the growing global economy. Alongside the UK’s proposal for the Celtic freeport and the land at Port Talbot, which Tata expects to release for transfer or sale following the transition from blast furnaces, the investment would unlock thousands of new jobs in south Wales and the wider UK economy. I should also remind the House that the Tata Group continues to make significant investments in the UK’s industries of the future, including through its plans to open a £4 billion battery gigafactory in Somerset, creating 4,000 direct jobs. That will be a game changer for this country that will position us to thrive in the decades ahead.
Jonathan Reynolds
I very much recognise the case that the Minister makes for Tata’s investment in the UK, but will she just be clear with the House on whether the subsidy package for Port Talbot that we are talking about is in any way linked to the subsidy package and the decision to build the gigafactory in Somerset?
Ms Ghani
That is just another performative politics intervention—[Interruption.] No, those are completely separate things. We are talking about the future of the steel sector in the UK and in Port Talbot. The discussions have been going on for years. They are discussions that did not take place when the Opposition were in power. They left it alone and the technology has moved on, but what we have been able to do, even though it is difficult, is ensure that steelmaking continues in the UK by providing it with unprecedented levels of funding. There was no plan presented when the hon. Member spoke at the Dispatch Box. We have been able to ensure that steelmaking will continue at Port Talbot.
Understandably, Members might ask why the Government are not working harder to maintain these particular blast furnaces but, as the hon. Gentleman said, they are at the end of their lives and the cost does not work any more, and nor do they meet the needs of customers. I say this again: without the support, there would have been a complete risk of Tata Steel not continuing to making steel in the UK. We know that the 20th-century way of producing steel is no longer fit for purpose for the UK in the 21st century. The UK’s blast furnaces, such as those at Port Talbot, are reaching the end of their operational lives, and a transition from blast furnaces to electric furnaces will also increase our supply chain resilience, making the UK less reliant on imports of raw materials for steelmaking.
British Steel
Jonathan Reynolds Excerpts(1 year, 1 month ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I thank the hon. Member for Scunthorpe (Holly Mumby-Croft) for securing this urgent question, at what will be a very difficult time for her constituents.
The Labour party supports the transition to green steel. We recognise, as the Government have now conceded, that a blend of public and private funding is necessary to do that. We believe electric arc furnaces are part of the solution, but we do not believe they can be the only solution. Specifically, we believe that the retention of primary or virgin steelmaking in the United Kingdom is a matter of economic necessity and of national security. While we all welcome the return of steelmaking to Redcar, which should never have been taken away to begin with, this will clearly mean very significant job losses at Scunthorpe. I therefore have major concerns about this announcement, coming, as it does, just after the Government have confirmed a deal to also close the blast furnaces at Port Talbot.
First, the Minister said in her answer to her hon. Friend that talks are ongoing. I have to say that that is not my understanding of the current status of this deal. Could she confirm that, please? Secondly, is it true that carbon capture technology could not be pursued at Scunthorpe because of delays from the Government to the necessary infrastructure over the last 13 years and uncertainty about a future business model? In addition, is it correct to say that a DRI—direct reduced iron—solution could not go forward because of uncertainty over the Government plans for green hydrogen, which would obviously be essential for a DRI business model? Thirdly, do the Government recognise the figure of 2,000 job losses, and will the Minister confirm that this is the net figure covering Scunthorpe and Redcar—in other words, that once recruitment at Redcar is taken into account, job losses in Scunthorpe will likely be in excess of 2,000? Finally, will she confirm how much public money this announcement involves?
Most of all, I reiterate to the Minister that decarbonisation cannot mean deindustrialisation; we cannot simply outsource our emissions to other countries, call that progress and expect public support for the transition. A real plan for green steel must be open to all technologies, it must be industry-wide, and it should be a story of new jobs, new opportunities and British economic strength. Sadly, this announcement seems very far from that.
Ms Ghani
Negotiations are indeed ongoing, which is why I am limited in what information I can put out in the public domain; information is of course incredibly sensitive. British Steel will make commercial decisions, but if it is hoping to secure Government support, we need to make sure that we are getting value for money for taxpayers.
The hon. Member asked why decisions have been taken on the electric arc furnace compared with other technologies. It is because the other technologies just cannot come up to speed fast enough. In particular, the hydrogen-based direct reduced iron equipment just cannot enable furnaces to transition at the speed at which they need to. He is very much aware of that, and this is also a challenge in Europe, not just in the UK.
Fundamentally, there are a number of challenges for the global steel sector. First, there are energy costs, which we have done everything we can to provide support for, with the hundreds of millions of pounds to cover energy costs and now the supercharger. Secondly, we have to ensure that we get more UK steel into the UK economy. That is why the public procurement note was incredibly important for us to do, and we will be able to secure millions of pounds for more UK steel projects. Thirdly, there is a major challenge in that advanced manufacturers, customers and consumers are looking for greener steel, and a lot of companies are trying to reflect on how they can provide a green steel option. Having said that, it is a particular kind of steel; as I said to my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft), for me that means a mix of virgin steel in the market as well. Of course, these are commercial decisions, but we need to make sure there is a mix to deliver for the UK market in particular.
The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) talked about the environmental issues and about hydrogen. We export a lot of scrap steel, and that also has a carbon footprint, so for us to have the capacity to turn that steel into products we can use will be incredibly useful. The positive news is that we are the eighth largest manufacturing country in the world. We are going to need more steel, not less, but there will also be demand for more green steel, not less, and we are trying to ensure that we provide support to the steel sector so that it can meet those market needs.
Tata Steel: Port Talbot
Jonathan Reynolds Excerpts(1 year, 3 months ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
After 13 years of failure, expectations of this Government are not high, but even by their standards, spending half a billion pounds to make thousands of British steelworkers redundant is a truly remarkable feat. Last week, I went to Port Talbot to meet some of the workers affected by this announcement, and like us, they support green steel. They have actually been campaigning for green steel for many years, and those workers were promised repeatedly that they would be a part of the process. They rightly feel betrayed by this announcement and the fact it is being done to them, rather than with them.
I know the Minister will come back to say that more jobs were at risk. I have heard the Government’s line that all the jobs would have gone entirely, but she must be honest: it is absurd even to countenance the UK being the first major economy not to have a domestic steel industry. The UK steel sector is already much diminished compared with when the Conservatives came to power. The transition to green steel should be about more jobs, not less. It should be an optimistic, exciting moment for steel communities, but instead this has caused anxiety and anguish. I say genuinely to Government Ministers and to all on the Conservative Benches that if they allow decarbonisation to become associated with Thatcher-style job losses, it will risk the legitimacy and political support for net zero in a way that courts disaster. Is levelling up not a tacit admission by the Conservative party that the scars of the 1980s deindustrialisation cut so deep that we still feel them today?
Why were the workforce not involved in this process? Why has only one technology—the electric arc furnace—been chosen? What consideration was given to hydrogen and carbon capture possibilities? We already know that this deal was not the company’s opening proposal, so what other options have been considered? Crucially, what will happen to downstream facilities, such as Trostre and Llanwern, that provide packaging and automotive steels that cannot currently be served by an electric arc furnace? Will that steel be supplied from India, with a larger emissions profile than at present, which is what many of the workforce believe?
