UK Automotive Industry
Nusrat Ghani Excerpts(1 year, 2 months ago)
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The Minister for Industry and Economic Security (Ms Nusrat Ghani)
I beg to move,
That this House has considered the UK automotive industry.
It was only two months ago that I was standing in front of the House addressing a motion tabled by the Opposition on the UK risking losing the automotive industry. That is evidently not the case. With the Government’s lead, the UK continues to be one of the best locations globally for the sector. Votes of confidence in our economy have been showcased by three major automotive announcements in recent months.
The automotive industry is a vital part of the UK economy and is integral to supporting growth by creating high value added jobs across the country, enhancing export opportunities and helping to deliver the Government’s overarching goal of making the UK a global hub for innovation. In the span of just 10 weeks, the Government secured three major announcements on automotive, proving that the country is internationally competitive for vehicle manufacturing. These investments will secure green, high- quality jobs, strengthen our supply chains and boost economic growth. I am confident that more will follow.
The UK’s competitive business environment and regulatory system, combined with the Government’s targeted approach to support the enhancement of the innovation ecosystem, has attracted some of the most prestigious manufacturers to invest here. Last week, we celebrated BMW Group’s announcement that it is investing £600 million, which will bring production of two new all-electric Mini models to Oxford from 2026. It will enable the site to fully transition to electric vehicle production from 2030.
As my hon. Friend the Member for North Swindon (Justin Tomlinson) and the hon. Member for Oxford East (Anneliese Dodds) will be aware, with the support of the Government, this investment will secure the future of the 4,000 staff employed at the Oxford manufacturing plant and at the body pressing facility in Swindon. BMW has been part of the UK auto manufacturing family since 2000, and by 2030 it will have invested more than £3 billion in our country. Our joint success story continues throughout the transition to electrification.
BMW’s announcement builds on last week’s good news that, following a £100 million investment, Stellantis has started electric van production in its Vauxhall plant in Ellesmere Port. This transformation is also historic, as it makes the plant the first all-electric vehicle facility in the UK and one of the first in Europe.
Rachel Hopkins (Luton South) (Lab)
The Minister and I have had many conversations on electric vehicle production, as she knows, but in January 2024—just some three months away—UK car and van makers, such as Vauxhall in Luton South, are facing 10% tariffs on exports of electric vehicles if they cannot source enough home-made batteries. That is despite the Government having had more than two years to prepare for the introduction of these rules of origin, which they negotiated. The Minister is aware of this, as I have raised it many times. With just over three months to go, can she just admit that she is failing our motor manufacturers and is willing to chuck them under the bus?
Ms Ghani
The hon. Lady started off appropriately by talking about how we work collectively on this issue. The rules of origin and tariffs were not just negotiated by us—there was another party at the table. The tariffs, if they are implemented, will impact not only on the UK car manufacturing sector but on manufacturers in Europe. As there are more cars imported from Europe into the UK, the burden will be far greater on those countries. The negotiation took place pre-covid and before Russia’s invasion of Ukraine. Of course, there is now a tight deadline, but negotiations with Brussels always go to the wire.
The important thing is this: we are negotiating hard for the UK automotive sector. Those manufacturers in Europe were also desperately trying to negotiate hard, because this impacts them just as much. Just as we have the Society of Motor Manufacturers and Traders—the automotive sector’s umbrella group—campaigning, they have groups campaigning in Europe. Just last week, there was a huge amount of news coverage about how Europe is now incredibly concerned about the flood of cheaper electric vehicles into its market. The argument we are making should definitely be taken to the EU, because the tariffs would impact car manufacturing in mainland Europe, too.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
The truth is that while gigafactories are now being built right the way across Europe, we need at least eight gigafactories with about 15 GW of capacity in the UK—including, I might say, one in the heart of the west midlands, which is home to about a third of UK automotive production. In the last Metro Mayor election, both the Conservative Mayor, Andy Street, and I promised that we would get that gigafactory built; it is still a large open space. When does the Minister anticipate those eight gigafactories being built in the UK? When does she anticipate a gigafactory coming to the Coventry airport site? If we fail, our automotive industry will be hit with tariffs soon and we will put 114,000 jobs in jeopardy.
Ms Ghani
The Tata gigafactory announcement ensures that we are front-footed when it comes to gigafactories—it will be one of the largest factories in Europe. The right hon. Member and the Labour party are obsessed with us needing five or eight gigafactories, but it is about capacity. It has been noted that we need, I believe, 89 GW by 2030, and with both Tata and Envision we are two thirds of the way there. That is how we need to compare with the rest of Europe: it is not about the number of factories; it is about the level of capacity that they provide. Even though we have those two in place, we are not complacent and will continue to do everything we can to secure further investment.
The right hon. Member talked about a particular site. Obviously, that will have to go through two funds within my Department, but we will always look at solid investment for even more gigafactory capacity in the UK.
