Car Production: Solihull

Lord Harrington of Watford Excerpts

Wednesday 16th January 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

I congratulate my hon. Friend the Member for Solihull (Julian Knight) on securing this debate, although I must confess I am a little disappointed because, when I came into the Chamber, I saw lots of people, who I thought had come to listen to this debate. I thought, “Perhaps it is because of Jaguar.” Jaguars are known as “supertoys” by many people. Members may aspire to owning them and I can strongly recommend them. I have had a little indication that Madam Deputy Speaker may have a product manufactured by this company. So if representatives from the company are listening, I can say that we do have her endorsement.

[Madam Deputy Speaker (Dame Eleanor Laing)]

And the Minister.

[Richard Harrington]

And indeed myself, although not at taxpayers’ expense. In addition, it is not a “supertoy”; it is a more modest model.

Tonight’s subject is very important and I wish to thank other Members who have contributed. Jaguar Land Rover has an excellent group of MPs in the area, and I was pleased to meet them last week to discuss the announcement that was made. [Interruption.] I see the hon. Member for Warwick and Leamington (Matt Western) shaking his head. I do hope I have not affronted him if I have not met him—most Members were there. If I have, I really apologise and I will make sure he is always invited.

[Matt Western]

I do not believe I was invited, but I very much hope that I will be invited in future.

[Richard Harrington]

If the hon. Gentleman was not invited, I would like to apologise to him. This was all done at the last minute. I will meet him whenever he likes, either informally or in a meeting with officials. The point I was making is that JLR is a cross-party matter, and it is treated in that way by the Government and by the company.

In the time we have, I wish briefly to outline the steps the Government have taken since JLR announced last Thursday that it will reduce its global workforce by about 4,500 people. I will then move on to address the arguments put forward by my hon. Friend the Member for Solihull. As he highlighted, the UK automotive industry remains one of our great success stories, and global demand for UK designed, engineered and manufactured vehicles is strong. Our industry is regarded internationally as very productive. Our industrial strategy builds on these strengths and invests in the future, to put the UK at the forefront of the next generation of electric and autonomous vehicles. JLR is a key part of our automotive manufacturing base, supporting high-quality jobs, both directly and across the automotive supply chain.

As my hon. Friend noted, last Thursday, Jaguar Land Rover confirmed that it is offering voluntary redundancy packages to its UK workforce, to reduce the headcount. As this is a voluntary redundancy programme, the company cannot give any figures on the number of Solihull workers who might be affected. However, JLR has made it clear to us, in a call that the Secretary of State and I had with its chief executive just before the announcement, that those working on production lines are not part of this programme; this predominantly relates to marketing and management staff. I do not make light of that; these people will be made redundant—we hope it will be with their agreement—and what job they do does not particularly matter. He also stressed to us that the apprenticeship programme, which has been supported so well by my hon. Friend and other local MPs, will continue, as will graduate recruitment and the recruitment of specific staff that the company needs.

The decision to offer these redundancies is the next phase of a £2.5 billion “Charge and Accelerate” turnaround plan, which the company announced last September. As I say, I have spoken several times to the chief executive and he has explained how these redundancies will streamline the business and help to ensure the company’s long-term health for the future. As I say, I do think a lot of every member of staff and their families, who face an uncertain time. I assure the House that we are working closely with colleagues throughout the west midlands to offer whatever support we can.

We are also working to support the company itself. We have a long-standing relationship with the firm and its parent company in India. Since the turnaround plans were announced last September, we have worked even more closely with the company in support of its long-term strategy as it invests and transitions to autonomous, connected and electric vehicles.

[Mr Jim Cunningham]

First, one of the important factors here is that the development of the electric vehicles takes place at Whitley in Coventry. Secondly, the Minister might want to think about whether a scrappage scheme would help the situation. I do not know—it would have to be put to the company—but it struck me as something that we should perhaps think about and explore to help the company. Thirdly, as my hon. Friend the Member for Warwick and Leamington (Matt Western) said, there is the issue of taxation. Lastly, when we talk about the labour force, it is important to remember that a lot of the labour force bought houses, certainly in my constituency and others, so we have to do as much as possible to help them if they run into difficult situations with, for example, mortgages.

[Richard Harrington]

I thank the hon. Gentleman for his intervention. He was at the meeting last week and I know that, like other Members, he spends a lot of time with Jaguar. Let me go through his points briefly. I must confess that I have not thought about a scrappage scheme, but I am happy to do so now, as he suggested. I will come to the matter of taxation and the electric vehicles later in my speech.

I was just about to confirm that Andy Street, the Mayor of the West Midlands Combined Authority, and the Secretary of State convened the Jaguar Land Rover development partnership, which brought together the company and local MPs, including my hon. Friend the Member for Solihull, whom I thank for having come at short notice. Other local MPs were invited and I hope that, although I might have missed him out from my meeting, the hon. Member for Warwick and Leamington was not missed out from that one. I was not there, in case there was an urgent question in the House on the subject; somebody had to be here to deal with it. I do not know whether I drew the short straw or the long one, but I intend to be there in future. It is a part of my responsibilities that I look forward to taking up. Also present were trade union representatives, trade bodies, local government and almost anyone who we felt was relevant and could be invited. The partnership is a continuing group. It heard from chief executive Ralf Speth about the significant investment that Jaguar Land Rover continues to make in the UK. He gave many examples of how the company is investing in the future, including in Solihull.