What is included in this package as regards ongoing industrial energy costs? Crucially, when will a grid connection for an arc furnace be provided? In addition, how will this £500 million of taxpayers’ money be protected? In the absence of any clear and identifiable criteria, how do we know that it represents good value for money? Finally, what does this announcement mean for the rest of the UK steel industry and, in particular, Scunthorpe?
The plan that Labour put forward for green steel was industry-wide, comprehensive and transformative, and it was designed to secure major economic dividends for the UK. We cannot secure the future of UK steelmaking with sticking plasters. We cannot do it on a plant-by-plant basis, and we cannot do it without the workforce behind us. This should have been such a positive announcement. It should have been about creating jobs, strengthening national capabilities and showing that we can do decarbonisation in a way that works for working people. I say to every single steelworker out there that it is clear that they will only get the bright future that they know is out there when they get a Labour Government.
Ms Ghani
It is unfortunate that the hon. Member decided to politicise such an important sector. It was not me but Gareth Stace for UK Steel, the trade association for the UK steel industry—the voice of the country’s steel manufacturers—who said:
“This is a really important day for our steel sector in the UK, with the Government showing a real commitment to the future of steel making here in the UK. We will get a true transformation of our sector to create steel for the net-zero economy, something which our customers are asking us for. We have the ability to completely transform our sector and boost the net-zero economy in the UK. We can really seize the opportunity to increase production in the UK and increase exports. We all know that a net-zero economy will need more steel, not less.”
The hon. Member is putting on a very poor display over a serious decision that has been in discussion, I am told, for more than a decade. I have spoken to Ministers who have held the portfolio over many years before me, and they tell me that these matters are nothing new.
More importantly, the hon. Member knows that the blast furnaces were at the end of their life. The right decision is to provide certainty, security and continuity, and that is exactly what we are doing. The UK is a world leader in producing steel, but we need to decarbonise, and this is the best way of ensuring and guaranteeing jobs, of which there are 8,000 on the site and 12,000 in the supply chain.
As well as the £500 million, £100 million has been put together for a group to consult and work with the unions, the staff, the Welsh Government and the Secretary of State for Wales to ensure that the transition is as appropriate as it can be and not so challenging for the people who are impacted. The proposal is to go for electric because other energy sources are underdeveloped. If the hon. Member will reflect on what is happening in Europe on hydrogen, for example, he will see that nothing else can work at this scale and within the tight timeframe that we want to work in to ensure that the site continues to be viable not only for manufacturing steel in the UK and supporting all the jobs in the supply chain but to support Wales, too.
The proposal will also transform the Welsh community and the Welsh area. A huge amount of work is taking place with the freeport, and a huge number of businesses and jobs will be coming out of the transformation to green steel. It is unfortunate that the hon. Member cannot recognise that, without this decision, there would have been continued uncertainty, no security for the staff and definitely no security for the UK steel sector.
Tata Group Gigafactory Investment
Jonathan Reynolds Excerpts(1 year, 5 months ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I thank the Minister for advance sight of the statement.
Anyone who cares about and has knowledge of the automotive sector knows how important these battery factories are to the future of the UK. Without batteries being made here, it is unlikely there will be a long-term future for automotive production in this country, and for too long the UK has been far behind where we need to be. Therefore, everyone should welcome this news and breathe a huge sigh of relief that we finally have a positive development. In all the urgent questions, debates and statements we have had, this is what we have been calling for.
However, this relief should also come with the humility to appreciate that there is still a great deal to do. If this factory proceeds as planned, the UK will have 66 GWh of capacity by 2030, but at that point Germany would have over 300 GWh, Hungary over 200 GWh and China over 6,000 GWh. I therefore hope there is resolve in Government to make sure that this is just one of several major announcements of this kind. Of course, to secure this investment a substantial amount of public money has had to be spent. The Minister did not actually reference that. Can she provide some clarity on the media reports we have seen about how much exactly that will amount to?
This approach of using public investment to leverage in a much greater degree of private investment is the approach that we have advocated in Labour’s green prosperity plan. Government Ministers have at times publicly disagreed with this proposal, but we always knew they were in talks that involved the same approach. I therefore put it to the Minister that it would be far better to set out that Government approach openly, transparently and honestly in order to attract more potential partners and be able to negotiate from a stronger position. Some might call this an industrial strategy, because the truth is that the UK was desperate for this announcement. If it had gone to another country, such as Spain, things would have looked very bleak indeed. That is why we are all so relieved, but that is not, if we are frank, the optimum negotiating position to find ourselves in.
Can I also ask the Minister about local content? Crucial to our future success is building up a domestic supply chain for these factories. Will the Government be specifying a minimum percentage of local content required by this factory in order to receive the generous subsidy that has been agreed? In addition, will the Government be encouraging the development of advanced battery chemistries in the UK to aid domestic job creation, but also to limit any risks from geopolitical events that have the potential to disrupt supply chains in future?
We also need to consider this announcement alongside the wider policy environment for automotive in the UK, specifically the rules of origin requirements under the trade and co-operation agreement and the Government’s phase-out of internal combustion engines from 2030. Even with this welcome announcement, these timescales look incredibly tight. I do not believe anyone can seriously countenance a 10% tariff on vehicle exports to the EU, which would be the outcome of failing to meet the rules of origin requirements. Can the Minister update us on progress towards a deal?
Can the Minister also update the House on the Government’s position on the 2030 phase-out timetable? Is she aware of concerns that maintaining that timescale without sufficient domestic production effectively means only Chinese vehicles stand any chance of meeting consumer demand in the short term? Surely we should be thinking holistically about the whole sector. It is not about a different level of ambition, just a query as to the best way to get there.
Finally, can I ask the Minister about industrial energy prices? So much of the transition to net zero requires more competitive industrial prices than the UK currently has. We know that has been and is a material factor in the deal, so can the Minister say whether a precedent has now been set that will have consequences for other sectors, such as steel, if deals are struck for their decarbonisation? In conclusion, I repeat my welcome of this announcement. I welcome the Government’s conversion to Labour’s way of thinking. I hope it is a sign of many more good things to come.
Dominic Raab (Esher and Walton) (Con)
I warmly welcome the Government’s decision and the announcement by Tata, which highlights the UK’s tech potential—
Automotive Industry
Jonathan Reynolds Excerpts(1 year, 5 months ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I beg to move,
That this House recognises that the automotive industry is the jewel in the crown of British manufacturing and believes it can have a bright future creating good jobs for people across the UK; regrets that after 13 years of Conservative neglect the UK risks losing this world-class industry, putting thousands of jobs under threat; condemns the Government for its lack of an industrial strategy and the negative impact this has had on investment in the UK’s automotive sector; calls on the Government to urgently resolve the rules of origin changes which are due to take effect in 2024, working with partners across Europe to negotiate a deal that works for manufacturers; and further calls on the Government to adopt an active industrial strategy to build the battery factory capacity needed to secure the automotive sector for decades to come.