Liam Byrne
I am grateful for that reassurance, because this is one question on which both the Conservative Mayor and I would be happy to come and lobby on behalf of the west midlands. The point is that we are told that we need 130 GW of capacity in the UK by 2040. Now, that may be eight sites or it may be more or fewer, but the key thing is that we cannot see a plan for the UK getting that capacity in place, unless the Minister gets up and tell us that there is a plan that she is about to reveal.
Ms Ghani
The right hon. Member and, of course, the Mayor for the West Midlands lobby incredibly hard—as they should, because they have fantastic sites for potential gigafactories—and those negotiations will continue. I always used to say at the Dispatch Box that we needed 100 GW of capacity, but the figure is now 89 GW. Envision and Tata provide us with a solid footing to get up to the capacity that we need, but we will not be complacent; we will continue our work.
As hon. Members will hear throughout my speech, over the summer we put in place a consultation on a battery strategy. I believe that, outside Norway, no other European country has such a strategy. We are working to produce a strategy to ensure that we have substantial capacity in the UK. The Tata commitment is huge, and I will allude to that as well. I mentioned Stellantis, which has started electric van production in its Vauxhall plant in Ellesmere Port. That transformation is also historic, as it makes the plant the first all-EV facility in the UK and one of the first in Europe.
I turn to gigafactories, the favourite topic of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne). In the summer, we also helped to secure more than £4 billion of investment from Tata for a new gigafactory. At 40 GW, it will be one of the largest battery plants in Europe, equivalent to the size of almost 65 football pitches. It will create up to 4,000 highly skilled jobs as well as thousands of further jobs in the wider supply chain for battery materials and critical raw minerals. Most importantly, the investment helps to turbocharge our switch to zero-emission vehicles by providing almost half the battery production needed by 2030. It is not that we need 12, 15 or five; it is about the capacity we need. Tata takes us two thirds of the way there and Envision is on top of that.
The announcements are the most recent in a line of investment decisions over the last couple of years. In 2021, Nissan and Envision announced a £1 billion investment to create an EV manufacturing hub in Sunderland. Ford joined the line-up in 2021 with a £227 million investment in Halewood to make the company’s first EV components site in Europe, and increased its investment in the plant to £380 million in 2022. Last year, we saw Bentley commit more than £2.5 billion to transition its Crewe plant to zero emission vehicles, with the first EV model to roll off the production lines around 2025.
Jaguar Land Rover has also announced that it will invest £15 billion over five years into its industrial footprint as part of its move towards electrification. That is great news for the west midlands and Halewood, where Jaguar Land Rover has production sites, research and development facilities and its headquarters. These investment decisions are votes of confidence from a highly productive and innovative sector, showcasing that the UK has the best to offer when it comes to green manufacturing and new and future technologies.
Paul Howell (Sedgefield) (Con)
The Minister is listing some fantastic organisations and great businesses around the country, but their size is such that the businesses that supply them are massive organisations in their own right. I have Gestamp in Newton Aycliffe, a supplier of subframes to all over the world, from Nissan in Sunderland to Volvo China. They are huge businesses. Does the Minister recognise the importance of the supply chain, not just the headline businesses?
Ms Ghani
My hon. Friend is right that the supply chain is critical to ensure that we continue to manufacture at pace. Just last week, we “leapfrogged”—I believe that is the quote—the French to become the eighth largest manufacturer globally, which shows how important our supply chain is. There are kinks in the supply chain and a lot of pressure—the Inflation Reduction Act on one side, covid on the other—while trying to get hold of critical minerals for the base products. I have been working with industry, and we will publish an import strategy-supply chain piece of work soon to make sure that we are shedding light and doing everything we can for our advanced manufacturing sector.
We have a strong and valued relationship with the sector, stemming from the UK’s rich history in auto manufacturing.
Katherine Fletcher (South Ribble) (Con)
I am grateful to the Minister for sharing the litany of successes in our proud automotive industry. I gently remind her that automotive includes trucks, not just cars. She mentioned the history of our production; Leyland has been making trucks since Victorian times and has a proud history—we still see the signs. It is now investing in making smaller electric trucks, reconfiguring its factory and taking on apprentices. It is a huge part of the Leyland industrial community. Can I make sure that my hon. Friend does not forget the Leyland DAF group’s wonderful truck heritage?
Ms Ghani
I would love to. More importantly, I was recently at a site where we saw trucks that used hydrogen, ensuring that construction sites achieve their net zero ambitions. Leyland will not be forgotten, due to my hon. Friend’s hard work.
Although we are not reinventing the wheel, we are witnessing the biggest transformation this sector has gone through since the first Ford models came off the production line. New vehicle technologies are emerging and shaping our understanding of mobility daily.
In the transition, the UK’s aim is to lead the future by creating it. Our primary objective is to boost private sector investment across the whole of the UK and create the right conditions for all businesses to innovate, by giving them the confidence to do so. That is why Government have created a comprehensive and long-standing programme of support, which includes the Advanced Propulsion Centre, the automotive transformation fund and the Faraday battery challenge—all tangible interventions that industry can access. We believe that, through those programmes, we can de-risk private investment in R&D, fast-track the commercialisation of new technologies and unlock the industrialisation of our EV supply chains.
