Automotive Industry

Justin Madders Excerpts

Wednesday 12th July 2023 Commons Chamber

[Ms Ghani]

I assume that the hon. Member is referring to the rules of origin tariff. That is why we are working hard and negotiating with the EU, and working with our partner representative groups within the EU, so that they can be lobby as well. This is not just an issue in the UK. This is a European issue too, and we are making sure that those voices are heard loud and clear with our partners across Europe.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I have a specific question for clarity: have the Government formally requested a reopening of the rules of origin for 2024?

[Ms Ghani]

The Government are working hard to share the challenges that will be faced by all manufacturers in Europe, not just the UK, when it comes to importing and exporting vehicles. This is not just a UK issue, and it is important that not just we but our counterparts in Europe make these arguments loud and clear to the EU. I recently met SMMT and asked that its sister bodies do the same where they reside in European countries, to ensure that those arguments are heard loud and clear.

As I said, there is huge diversity of companies within the supply chain and manufacturing of all automotive vehicles, and the UK has a full automotive eco-system across the UK. The sector is here because it recognises the UK’s unique strengths. Our engineers are world class—it is not for nothing that six out of a total of 10 Formula 1 teams are based in the UK. More broadly, the sector recognises that this Government have its back. We want to use innovation, skills and a competitive business environment to ensure that the UK automotive sector can thrive.

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[Justin Madders (Ellesmere Port and Neston) (Lab)]

I am grateful for the Speaker’s agreement, and that of the Whips, to my speaking in today’s debate.

If anybody does not know it yet, Ellesmere Port, which I am proud to represent, is synonymous with Vauxhall Motors. I know that my hon. Friends the Members for Luton North (Sarah Owen) and for Luton South (Rachel Hopkins) will say that Luton is equally synonymous. I put on the record my gratitude for their support, and that of their predecessors, when we faced similar battles to keep our plants open. We have heard already that we all have to succeed if the UK car industry is to succeed. I will show my solidarity with them to keep this important sector going. They will recognise the pride that we all have in being such a major part of the UK car sector.

Generations of my constituents, though not as many generations as those of my hon. Friends the Members for Luton North and for Luton South, have worked in the Vauxhall Motors plant since it first opened in around 1960. When I drive away from my house in my constituency in my Vauxhall Astra, I go past many houses that have Vauxhall workers in them, or Vauxhall pensioners, or people who have had family and friends who work at Vauxhall. That is just before I get to the end of my street. It is a long street, but I think that it is symbolic of the fact that every part and corner of my town has a link to the factory. Indeed, as the town grew the plant grew, from the 1960s onwards. Although it does not employ anything like the 12,000 people that it did at its height, it is still a substantial employer in the town. That of course does not take into account the many people employed in the supply chain and associated industries; neither does it account for the great potential that we have for greater numbers if the new van, which is coming soon, proves to be the success that we hope that it will be.

The parent company may now be called Stellantis, and my hon. Friends the Members for Luton North and for Luton South and I are now “the Stellantis three”, but Vauxhall Motors is the name that gives us pride in our community. It is something that we all recognise. The jobs that Vauxhall Motors, or Stellantis, provides are the sort that I want our future success to be built on: highly skilled, unionised, permanent jobs, manufacturing something that is a matter of national and local pride. When the shadow Secretary of State, my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), spoke about his pride in the Nissan plant in Sunderland, those words really resonated with me. Those of us who have big local manufacturers take great pride in what they have done for our communities, and indeed the wider economy.

As you would expect, Madam Deputy Speaker, the plant has regular fights for survival, and I am proud that alongside many others I have played my part to ensure that it is still there, but it does not get any easier. Every five years or so, when the next model is discussed, plants across Europe are effectively pitted against each other to bid for the next job. The productivity of the local workforce and their co-operation with Unite the union, which for the record I am a proud member of, work extremely well. They show tremendous leadership to work with management. In the past, that has put us in the best possible position to secure future work. The partnership between the trade union and management is a real exemplar of how employee relations can be conducted for the benefit of everyone.