It is a real pleasure to open this debate on an issue that I know is close to the hearts of many colleagues and constituents. Many Members present represent some of the most iconic names in UK automotive production. For me, it is very much an issue of huge personal significance. Sunderland, where I grew up, is of course renowned not just for its wonderful football team but for the tremendous success of the Nissan plant. I am very proud to say that many friends from my childhood still work in that plant. Of all the great businesses that I get to visit, that is one of my absolute favourites, and I know that colleagues will feel just as strongly about the parts of the automotive industry that they and their constituencies are associated with.
That industry is full of skilled and committed workers, innovation, export success and huge growth potential. However, we have called this Opposition day debate because even the most ardent defender of the Government could not fail to be worried about the health of the sector as it stands. The British car industry should and could be booming, as should the wider automotive sector, yet production has slumped by over a third under the Conservatives. There are huge concerns about a series of major policy failures, including domestic battery production facilities, trade barriers post Brexit, and higher energy costs and other supply chain issues. Although this is an Opposition day debate, I know that those concerns are shared widely across the House, and I hope that, by having this debate, we are able to express the clear political commitment of this House to that crucial sector.
Mark Tami (Alyn and Deeside) (Lab)
My hon. Friend will be aware of the world-class Toyota engine plant in my constituency that produces the highest-quality hybrid engines—one of the first plants outside Japan to do so. Does he agree that hybrid is part of the solution, not, as the Government think, part of the problem?
Jonathan Reynolds
I do not know whether I am supposed to declare an interest, but I drive a Toyota hybrid myself—I have a large family and have to get between Manchester and London, and that is a pretty sound option for doing so. I am aware of the issue that my hon. Friend raises, as is the shadow Transport Secretary, my hon. Friend the Member for Sheffield, Heeley (Louise Haigh). We must be careful to ensure that there is certainty so that that transition we are all seeking can happen. I know that there are particular issues relating to that sector and that side of the industry. We are alert to those issues, and we will, of course, work with him, his constituents and the expertise in this country and beyond to ensure that that timescale is done properly. For many people seeking to make the transition—we are seeing a huge response from the public on that—that is the option that is currently available, particularly for families. We must bear in mind that the solution has to be something that works for all our constituents, and we must be cognisant of their concerns. I am grateful to him for raising that point at this stage of the debate.
I worry at times that the Government, and maybe especially the Secretary of State for Business and Trade, do not have a great deal of time for industry at all. Artificial intelligence, tech and financial services are all crucial sectors, but we should not for one moment think that there is no role for industry. Nor should we ever believe that there is a false choice between services and manufacturing. Support for the automotive sector is not nostalgia. Many of the plants that we will talk about in the debate are the lifeblood of their communities, providing good work and good wages. However, just as in other crucial industries—steel is another good example—I get no sense that securing the long-term future of the sector and managing the transition to a low-carbon economy are priorities for the Government.
That is not just the view of the Labour party; it is what industry itself has been telling the Government. Mike Hawes of the Society of Motor Manufacturers and Traders said at its recent conference:
“We…need a…response urgently”.
Stellantis has warned that:
“If the cost of EV manufacturing in the U.K. becomes uncompetitive and unsustainable, operations will close.”
The automotive industry faces a series of challenges that must be taken seriously. The rules of origin, which are due to come into force from January next year, will require 45% of a vehicle’s value to be made in the UK or the EU or a 10% tariff will be imposed that will destroy most profit margins entirely. Of course, those requirements increase significantly over time. We have a lack of progress on battery manufacturing; Germany already has 10 times the battery-making capacity of the UK. We have wider business challenges, including the highest industrial energy costs in the G7, and rising inflation and borrowing costs.
However, what we have seen from other countries is that none of those challenges is insurmountable. Other countries are pulling ahead. China is home to numerous battery giants such as CATL and BYD, while the United States famously has Tesla. But the EU has also ramped up battery production through initiatives such as the European Battery Alliance and how has 35 battery factories in place. In contrast, the UK is yet to develop a robust battery manufacturing sector, which makes us heavily reliant on imports and risks the long-term presence of automotive production in this country.
I think we all recognise that, over time, vehicles will be built where the batteries are made, not the other way around. We will never be able to match the sheer fiscal firepower of the US Inflation Reduction Act, but we do have advantages—competitive advantages on workforce and skills, and on research and development—and if we had a Government with sufficient political commitment, the future could be very bright indeed.
Gareth Johnson (Dartford) (Con)
Last month, I visited the new Caterham Cars production plant in my constituency, to which the company has had to move because its production is insufficient to meet the demand that it has at the moment. It will take on more employees and apprentices, and it will manufacture more of the vehicles for which it is famous. I remind the shadow Secretary of State that that expansion in the industry has happened under a Conservative Government. Does he welcome that news?
Jonathan Reynolds
I am incredibly happy to welcome that news and the positive story that the hon. Member sets out, but I do not think that any of the success that he has seen detracts from the fact that there are significant policy challenges. The overall number of vehicles has declined, as he will know, and yes, the pandemic and the semi-conductor supply chain issues happened, but that does not remove the need for this House to take seriously the rules of origin, the battery-making capacity and so on. We are not in any way on track. There is also, frankly, the international competitive position. Other countries are simply indicating that they want those industries and that investment much more than we do. It is not so much that the Conservative party has turned up to a gunfight with a knife, but that it is not showing up to the fight at all.
What we need is a plan of action. That is what the Labour party has developed, and it is what we want the chance to implement should we form the next Government. Our plan addresses battery capacity and charging infrastructure, as well as key issues such as planning and grid regulation. We are up front about the challenges that we face, but we are ambitious for the future. Frankly, that is nothing short of what is required. Our plan starts with having an active industrial strategy. I know that some Conservatives do not like that kind of terminology, but I say simply that all countries need an industrial strategy. To go back to the example of Nissan, that was part of an explicit strategy—by even Margaret Thatcher’s Government—to attract automotive expertise to the UK. The absence of any coherent modern industrial strategy is hurting investment into the UK.
Other countries are simply pushing ahead, recognising that the challenges that we are facing have to be met nationally by Governments with skin in the game. Industry is crying out, first, for stability, and secondly, for a partner and some clear policy signals. That is exactly what it will get from a Labour Government. That is why we have said that we would put the new Industrial Strategy Council on a statutory footing, giving some reassurance that the instability of the Conservative years is at an end.
Our green prosperity plan will part-fund the battery-making gigafactories that are so essential to our future. That will be catalytic public investment to unlock the much greater sum of private investment we need. The reality is that no battery factory in the world has been developed without that kind of Government commitment. We know that the Government are in talks with some firms about potential investment decisions, and I say in good faith to Ministers, “That is good. We want you to succeed.” Where those companies need assurances from the Opposition should a change of Government occur, we will of course have those talks. However, it would be far better and a far better deal for the taxpayer to make those offers publicly, and to be negotiating with a range of potential partners to get the best deals for Britain, because domestic battery production is so important.
Mike Amesbury (Weaver Vale) (Lab)
Could the shadow Minister clarify how many gigafactories this Government have enabled to be built in the UK?
Jonathan Reynolds
I am more than happy to. My hon. Friend will know that we currently have one facility, which is the Envision facility at Nissan in Sunderland. The overall number will depend on how big those factories are, but broadly we will need three to four in the interim, and by 2040 we will need eight to 10.
