Automotive Industry

Mike Amesbury Excerpts

Wednesday 12th July 2023 Commons Chamber

[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.

--- Later in debate ---

[Ms Ghani]

It is an international market that is fighting for supply chains. The SMMT was clear that, when manufacturing production was low, that was down to access to products and critical minerals, which I will come on to. As well as taking care of the industry, I am responsible for critical minerals and for supply chains. We are working with the industry, which I met just this morning, to put together a supply chain import strategy, which will be out in the autumn. We need to get a number of things right to make it even easier for the sector to do even better than it already is, but it is in a really good place and I will go on to mention some of the facts and stories about that.

The sector is indeed a jewel in the crown of our economy. It is vital, because of where it is based across the country, to supporting the levelling-up agenda, net zero and advancing global Britain. Our automotive industry employs 166,000 people, adds over £70 billion to the UK economy and is our second largest exporter of goods. The UK is proud to be home to major global manufacturers such as JLR, Nissan, Stellantis, Toyota, BMW and Ford. But that is not the whole of the UK’s automotive eco-system: we have a lot more to be proud of, from our luxury and performance sector, including Rolls-Royce, Bentley, Aston Martin, McLaren and Lotus, to heavy goods vehicles and buses, such as Leyland Trucks, Wrightbus, Alexander Dennis and Switch, as well as the future of mobility, encompassing connected and autonomous vehicles. Those manufacturers are supported by a diverse, resilient and growing UK supply chain that spans a wide range of components and includes companies such as Bosch, NSK, Meritor and Swindon Pressings. These are valued partnerships, and the sector knows that my Department for Business and Trade is the Government’s first port of call to help businesses grow and flourish, and to create jobs, apprenticeships and opportunities around the country.

[Mike Amesbury]

I thank the Minister for being generous with her time. All the manufacturers that she mentioned face a cliff edge in January 2024, with the 10% tariff. What are the Government going to do about it? It is desperate in terms of those jobs in our communities.

[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.