Car Industry

Lord Fox Excerpts

Wednesday 17th May 2023 Lords Chamber

[The Earl of Minto (Con)]

My Lords, the Government are acutely aware of the global challenges that the UK car industry faces. We have been leveraging private investment, alongside government support, to bring EV manufacturing to UK shores. The UK remains highly attractive; our workforce is among the most productive in Europe, and we excel in R&D and innovation. The DBT Secretary of State is aware of this issue facing the automotive sector, and is raising this with her counterparts in the EU.

[Lord Fox (LD)]

My Lords, on 2 March this year I asked a Question of the noble Lord, Lord Johnson, the Minister of State for the Department for Business and Trade. It was exactly on this issue. Unless the renegotiation is successful, the manufacturers of electric cars will not be able to export their vehicles to the European Union without a 22% tariff. The noble Lord mentioned Stellantis, which is one of the companies that yesterday made the point that this is very urgent. I did not get a sense of urgency from the Minister.

McKinsey estimates that between £5 billion and £18 billion will be required to deliver the domestic battery capacity we need in this country. Even if that money was available now, which it is not, and even if the plans were approved now, which they are not, there would not be a battery plant at the end of this year. Can the Minister reassure your Lordships that the Government are actually on this case, and that the urgency of this is understood, because the industry does not get that impression?

[The Earl of Minto (Con)]

The noble Lord makes some very good points. I assure him that the Government are absolutely on the case. We are not alone; the EU has challenges of its own.

--- Later in debate ---

[Lord Fox (LD)]

It is a quid pro quo.

[The Earl of Minto (Con)]

It is a quid pro quo. This whole question of battery manufacture has caught a number of countries, including us, where they do not particularly want to be. The Government have invested in this country; the joint investment with the OEMs is about £1.5 billion and we have put a further £2.8 billion in. That will probably not do it, but I assure the noble Lord that we are absolutely on it.

--- Later in debate ---

[The Earl of Minto (Con)]

Virtually all vehicle manufacture is integrated throughout a number of different countries, and I can see no reason why we would not continue to follow the route that we have done in the past, and that of course involves our relationship with the EU. I know that the Secretary of State has been in close contact on this very matter.

[Lord Fox (LD)]

The Minister raised the international supply chain. I apologise if I tell him something he already knows, but the electrification of motor vehicles is a completely new industry. It is not changing a factory that currently exists; it is building a new factory. It is creating an entirely new supply chain. The reason you got urgent cries from these Benches is that unless that happens now, it will never happen. Now is the moment that it has to happen. My noble friend mentioned huge public subsidy. That is what this country has to compete against. Does the Minister understand why this is urgent?

[The Earl of Minto (Con)]

I certainly do, and the Government do as well. The automotive industry in this country employs well over half a million people and is fundamental to the success of the country. There is no doubt that some of the brands we have operating in this country are global, future brands, and the Government are fully behind them.