Germany, for instance, already has four to five gigafactories up and running. A further four are almost up and running, and it is in talks for a further advance on that position. The sense is that Germany is genuinely 10 times ahead of us in that capacity, and while people might think, “Well, Germany is a country with incredible automotive history, reputation and strength”, there are other countries that we are already losing out to. Spain, for instance, has a very active industrial strategy when it comes to the automotive sector, and eastern Europe has had tremendous success in that area. Because automotive is about regional markets, simply seeing what other countries are doing will have huge consequences for the potential for investment in this country. Crucially, we should be playing to the UK’s strengths in areas such as research and development, like the fantastic programmes at the UK Battery Industrialisation Centre in Warwick, which my hon. Friend the Member for Sheffield, Heeley and I were able to visit recently.
Jonathan Reynolds
I thoroughly agree—the scale of ambition that I see around the world daunts me when I compare it with this Government’s ambition. There are some incredibly exciting technologies out there, including sodium-ion batteries that would reduce our dependence on lithium and almost certainly cut costs in battery production. Hydrogen is clearly going to be extremely exciting, as are fuel cells, and there are markets for off-road vehicles that could be huge potential markets for the UK. We should also not forget buses: that is an area in which new technology could contribute to things like cleaner air, as well as better transport.
Greg Smith (Buckingham) (Con)
Does the shadow Minister agree that on top of battery innovation and hydrogen innovation, the UK is leading in another field: that of synthetic fuels? However, giving the automotive sector a really strong future in this country involves a whole-system analysis, not just of how the vehicle is manufactured but how the energy that will run it is manufactured. That involves looking again at the zero tailpipe standards that are coming in, because if we have that whole-system analysis, we will get to green technology and greener transport but with a whole-picture effect.
Jonathan Reynolds
I agree with part of what the hon. Gentleman has said. I agree about the whole-system analysis: many parts of the decarbonisation journey that industry will need to take on will be a much bigger question than simply unplugging one form of old fossil fuel technology and plugging in another. For instance, the steel industry will have to think about scrap if it is to make the conversion to electric arc furnaces; and if we are to move towards synthetic fuels, we will clearly have to look at where the feed stocks are coming from.
However, one of the most defining features of the past 13 years—I say this without any kind of partisanship—has been a series of very ambitious targets from this Government in areas that relate to decarbonisation, but with no real means to deliver them. That target is then pulled away, and confidence in the British state to decarbonise falls apart. I am thinking particularly about the famous “cut the green crap” comments from the former Prime Minister, David Cameron, regarding home insulation. When we talk about changing existing Government policy, we should not underestimate just how little confidence the international business community has in this Government’s promises at times. Broadly, the approach has been very ambitious targets but with no means to actually deliver them, which undermines the case.
Barbara Keeley (Worsley and Eccles South) (Lab)
My hon. Friend is making a very effective speech. As he is talking about targets, will he come on to the roll-out of charging points? My constituency has three motorways in it and incredibly high levels of pollution. We need to remove all the barriers, both to net zero and to reducing that pollution. Does my hon. Friend agree that constituencies in the north such as mine need that situation addressed? It is shameful that, as I understand it, more chargers were installed in Westminster this year than across the whole of the north of England. We in the north have those issues of pollution, and we need to move faster in addressing them. My hon. Friend may be planning to come on to that point, but it is an important one.
Jonathan Reynolds
I am incredibly grateful to my hon. Friend for making those points. The approach of the Front Bench—from her, from me on industrial policy, and from my hon. Friend the Member for Sheffield, Heeley on transport policy—must bring those two things together. We need the policies in place that will make this country a world leader in the production of vehicles and ensure that it also works for consumers. She raises the fact that there are more charging points in Westminster—I know my hon. Friend’s constituency, which is not far from mine—and the difference between comparable parts of this country, north and south, in the level, density and availability of chargers is unthinkable, let alone in comparison with Norway, for instance. Not only do we not have enough chargers but grid, maintenance and connection issues often mean they are out of order. I absolutely assure my hon. Friend that when we as a shadow Cabinet and a potential Government think about these issues, both vehicle production and consumers are paramount. Clearly, consumers want to purchase electric vehicles—that is the growth part of the market—but too often we do not have the infrastructure in place. It cannot be some form of novelty. I have driven electric vehicles around Greater Manchester when it was something of a novelty—I could get access to chargers and, at times, preferential parking spaces near Deansgate, which is no small thing—but for mass market usage, neither the policies nor the infrastructure are yet in place. That needs to be widely recognised.
On the international trade position, it was always imperative to have a domestic battery industry, but it has become an existential issue because of the Government’s approach to our trading relationship with the EU. As discussed in relation to regional export markets, eight in 10 vehicles made in the UK last year were exported, so it is widely recognised that the impending cliff edge in the trade and co-operation agreement with the EU on rules of origin is a serious challenge to the future of the sector in the UK. The Government have been far too slow to realise the scale of that danger, and while they may promise that a deal is coming soon, I am afraid that “soon” cannot come soon enough. Major UK manufacturers including Stellantis, Jaguar Land Rover and Ford have all warned that a failure to reach a deal would cost jobs in the UK.
It has been two and a half years since the trade and co-operation agreement was formally signed. That is precious time that could have been used to plan and prepare, but those are two words that this Government often fail to understand. What have they done in that time? They have not secured investment in battery capacity. They have not improved our relationship with our biggest export market, and they certainly have not worked with industry to find solutions.
We know that a breakthrough is needed, and we would use our plans to make Brexit work to ensure that the rules of origin work for British manufacturers. We cannot achieve a compromise without working with our partners in Europe, and I believe that only Labour can be that good-faith partner. Our plan to invest in battery capacity, alongside compromises on the rules of origin, is the sensible way forward to meet our climate objectives and trade obligations and retain our industrial base.
We will make the UK a clean energy superpower by 2030, with net zero carbon electricity lowering costs for the UK car industry by no longer leaving UK industry prone to the volatility of international gas prices, alongside better grid connections and planning reform to ensure that “made in Britain” does not become a thing of the past. That is the prospectus for action we need. Right now, this country needs some optimism. The mantra of this Government—that this is as good as it gets—is as depressing as it is wrong.
Jonathan Reynolds
I think those companies must have seen the opinion polls and are wondering whether a Labour Government are coming, if there is as positive news as that could be. I would simply say to all Conservative Members that, on any aspect of industrial policy, there is too often on their side a desire to pick individual stories or statistics and try to pretend that substantial and significant issues do not exist. If we talk to anybody reasonably objective in this sector, they will point out—on battery production, rules of origin, charging infrastructure, industrial energy prices—that there are real challenges and they require some serious engagement from the other side, which to date has not been forthcoming.
Matt Western (Warwick and Leamington) (Lab)
I would like to add to that comment—my hon. Friend is making an excellent speech, by the way—what was said at the industry conference held by the Society of Motor Manufacturers and Traders a couple of weeks ago. The industry was speaking as one, and I am afraid it was critical of the Government, saying, “All these years on, remember that Baldrick at least had a cunning plan. Sadly, the Government don’t.”
Jonathan Reynolds
I followed that conference very closely—my hon. Friend the shadow Transport Secretary spoke at the conference, and I have spoken at that conference in the past—and that was absolutely the sentiment. Perhaps humility does not come easily to Conservative MPs, but I ask them to take on board those genuine views from the industry on the situation we find ourselves in.