The local authority, and indeed central Government, have played their part too, both in recent years and in the previous decade, with initiatives such as the car scrappage scheme and the Automotive Council, which helps not just Vauxhall Motors but the entire sector more generally. Before the new van rolls off the production line for the first time, which I hope will be shortly, the challenge to secure the next model has already begun. That challenge has many similarities with the obstacles that the entire sector needs to overcome, as we have heard about.

I am confident that our workers and management locally will be able to show that they are competitive compared with other plants, but will that be enough if they face a 10% surcharge on their exported products, as it looks as if they may be facing from next year? I think that we all know that expecting any business to remain competitive if it has an additional 10% cost added to it is unrealistic. As my hon. Friend the Member for Luton South mentioned, for vans the tariff could go up to 22%. The clear warning signs are there that we need to do something dramatic to avoid that cliff edge.

There are six months to go before we get to that point, which shows that we are in the danger zone. As has been mentioned, the Government had years to address this issue. They either need to renegotiate the deal to get rid of the tariffs or get enough battery plants on the ground so that tariffs do not matter any more. Unfortunately, neither of those things has happened. When the EU is pumping billions into manufacturing as part of its green industrial plan, and the US is investing trillions as part of the Inflation Reduction Act, the inaction in the UK becomes negligence. If we want the UK to be a clean energy superpower by 2030, and to avoid falling off a cliff edge before then, we need a much more interventionist Government who will help the automotive sector to make this important transition. Gigafactories, charging infrastructure and reshoring the supply chain will not happen by magic, especially when the US and EU are actively pursuing that for their own industries.

Look at the evidence given to the Business and Trade Committee about the challenges that we face. These are some of the quotes given to the Committee on the matter recently:

“At the moment, the UK does not have a strategy. It does not have a runner in this race…Capital is far more incentivised to go to the US.”

Right now there is no comparison with what is on offer with the Inflation Reduction Act, and what is on offer in Europe. That is unfortunate, but it is the reality of where we are. The problem is that when other nations are putting in massive amounts, not putting in that level of cash makes us uncompetitive. It is difficult for shareholders to make a positive decision if we are not putting the same amounts on the table. That is what the industry has been very clearly telling us.

We know, as we have heard already, that we need at least eight or possibly nine gigafactories to make the UK car industry viable, but, as my hon. Friend the Member for Wansbeck (Ian Lavery) said, we may have half a gigafactory coming on stream, or maybe two at best, if we are lucky. He told us in some detail about the struggles to get that gigafactory up and running in his constituency, and that should tell us that this needs full attention. I know my hon. Friend the Member for Birkenhead (Mick Whitley) has been actively campaigning to get a gigafactory site in his constituency capable of serving not only Vauxhall Motors but probably also JLR and some other factories in the region.

I am pleased to say that our request to meet the Minister was granted, just before this debate in fact—what a great coincidence that was—because we think there needs to be recognition that there is a lot of chicken and egg in this situation. If we do not have the gigafactories, we will not have the car plants; if we do not have the car plants, we will not have the gigafactories. As my hon. Friend the Member for Luton North said, we all have to succeed in this. It cannot be just one or two plants. For the future to work in this sector, we all have to succeed.

Let us get more of these gigafactories up and running, with spades on the ground in the next 12 months, before we get the point where the sector decides that there just will not be the capacity to move forward with a viable UK car industry. As we know from many other industries, once it is gone, it is gone. As the Faraday Institution has said, we need a “timely and co-ordinated effort” to attract more gigafactories to the UK. We need to develop a resilient, sustainable and efficient supply chain and build up skills capabilities. That takes leadership, and it is about time we saw some from the Government.

We definitely need a strategy, and one that is interventionist in its outlook. When people decry the £28 billion a year that my party is committed to spending on greening the economy, I have to say to them, just look at what a fraction of that could do for the car industry. I believe it could be money well spent.