I accept the point that the hon. Member for Coventry South (Mr Cunningham) just made about working families throughout the UK, not just in his Coventry constituency—

[Mr Jim Cunningham]

I did say other constituencies.

[Richard Harrington]

The hon. Gentleman certainly did. The lives of people throughout the UK are affected. As my hon. Friend the Member for Solihull said, these are not just jobs: they are well-paid, highly skilled, well-respected jobs, and long should they continue. Jaguar Land Rover seems positive about the future. Last week, I met Steve Turner, one of the trade union representatives, and I have to say, without betraying Steve’s confidence, that I asked him what the management is really like—I have dealt with the chief executive and so on—and he said it is absolutely very good. I believe that, and I think everyone involved has confirmed that, so I am confident for the future.

Let me turn to the specific points. Jaguar has confirmed that the next-generation electric drive units will be produced at the company’s engine manufacturing centre in Wolverhampton, from later this year. The units will be powered by batteries assembled at a new JLR battery centre located at Hams Hall in Birmingham. That clearly reinforces the company’s commitment to the west midlands.

Over the past year, Jaguar Land Rover has announced investment in its key plants in Solihull and Halewood, to build the next generation of models, including electric vehicles. For Solihull in particular, in June 2018 the company announced hundreds of millions of pounds of investment in a technology upgrade to accommodate the next generation of flagship Land Rover models. Hopefully—this is certainly the intention—that will future-proof the site.

We are determined to ensure that the UK continues to be one of the most competitive locations in the world for automotive and other advanced manufacturing. My hon. Friend mentioned the automotive sector deal, which was published just over a year ago. The Government are working with industry to invest in the future. This includes a £1 billion commitment over 10 years through the Advanced Propulsion Centre, which is very impressive. Jaguar Land Rover has benefited from this support; most recently as part of a £4.4 million project through the Advanced Propulsion Centre, and a £11.2 million one through the connected and autonomous vehicles intelligent mobility fund.

I now want to turn to other arguments made by my hon. Friend. As he rightly points out, while Jaguar Land Rover has had great success over the past decade, the number of challenges facing the company are significant. Falling sales in China has been a major factor and it has had an impact on many global automotive companies. In addition, the broad trend of declining consumer demand for diesel has had an impact.

I make no apology for the Government’s bold vision on ultra low emissions vehicles, which we set out in our road to zero strategy. I am sure that, in the long run, Jaguar will be a major beneficiary of that strategy, as, of course, will be the environment of this country, Europe and, I hope, the world. We want to be at the forefront of this and aim for all new cars and vans to be effectively zero emission by 2040. Hopefully, by 2050 and beyond, every car will be zero emission. I agree with the critical point made by my hon. Friend: diesel plays an important role in reducing CO₂ emissions from road transport during the transition and it will continue to have an important role for years to come. We need to be clear on this point, both in our own minds and in our communication with industry, and I believe that we have been.

The Government’s road to zero strategy is clear that diesel, particularly the new generation of diesel engines, is a perfectly acceptable choice environmentally and economically. For those Members who are not familiar with this document, I suggest that they look at it. There has been much talk of the Government playing a role in destroying diesel and talking it down.

[Julian Knight]

I am really encouraged by what the Minister has said in that regard. The reality is that the collapse in diesel is a Europe-wide issue; we know that. It is just that we need this nuance—this idea that cleaner diesel does play a role—shouted from the rooftops, provided that the industry can show that this clean diesel does not harm the environment.

[Richard Harrington]

I do not have it within my power to shout from the rooftops, but I will shout from this Chamber for those people who are listening. The new clean diesels are really, really good. I confess to having a penchant for this particular kind of vehicle.

[Matt Western]

I thank the Minister for being so generous with his time. Let me return to this important point. He is speaking about shouting from the rooftops. Perhaps the most critical point to shout about is taxation. I appreciate the points that have just been made by the hon. Member for Solihull (Julian Knight). There is a global issue, as we have seen in north America and across Europe, on diesel, but it is in the Government’s gift to change taxation and not to penalise. The maximum vehicle excise duty addition that was put in was £560 on a vehicle.

[Richard Harrington]

I am bursting to respond to the hon. Gentleman’s point, but I have two minutes left, Madam Deputy Speaker, and I do not want to torment your time—well, you will not let me; you would tell me not to.

My hon. Friend made the same point. I am pleased to remind the House that, on 19 December, the Treasury published a review of the impact of the worldwide harmonised light vehicles test procedure on vehicle excise duty and company car tax. The review is open until 17 September[Official Report, 21 January 2019, Vol. 653, c. 2MC.]. Officials from the Department have been working closely with Jaguar Land Rover and others to ensure that the industry’s evidence is considered in the review and I look forward to the outcome.

I congratulate my hon. Friend. He really is a major spokesman for the company, together with his colleagues,. This debate is but a small part of the work that he does. My door is always open to him and to the company. I look forward to a great future for Jaguar Land Rover, and I know that the west midlands will be a key part of that.

Question put and agreed to.