The automotive sector could be a practical illustration of the transition to new jobs and new opportunities that we all want to see. We have laid out our plan for the sector. Some Conservative colleagues may disagree, but let us have from them some alternative proposals, because the status quo will not do. Our motion is a plan to deliver £30 billion in economic growth in the parts of the country that need it most. It is a plan that could create 80,000 additional jobs—good jobs of the kind that people can raise their family on. It is a plan for Britain that would mean we once again lead the pack and feel confident for the future. I believe the choice is clear—a plan under Labour or further decline under the Conservatives—and I think we all know whom the public would prefer behind the wheel.
Ms Ghani
He could have gone further.
I saw at first hand the cutting-edge future mobility research being done in Coventry, the birthplace of British motor manufacturing. While in Coventry, I also had the opportunity to attend the Advanced Propulsion Centre to discuss how we can build on the success of our existing R&D and capital investment programmes. During the visit I met year 6 pupils from Templars Primary School in Coventry who attended the Advanced Propulsion Centre’s STEM day. That is a prime example of outreach activity to inspire the next generation of automotive engineers.
We cannot talk about the automotive sector without thinking about the broader supply chain and one of my particular passions, critical minerals, which I am surprised the hon. Member for Stalybridge and Hyde did not spend more time discussing. He missed out the key point of what is needed to produce electric vehicles. We know that China dominates the EV market, partly due to its grip on the supply chain. It controls much of the mining of crucial raw materials, and 80% of battery making for EVs is controlled by Chinese firms. It is also the world’s top car exporter.
I am not sure whether the hon. Member has had time to read Ed Conway’s recent book, “Material World”, which makes some key points on lithium. We know that reserves of the metal are concentrated in a handful of nations. In his book, he said that lithium reserves are concentrated in “a handful of nations”, so that “while the rest of the world panics about China’s dominance of the battery supply chain, many in Beijing are simultaneously panicking about China’s reliance on the rest of the world’s raw materials.”
We know that an EV car battery contains 40 kg of lithium, 10 kg of cobalt, 10 kg of manganese and 40 kg of nickel, and that is before we consider the graphite that goes into the anode. Those materials have to come from somewhere, which is why we updated our critical minerals strategy in the “Critical Minerals Refresh”—[Interruption.] That was a positive noise from the hon. Member—to ensure we were supporting the sector through the whole supply chain. I encourage colleagues to read Ed Conway’s book. I am not on commission, by the way; it is just a good read.
The hon. Member for Stalybridge and Hyde talked about not having a strategy, but we are working with industry to make sure it can plan for the future. To do that, we had the “Critical Minerals Refresh”, which came from the integrated review. We are making sure that we are focused on batteries and the EV supply chain here in the UK. Recent good news that the hon. Member also forgot to mention is the joint venture between British Lithium and Imerys, announced on 29 June. That is a massive boost to the critical minerals supply chain in the UK.
By the end of the decade, the development of Cornwall as the UK’s leading lithium hub will supply enough lithium carbonate for 500,000 electric cars a year. To help secure the supply of critical minerals, the Government have not only refreshed our critical minerals strategy, but put in place a task and finish group to work with industry so that it can highlight its particular vulnerabilities and we can provide it with the confidence and resilience it needs in its supply chains.
Most recently, I visited Indonesia, where I met Indonesian Ministers to emphasise that the UK has a lot to offer on critical minerals, particularly in relation to private finance, environmental, social and governance capabilities, and mining services. I also visited key mine sites and met companies that are critical in the battery supply chain and in critical mineral production, including some innovative UK companies showcasing the best of British—I know that sentence would be hard for the hon. Member for Stalybridge and Hyde ever to put on the record.
This year, I have also visited South Africa, where I represented the UK at the Minerals Security Partnership ministerial meeting and confirmed the UK’s intention to host the next such meeting during London Metal Exchange Week in October. I also visited Canada, where I signed the UK-Canada critical minerals statement of intent and launched our critical minerals dialogue with Canada, forging a key partnership with one of the most important global players in the critical minerals ecosystem. The hon. Member will want to have a moment to reflect on and applaud our work internationally and domestically on critical minerals.
Ms Ghani
So many—too many to list right now.
We also need to look at battery recycling. We want to create a regulatory space that supports the appropriate treatment of EV batteries. The Department for Environment, Food and Rural Affairs is currently reviewing existing UK batteries legislation and working at pace to publish a consultation in the second half of 2023. We have also funded the Faraday battery challenge, which has enabled research into the safe and efficient segregation and repurposing of EV battery cell components. Altilium is exploring how to recover the critical metals from old EV batteries and process them effectively so that they can be reused in new batteries. Reblend aims to develop the core processes and capabilities for a UK-based automotive battery recycling industry that can recover cathode materials from production scrap and end-of-life automotive and consumer batteries for reuse in automotive batteries going forward. We are not only trying to get close to host countries and make sure that we are mining ethically, but seeing how we can ensure that we are recycling batteries.
The Minister of State at the Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire, will touch on a few issues about the zero-emission vehicle mandate, so I will quickly touch on rules of origin. To support the transition, we must not only champion innovation but address all barriers to trade with partners and markets all over the world. Our closest trading partner is of course the EU, with whom we share not only climate goals and a trajectory towards electrification, but deeply integrated supply chains. More than 50% of cars manufactured in the UK and exported are destined for EU consumers. For those reasons, I am working closely with the industry to address its concerns about planned changes to the rules of origin for electric vehicles in the trade and co-operation agreement between the UK and EU.
Since signing the deal, unforeseen and shared supply chain shocks have hit the auto industry hard. That has driven up the cost of raw materials and battery components, making it harder to meet the changing rules. That risks industry on both sides facing tariffs on electric vehicles at a crucial time in the transition to electrification. I am determined to seek a solution to this shared problem and will work with the EU to fix it for 2024. The Prime Minister has raised the issue directly with European Commission President Ursula von der Leyen, and I and other Ministers are engaging with our EU counterparts. We will continue to work closely with industry to address any and all blockers to the electric transition so that our great UK auto industry continues to benefit from access to global markets and UK consumers have the best possible options as we make the switch to electric vehicles.
I wanted to touch on hydrogen, but I believe I am running out of time. I was also going to reflect on success in the aerospace sector, which is very much linked to the automotive sector, but I will not because I can see that you would like me to conclude, Madam Deputy Speaker.
Ms Ghani
Well, I think the mood of the House is to be more positive about the automotive sector. I could list even more stories, but I will conclude because I believe that Opposition Members would despair about all the positivity about the automotive sector that we could talk about and reflect on.
We are home to more than 25 manufacturers that build more than 70 different vehicles in the UK, all of which are supported by 2,500 component providers and some of the world’s most skilled engineers. It is incredibly important to reflect how difficult it has been for the automotive sector globally, but of course we have huge success stories here in the UK. In 2022 we exported vehicles to more than 130 different countries and built more than three quarters of a million cars, with the onwards trajectory rising year on year. This is a healthy sector going above and beyond not only to reskill and upskill, but to meet net zero targets.
