Automotive Industry

Nia Griffith Excerpts

Wednesday 12th July 2023 Commons Chamber

[Dame Nia Griffith (Llanelli) (Lab)]

My constituency of Llanelli has made a huge contribution to the automotive industry over many years. Industry grew up there from the very early days of smelting iron ore with local coal, to smelting copper ore imported through the town’s docks, and on to the world-famous tinplate industry, which lives on in the Tata works, which are often referred to as steelworks but which are referred to locally as the tinplate works.

Given its metal tradition, it is no wonder that motor manufacturing and engineering flourished in Llanelli and have been and continue to be very important sources of employment. As well as the larger firms, such as Marelli and Gestamp, there are myriad smaller firms, such as Excel Precision Engineering. They all produce a range of components that are part of the immensely complex supply chain that supplies the many iconic names in the UK motor industry. So many jobs in Llanelli depend on motor manufacturing and, indeed, across Wales there are some 9,000 jobs in the industry.

The complex supply chain makes it vital that the Government have a clear industrial strategy and trade policy, to give the industry the long-term certainty that it needs to invest. We are already seeing the effects of the Government’s dilly-dallying, with production down nearly 10% in 2022 and exports down 14%, which equates to a significant amount when eight out of 10 vehicles are exported. This means empty order books in the supply chain, which is very worrying for workers.

This is about not just the need to produce huge volumes of car batteries but adapting the design of many of the component parts of vehicles, with investment to gear up production lines to produce them. Furthermore, as petrol and diesel cars are phased out, some components will no longer be needed. To survive, the factories that make them will need to transition to manufacturing relevant components for the future, which is a future of electric vehicles.

Just in case the Government still have not heard the message coming loud and clear from the industry for months and months, the challenges are: high energy prices; rules of origin; the need for a long-term industrial strategy and certainty about the future; support for research and development; and the enormous challenge posed by the way other countries incentivise the industry to site new factories and new production lines in their countries.

Let us look at some of the asks. First, I implore the Government, instead of pressing ahead with the imposition of 10% tariffs from January 2024, to work together with the EU to postpone the escalation of the rules of origin requirements until 2027. We also need the Government to support research and development and the bringing of innovation to the market. For example, my constituents have a company that has developed the means to make an EV car battery 15% more efficient. That could make a huge improvement by getting more miles out of a vehicle per charge or facilitating less weighty batteries. That is the sort of enterprise that we need to support.

India is an associate member of the Horizon programme, yet staff in our universities still do not know whether their projects will be able to go ahead. They do not know whether we will continue to be part of the Horizon programme. The Government need to clarify that as soon as possible, so that we do not lose excellent researchers who will go elsewhere if they cannot further their research here in the UK.

Manufacturers have pointed out time and again that the UK has much higher energy prices than our competitor countries. This affects not only energy-intensive industry but all manufacturing. The solution is clear, and Labour has plans to implement it. We on the Labour Benches recognise the real urgency of the need to invest significantly in renewable energy. That is precisely what we would prioritise so that we could slash bills for industry and households while creating jobs—as well as, of course, tackling climate change and ensuring our energy security so that we are never again held to ransom by a foreign despot increasing gas prices. Instead, we have seen the Conservative Government ban the expansion of wind energy in England and take a half-hearted approach to lifting the ban, stalling on solar and, quite frankly, desperately underperforming on the roll-out of renewable energy over the past few years.

We then come to the huge amount of investment that is needed now to transform production from petrol and diesel vehicles to electric vehicles. The US Inflation Reduction Act is a massive game changer. The EU has responded by developing its own incentives, but we have still not had a coherent response from this Government. Time is running out, because companies are making decisions now, and once they ramp up the production of electric vehicles elsewhere, we will see workers in factories here left with nothing but finishing off the remaining orders on existing lines, with no future. If, once those decisions are made, companies do invest elsewhere, there will be no bringing them back: once they have gone, they have gone, adding to the loss of 37% of UK motor manufacturing jobs that this Conservative Government have presided over. That is a full third of the industry lost since 2010. Although I welcome any new investment, it really does need to be put into the context of what this Government have allowed us to lose.

We are all aware of the urgent need to establish battery factories here in the UK. Germany has clocked up 10 factories, while we are struggling on one. What are the Government going to do to ensure that we get the battery factories we need, and in a timely fashion? It is no good being too late when all the industry has gone elsewhere.

In addition, we need adaptation and transformation right across the industry. That is why we in the Labour party have set out our plan to implement a proper industrial strategy and establish an industrial council to provide long-term stability of policy. We have also set out our UK version of the US Inflation Reduction Act: our green prosperity plan. Our national wealth fund will, when needed, provide the finance to invest in the transformation of our automotive industry to produce EVs, which are an important part of our plans to get to net zero. We will boost UK battery capacity with the part-financing of eight additional gigafactories and accelerate the roll-out of charging points to give providers confidence to charge their EVs.

To reiterate, it is not simply the Labour party but the whole industry that is very concerned that we are not seeing a clear industrial strategy or the necessary moves to build battery factories by incentivising firms to continue putting their production here, by bringing down energy prices and by ensuring that we have a thriving motor manufacturing industry for the future.