However, we can also do other things better. We need to make better use of the taxpayer pound that we already spend, and the most cursory look around the fleets in most other countries shows that we stand almost alone in failing to recognise the importance of social value as part of our procurement process. In France, the police drive Citroëns, Renaults and Peugeots produced in French factories. In Germany, they drive Mercedes, BMWs and Volkswagens. In Spain they drive Seat vehicles; in Sweden, it is Saabs and Volvos and in Italy they drive Alfa Romeos, Fiats and even sometimes Lamborghinis.

All those countries are governed by the same directive as we used to be, yet they all seem to be able to procure vehicles in the way that supports their own industry. We are no longer part of the EU, so we have no excuse now, and I ask myself what is stopping us being able to make use of public sector procurement powers to support our automotive sector. I ask myself why police officers in Cheshire are using vehicles made thousands of miles away when they could be in vehicles made just down the road at Vauxhall Motors. It does not have to be that way. The automotive sector has had more than its fair share of challenges due to Brexit, as we have heard, but let us use some of those so-called new-found freedoms to bring us some benefits as well.

A proper strategy on charging points is needed, but, just as with the overall industrial strategy, there is a mistaken belief that things should just be left to the market. In consumers’ minds there is now hesitancy about moving over to EVs and making a huge financial commitment at a time of cost of living crisis. The initial cost and inconvenience of running an electric vehicle is at the forefront of their considerations. Brand-new electric vehicles are far more expensive than second-hand traditional vehicles and, while electric vehicles are becoming a greater proportion of new sales, I am concerned that we will face a natural ceiling on them before too long.

As technologies progress and electric vehicles become more numerous on the roads, focus has turned to the availability and practicality of owning one. Concerns have arisen around access to and the cost of on-street charging. Given that around one third of UK homes do not have access to off-street parking, whether a driveway or a garage, we need a more effective way to public charging before we reach 2030. There is also a profound unfairness in the fact that those whose properties lack driveways pay four times as much in VAT as those who can use domestic supplies of electricity.

The Government’s commitment to building 300,000 new charging points is to be welcomed, but between 2017 and 2022 only 1,603 were installed, and almost 75% of those were located in the west midlands, the south-east and London. The north-west received only 0.7% of the total installed. London now possesses 100% of the charging points required by 2025, yet every other region in the country is lacking. According to analysis by Transport & Environment, most of the UK’s regions possess less than 50% of the estimated charging capacity required by 2025. In regions such as my own in the north-west, the north-east, the south-west and Northern Ireland, it is only around 30% of the capacity required. My local authority, Cheshire West and Chester, has only 28% of the chargers required by 2025—a stark comparison with wealthy London boroughs such as Westminster, which already has 358% of the chargers it needs.

That is not a good record for a Government who stood on a platform of levelling up the country—there appears to be no strategy to deal with those regional disparities. I am not sure that the Government even recognise that they exist. There is a huge opportunity for so-called “left behind” towns to receive some central investment for major charging points, so that those who cannot access private sources of electricity can come in to their town centre, charge their car and rejuvenate their town centre at the same time. There is a real opportunity there, but it will not happen by chance; it needs Government action.

When the Government’s report on charging infrastructure acknowledges that the process is arduous, we have to ask what they are going to do to change it. The report states:

“Installing and operating chargepoints requires several parties across the energy sector, local government and the transport sector to work together effectively.”

But where does the responsibility for that ultimately lie? That is the endgame for the whole automotive sector.

Someone has to step up to the plate and say, “Yes, this jewel in the crown of our manufacturing sector is going to be supported and supported properly, because we recognise that for our constituents, for our economy and for our environment, the car industry in the UK will only survive if there is the political will, backed up by a properly funded strategy, to make sure that it actually happens.” If the Conservative party will not do that, it should make way for one that will.