The Government are supporting the UK automotive industry, and the sector is a stalwart example of innovation and dynamism to the rest of the world. It is a great sector to get into, whether someone joins it as an apprentice or even by taking on a regular job. Of course, there is more to do. There are more opportunities to secure as we transition to zero-emission vehicles and we realise the potential of connected and autonomous mobility. We have already achieved a great deal in partnership with this fantastic sector, but we are determined to do more. We work with the sector—we do not sit in Westminster coming up with plans that we then U-turn on—and that has given the sector the confidence it needs to continue to invest in the UK. The job of those representing the sector is to praise, promote and protect, not to talk the sector down.
Richard Thomson
I share my hon. Friend’s concern. [Interruption.] There is some sedentary chuntering—if the hon. Member for Bosworth (Dr Evans) gives me a chance to respond to the intervention, I will gladly give way to him if he has a substantive point to make. We can still see the industrial scars of the devastation reaped by the sudden closure of the Linwood factory in 1981. What we do not see quite so readily but is still every bit as debilitating is the impact on families who lose opportunities to participate fully in the economy. There is a very high price associated with getting this wrong, which goes far beyond simply not seeing factories on greenfield sites.
The motion speaks about a lack of a meaningful UK industrial strategy, which is a fair accusation. It calls for the need to
“urgently resolve the rules of origin changes”
that are looming in 2024. At this point, I am bound to observe that both Labour and the Conservatives make grandiloquent promises about how each would seek to harness the power of the British state to transform the economy and, with it, the lives and opportunities that follow. For the two years in every three over the last century that the Conservatives have had power, or the one year in every three that Labour has had power, neither has done that.
I mentioned the various iterations of Conservative industrial strategy; I have read Labour’s industrial strategy, which carries the signature and many photographs of the hon. Member for Stalybridge and Hyde (Jonathan Reynolds). In many ways it is a very fine document, but when it comes to the impact of rules of origin, as with much else, a position promising to make Brexit work means absolutely nothing. I say this as gently as possible: Brexit can never be made to work, either in its current form or in any conceivable variant. As long as making Brexit work is part of the strategy, no matter which party it belongs to—Labour or the Conservatives—it will be left with a slow puncture.
Richard Thomson
I was coming to the end of my remarks, but I will give way since I mentioned the hon. Member.
Jonathan Reynolds
I understand the strength of feeling on that point and how, when we have this conversation, many will revert to that Brexit argument. However, I ask the hon. Gentleman to recognise not the political case but the economic one: we have the lowest business investment in the G7 under this Conservative Government. We want to provide a stable platform for that investment to increase in gigafactories, R&D, hydrogen and all the things we want to see, but reopening that debate—and the independence debate—is not the stable way to realise those opportunities in future. If we spend all our time doing that, we will find that other countries get to a point that we will never be able to catch up with, because we did not focus on the real opportunities at hand.
Richard Thomson
I thank the hon. Gentleman for that intervention, but I could not disagree more. This is not a stable platform. The Conservatives are offering us the stability of decline, and it seems that Labour is embracing that for fear of frightening its former voters in the red wall. It seeks to get them back not with honesty, but by telling people what it thinks they want to hear. It should have the intellectual honesty to recognise that the real debilitating impact on securing future growth opportunities is not from the issue he mentions, but from the barriers that have been imposed. To hear that Labour intends to further padlock them in place will depress a great many people the length and breadth not just of Scotland but, looking at opinion polling, far beyond.
I regret to say that although the motion contains many fine words—it is certainly a fine document in many respects from Labour—while it remains saddled to the Brexit the Conservatives have given us, it will not do anything to tackle the fundamental problems it diagnoses.
Dr Luke Evans (Bosworth) (Con)
I rise to speak in this debate because it is called “Supporting the Automotive Industry”. With the sense of humility that the Opposition asked for, I read the motion. It states:
“this House recognises that the automotive industry is the jewel in the crown of British manufacturing and believes it can have a bright future creating good jobs for people across the UK”.
Then it falls apart, because it states that it
“regrets that after 13 years of Conservative neglect the UK risks losing this world-class industry”.
I thought, gosh, as a matter of humility, have I missed something? What have the Opposition been talking about that I have so obviously missed? So I thought I would do a quick search on Hansard to see when the automotive industry has been talked about. The Leader of the Opposition, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), has mentioned it once since 2015, and that was when he was quoting my right hon. Friend the Member for Surrey Heath (Michael Gove) confirming that the automotive sector was ready for Brexit. The shadow Secretary of State for Transport, the hon. Member for Sheffield, Heeley (Louise Haigh), has never uttered the words “automotive industry” in Hansard. To be fair, the shadow Secretary of State leading the debate, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), has mentioned it six times, so once every two years, which is really useful to note.
Jonathan Reynolds
I am sorry, but that is not credible. Was the hon. Gentleman in the Chamber for the urgent question when Britishvolt, the flagship automotive battery policy, fell apart? Was he there when Stellantis gave evidence to the Select Committee or when we asked two urgent questions? On both occasions, the Government objected to us using Parliament to raise those important issues, so I am afraid I do not find his position credible.
Dr Evans
That will lead me on to what I want to talk about, which is the positive side of this. Britishvolt wanted to have its headquarters in my constituency, and I met it to see what would happen. The Government protected £100 million of British taxpayers’ money. If that had gone to the wrong place, the shadow Secretary of State would have been at the Dispatch Box lambasting the Government for frittering away taxpayers’ money, so I will take no lectures on that point.
I am here to talk about the positive side of the automotive industry. In the east midlands, we are very proud of what we have to offer in the manufacturing industry. It has been through a tough time for the past 50 or 60 years, but we are making real progress. Only recently, Bosworth was noted as a net zero hotspot and described as
“connected areas with concentrated net zero activity, where businesses create jobs and add to the local hotspot’s economy”.
That means better paid jobs, better opportunities locally, better local businesses and, nationally, 840,000 jobs. Within that context, the average wage for someone in the industry is £42,600, compared with the national average of £33,000.
What does that look like in reality on the ground? That is what I want to spend a few minutes talking about. On Monday, I was at a place called Horiba MIRA. For those who do not know it, imagine the silicon valley of the automotive industry. Imagine the Google complex of anything to do with the car industry. From designing to manufacturing to testing, it all happens in this one space. It is unique in the world in what it can do. It was supported by Government from 2010 all the way through, with investment to grow as an enterprise zone, and was then allowed to flourish and attract international investment from the likes of REE, an Israeli company, bringing hundreds of millions of pounds in and bringing 300 jobs with it.
That is just a start in describing what is going in the automotive industry. I agree with those on both sides of the House who have said that this really is a revolutionary opportunity. Everyone in the world is trying to work out the best way to take it, and the best way is to support our research going on right here, including in happening in my constituency. MIRA Technology Park has over 600 high-value jobs, with specialisms in anything from autonomous car driving to battery technology, road safety and defence. Those technologies are all being tested right here in the UK. In November 2022, Horiba MIRA’s assured connected autonomous vehicle testing won the test facility of the year prize at the Vehicle Dynamics International awards, based on innovation in products, teams and technology. In June 2023, MIRA won an award from Jaguar Land Rover at its seventh annual global supplier excellence awards, demonstrating outstanding achievements in JLR’s global supply based on
“customer love unity, integrity, growth, impact.”
That all sounds very good, but when I ask my constituents whether they are aware of what is going on in our constituency, they do not really know what MIRA is. That is part of why I am so pleased to speak in this debate, because actually the UK is fantastically good in this space. It is not just about creating jobs—at MIRA, someone can go from being an apprentice all the way through to a PhD level qualification on cyber-security in cars. It is also innovating for the future to get to net zero and create energy security. It has been partnered by local enterprise partnerships, investment zones and the Midlands Engine to help drive investment, change policy and bring inward investment from the international community.
On Monday, I was very proud to welcome the president of Horiba, Mr Horiba. We saw two things: the research it is doing with Ceres on hydrogen battery technology to allow us to have battery technology in houses and vehicles; and driving simulators. If someone wants to break into the industry and is designing a car, they can now use a simulator to test how it will handle, what it will look like, and how it will feel in terms of comfort and safety. All that can be done simply in a computer-generated room, which takes out the need to make 50 to 100 prototypes and collapses it down to about one or two. But Horiba does not just have dark rooms with TV screens—there is an entire race track to test every single condition one can think of that a car might need to go through. That is right here in our country, leading the world on the international stage on how to bring in investment. I am really pleased that we can talk about that.
There is more in my constituency. We have Triumph Motorcycles. For those who do not know, Steve McQueen leapt away on a Triumph motorcycle. James Bond was seen going over the rooftops on a Triumph motorcycle. I am very proud to have Triumph Motorcycles’ headquarters in my patch, creating over 1,000 jobs. In the last three years, it has broken records for the number of bikes it has sold, which has gone up by 30% across the world. All across America and into Latin America, it is breaking into the industry and the market. That means high-end innovative jobs designed and manufactured right here in my constituency. This is the kind of thing that Members on both sides of the House are not good enough at talking up and talking about. That level of innovation and finishing makes a huge difference to my local community.
I want to mention two other businesses. Flying Spares, based in Market Bosworth, is a second-hand remodelling firm for cars such as Rolls-Royces. If someone need a part, it will ship it anywhere across the world. That is an innovative way of creating longevity and helping achieve net zero by recycling our high-end products. JJ Churchills is a fantastic advanced manufacturing aeronautical and defence agency, which employs 110 people, with high-end apprenticeships, in the middle of the countryside. This is happening right in my constituency—it is 85% rural, yet I have businesses like that.
The final jewel in the crown is Caterpillar, which last year made £59 billion worth of sales worldwide. The company, which has 1,000 people working in Desford in my constituency, is looking at making green hydrogen-fuelled electric tractors, forklift trucks, dumper trucks—you name it. I have had the pleasure of sitting there and driving Caterpillar vehicles in Arizona remotely. That is the sort of innovation that we can do. Caterpillar is sourcing its manufacturing right here in Desford, and has been for 70 years.
I mention all this to highlight some of what is going on in my small area of Leicestershire. People choose the UK because of the skillsets we have, the tech environment we create, the regulation we have in place and our stability in the global market. That is why they come here. Does that mean we should shut up shop, because we have done enough? No, of course not. It is important to make sure that there are signposts and avenues so that people know where to invest. When I speak to the likes of the Midlands Engine, which is looking for ways to drive investment in the 11 million people in its area, among the questions that come up are: where should businesses go, and how do they connect with Government?
UK Car Industry
Jonathan Reynolds Excerpts(1 year, 7 months ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I thank my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) for securing this urgent question on an area of fundamental importance not just to his constituency, but to the prosperity of the whole country.
For months now, Labour and industry have been warning the Government that this cliff edge was coming. It is a statement of the blindingly obvious that the lack of battery-making capacity in the UK, combined with changes to the rules of origin, was a car crash waiting to happen. It is a fact that, without domestic batteries, there will be no domestic automotive industry in the UK, yet the Government have no strategy to bring in the investment and infrastructure needed, and the rules of origin just make that even more compelling. This deadline to conform with the rules of origin has not been a secret, but where is the urgency, the ambition and the determination to keep our world-class automotive industry in the UK?
Once again, industry has been treated to a Government who are fond of big-state, top-down targets, but completely missing in action when it comes to how to deliver on those targets. Dare I say it that, despite warning after warning, it is clear that this Government are asleep at the wheel. Labour has a plan, through our industrial strategy—which Members can read as it is published—not just to protect the industry and the jobs that we have, but to deliver even more. We will part-finance those eight gigafactories, create 80,000 jobs and power 2 million electric vehicles, matching the incentives on offer from our rivals.
This is not just about public investment; it is about planning reform, changes to business rates, domestic energy security and supply, and more. That is the action that is needed. With respect, the Minister has not really answered any of the questions from my hon. Friend the Member for Ellesmere Port and Neston yet, so will the Government outline how they will secure the battery-making capacity that we desperately need in the UK? What is the Government’s view on the suitability and application of the rules of origin as they currently stand? Finally, will the Government wake up, grab the steering wheel and get control of the situation before it is far too late?
Ms Ghani
It is a good to hear that the Opposition are expecting businesses to make decisions on promises that may or may not come down the line, and on promises of sums of money that have been allocated and reallocated a number of times by the Labour party. This is not just my view: look at the figures from the Society of Motor Manufacturers and Traders, showing that British commercial vehicle production grew by 39% in 2022, the best since 2012, with exports surging by 63%. We are determined to make the UK the best location for export-led automotive manufacturing.
I am going to talk not about a promise, but about the programmes that are in place to ensure that supply chains and gigafactories are here to support the whole automotive sector. I have spoken about the Advanced Propulsion Centre—perhaps the Opposition do not understand how important that is—the Faraday battery challenge and “Driving the electric revolution”. We must not forget the Envision AESC announcement of its investment in a gigafactory in Sunderland or Johnson Matthey confirming its investment in the construction of a factory in Hertfordshire for proton exchange membrane fuel cell components for use in hydrogen vehicles.
Discussions are constantly ongoing with other potential investors into gigafactories in the UK. We are not doing this by ourselves in Government, making decisions that seem good on paper; as I said, I co-host the Automotive Council and just this week—possibly on Monday or Tuesday, I cannot remember—I caught up with Aston Martin, Bentley Motors, BMW, Ford, Jaguar Land Rover, McLaren Automotive, Nissan, Stellantis, Tesla, Toyota and the Volkswagen group. They are keen to continue working with us to ensure that we have supply chains here in the UK.
European Union: Future Relationship
Jonathan Reynolds Excerpts(4 years, 9 months ago)
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Michael Gove
My right hon. Friend has made an excellent point, which reflects the brilliant work that he did as Business Secretary. It is absolutely the case that there are common technical standards in which British experts play a distinguished part. We will want to ensure—and I know that others will want to ensure—that those common standards can help to underpin successful commerce and trade.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The Minister began by saying that the Government were not asking for anything that was not already in an existing agreement between the EU and another country, but then gave an answer on financial services which the document backs up, saying that the Government were seeking an enhanced, comprehensive equivalence regime for our major sector. I must respectfully say to him that those statements cannot both be true. There is no single equivalence regime—it is a patchwork of regulations—and there are major bits of legislation that contain no equivalence provisions at all, such as cross-border payments regulation, the motor insurance distribution directive and the single euro payments area. So, with respect, we are asking for something additional, and one of the answers that the Minister has given is not really correct.
Michael Gove
I am grateful to the hon. Gentleman for his thoughtful intervention, but all that we are seeking is straightforward equivalence in financial services. The European Union has said that it will review that, and we will know the conclusions of its review by June.
Oral Answers to Questions
Jonathan Reynolds Excerpts(5 years, 1 month ago)
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Mr Speaker
As the Father of the House leaves this place after 49 years without interruption, I for one want to salute him. [Applause.] The right hon. and learned Gentleman is one of the most popular and respected politicians in our country. For his service to this place, for his service to his constituents and for his service to our country, he deserves the warmest appreciation. For my part, I thank him for his support and friendship over decades. The right hon. and learned Gentleman, as most sensible people know, whether they agree with him or not, is a great man.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The Prime Minister
I am afraid that shows a fundamental division between us, alas, because I think that what we need is a strong and dynamic economy, and the evidence is that reducing corporation tax delivers more in yields and more in growth. That is how we have been able to commit now to spend another £780 million on special educational needs schools, and to allow communities to set up new SEND schools where they desire them. We will back them with the funding made available by that strong economy. That is the fundamental difference between the hon. Gentleman and me.
Oral Answers to Questions
Jonathan Reynolds Excerpts(5 years, 1 month ago)
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The Prime Minister
My right hon. and learned Friend makes a reasonable case; alas, we cannot know what the EU will do in response to the request from Parliament—I stress that it was not my request but a request from Parliament—to ask for a delay. We await the EU’s reaction to Parliament’s request for a delay.
I must respectfully disagree with my right hon. and learned Friend, perhaps not for the first time, because I think it would still be very much in the best interests of this country and of democracy to get Brexit done by 31 October. I will wait to see what our EU friends and partners say in response not only to the request for a delay from Parliament but to Parliament’s insistence that it wants a delay. I do not think the people of this country want a delay and I do not want a delay. I intend to press on, but I am afraid we now have to see what our EU friends will decide on our behalf. That is the result of the decision that the Leader of the Opposition took last night.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The Prime Minister
To the best of my knowledge, there are more EU nationals living and working in this country than ever before, and, in many ways, that is a great thing, but we have, as the hon. Gentleman knows, the EU national settlement scheme to encourage people to come forward to register if they are in any doubt about their status. We will bring forward an Australian-style, points-based immigration system to make sure that all sectors have access to the labour they need.
European Union (Withdrawal Agreement) Bill
Jonathan Reynolds ExcerptsTuesday 22nd October 2019
(5 years, 2 months ago)
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Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The argument for the Bill is that it will get Brexit done. Having listened to the debate, that appears to me to be the only argument for it; I have heard very few people advocate for the measures in the deal. I understand that, because we are all tired and a bit sick of this. I think we would all like to talk about other things, but there are two things that we should acknowledge and be straight with the public about.
The first is that this deal—or any deal—does not get Brexit done. We have years of this to come, and we all know that. This is only the end of the beginning. We have the future relationship with the EU to negotiate, and then we have future trade deals, all of which will raise the same issues of national sovereignty up against economic integration. The journalist Helen Lewis said yesterday that voting for this deal to get Brexit done was like someone saying they want their pregnancy to be over so they can get back to going to bed early and reading their favourite novels. I could not have put it better myself. The Conservative party needs to acknowledge that, to own that and to be straight about it. As MPs, our job surely has to be to ask, “Is this deal good for our constituents and for the country?” We will never make a bigger decision, and if we get it wrong, we will never be forgiven.
Mr Gyimah
On getting Brexit done, does the hon. Gentleman acknowledge that if this deal passes the House, we will quickly be in transition negotiations and negotiations on whether the transition is to be extended? That could cost around €10 billion a year. We should be honest with the public about that, rather than pretending it will get done this month.
Jonathan Reynolds
I absolutely agree with the hon. Gentleman. I am reminded of the debate on article 50. There was tremendous pressure to trigger article 50, and I personally voted for us to do that. It was a test of whether we accepted the referendum result. It is now widely recognised that the measure, the timetabling and the timescale that we imposed on ourselves were disastrous for the national interest of this country.
There are three things—just three things—that I want to know: what does this deal mean for manufacturing; what does it mean for services; and what does it mean for the Union? I recognise that not everyone voted on economic grounds. Indeed, yes, there will be a short-term boost to the economy because of investment decisions that have been deferred through the process so far, but that is not the issue. That is not the measure of success. It is about the next 10, 20 and 30 years. If we get this wrong, it will be like a slow puncture at the heart of our economy, and we will regret everything that we have done to get to that point.
Let us start with manufacturing. There is a big difference between this deal and the previous one. Essentially, the previous one offered some sort of voluntary single market alignment on goods, and that has been taken out of this deal, so what does that mean? This is quite a hard Brexit for Great Britain, so what does that mean? I genuinely ask that because no one has given anyone in this Chamber an explanation of that decision. Does it mean that just-in-time supply chains will no longer function? Does it mean that rules of origin will now be required? Looking at the evidence, I think the answer must surely be yes. Does it pass the Nissan test? Will we see the continuation of Nissan’s business model, which has been a huge success story for this country? I have no answers to those questions, and I have 3,500 jobs of my constituents that depend on that.
Let us talk about services. The biggest problem with a bare bones FTA is what it does on services—we are a services economy. The previous deal was poor on services. This deal is equally poor. That is not a reason to walk away and pass it. So what is the plan? For all the imperfections of the single market in services, we should remember that trade in services between EU member states is freer than it is between federal states in the US or between different provinces in Canada. Moreover, the UK is a powerhouse of financial, business, legal, accountancy, consultancy and tertiary education services. What does this deal mean for them? We hear so much about fishing. With respect, the UK computer games industry is worth 10 times the value of the UK fishing industry, so let us talk about the things that really matter.
Finally, let us talk about the Union. I do not want to vote for anything that will lead to the break-up of my own country. I do not think that that is a dishonourable position to take. It is proposed that Northern Ireland should have a totally different Brexit deal. I admit that it could be a lucrative one; it could be very lucrative at the expense of the north-west of England. I can see why the Good Friday agreement requires something different for Northern Ireland. To be honest, I can also understand why it is a huge issue for colleagues in the DUP to accept and sign up to a deal in which a customs declaration is needed to export from Northern Ireland to Great Britain. For me, the bigger danger is in relation to Scotland. It is about the precedent that this sets for Scotland. I believe that England, Scotland, Wales and Northern Ireland are stronger together, and I do not want to undermine that. We have no answers on those things.
Let me just say this in my final few seconds of the four minutes that I have had to discuss the biggest issue that we will ever be asked to vote on: I recognise that it is possible that any deal could have these problems and that even the best deal possible to negotiate could be a bad deal for the UK. In that situation, the public have to absolutely be told what they are getting, and they must take responsibility for that. They have to have their eyes open about this and know what it will mean. At the minimum, that requires a scrutiny process in Parliament and, frankly, it now requires the people having the final say on this matter.