John Redwood (Wokingham) (Con)
Would the Minister like to give us a few thoughts on what she thinks the opportunities are for synthetic fuels, sustainable fuels and hydrogen? How will they fit in around her battery vision?
Ms Ghani
My right hon. Friend’s views on electric vehicles and zero emissions are well documented. As I mentioned, a hydrogen strategy is also in place. I have been to a number of projects where vehicles are using hydrogen to ensure that that technology is exploited and that there is supply and demand in the chain, too. We are looking at sustainable alternative fuels not only in the automotive sector but in the aviation sector, so it is not just in that space. All alternative fuels will be investigated.
The future of the auto sector is electric—although I know that my right hon. Friend would like it to be much wider—automated and connected. The UK is well placed to consolidate its position among global R&D leaders as these technologies begin to commercialise, creating jobs and valuable new services for our businesses and communities. Our flagship Commercialising Connected and Autonomous Mobility programme will bring benefits across the UK. The Centre for Connected and Autonomous Vehicle’s recent £66 million Commercialising CAM programme 2025 aims to create an early commercial market that could be worth £42 billion by 2035. This innovation will save lives, create jobs, enable more efficient movement of people and goods, address chronic driver shortages, and better link under-served communities to vital services. As part of the programme, on 5 September, I was pleased to announce £18.5 million of public grants to 13 projects and 43 organisations across the UK to strengthen our capabilities in the CAM supply chain. I then had first-hand experience of a self-driving vehicle with Wayve, near King’s Cross. These technologies are here. They are no longer something from science fiction. Today, we can take automated bus journeys in Didcot and Edinburgh, with more world-class automated passenger and freight services to follow in the coming months.
In addition, through Government policies, we are enabling future mobility in the UK. We launched the full local electric vehicle infrastructure fund in March 2023. Following a pilot, it provides a further £381 million over the next two financial years to deliver tens of thousands of local charge points across England. Furthermore, to enable long-distance journeys, the rapid charging fund will future-proof electrical capacity at strategic locations to prepare the network for a fully electric car and van fleet—not just cars.
Ms Ghani
I hear my hon. Friend. With up-to-date policymaking, we ensure that consumers and taxpayers get the best possible option of modern auto transportation.
As recent investment decisions suggest, our message—I keep reiterating it as co-chair of our industry-Government forum, the Automotive Council—that the Government have the automotive sector’s back, was heard loud and clear. In that regard, we do not shy away from the challenges the industry has been facing: rising costs because of Putin’s horrific war in Ukraine; supply chains disrupted by covid aftershocks; and a fierce international competition for green manufacturing investment, rooted in an economic security concern, leading to countries choosing protectionist tools and consequently threatening the hugely important global supply chains that rely on cross-border collaboration. Those are all serious challenges for the UK automotive sector.
Those issues, however, are not unique to us. Countries across the globe face similar challenges and provide different responses. Some feel that the best way to reach pole position in the race to secure green manufacturing is to spend incredible, eye-watering amounts of their taxpayers’ money. We have taken a different approach and concentrate on the best way to encourage investment with targeted support. We have more than a chequebook to attract companies to these shores. Our highly productive and skilled workforce, focus on innovation and ease of doing business are key factors in a company’s decision to base itself in the UK. We do not need more evidence of that than the three recent announcements I mentioned earlier.
As co-chair of the Automotive Council, I consult regularly with representatives of auto companies and listen to their views on how the UK can raise its international competitiveness. Our competitive business environment and regulatory system evidently continues to stimulate investment in the UK, but that can only come from a fruitful exchange with industry and by addressing concerns raised. For example, in February, we announced the British Industry Supercharger, a range of targeted measures to ensure electricity prices for key energy-intensive industries, including battery manufacturing, are in line with major economies around the world. An issue raised by many colleagues on both sides of the House is skills. We understand automotive companies need highly skilled individuals across the entirety of their business. One reason the UK is attractive is our world-leading universities, with four UK institutions in the global top 10, according to the QS world university rankings. But that is not all. We support the auto sector through the apprenticeships levy, with £2.7 billion in funding by the 2024-25 financial year. That will support apprenticeships in non-levy employers, often small and medium-sized enterprises, where the Government will continue to pay 95% of apprentice training costs.
We also recognise the importance of a level playing field. That is why, at spring Budget, the Chancellor launched a new capital allowances offer. Businesses will now benefit from full expensing, which offers 100% first-year relief to companies on qualifying new main rate plant and machinery investments from April 2023 until March 2026; the 50% first-year allowance for expenditure by companies on new special rate, including long life assets until 31 March 2026; and the annual investment allowance, providing 100% first-year relief for plant and machinery investments up to £1 million.
One issue that has already been touched on is our relationship and tariffs with Europe. To support our industry through the transition, we must also address any and all barriers to trade with partners and markets all over the world. Our closest trading partner is the EU, with whom we share not only climate goals and a trajectory towards electrification, but deeply integrated supply chains. Over 50% of cars manufactured in the UK and exported are destined for EU consumers.
For those reasons, we are working closely with industry to address its concerns about planned changes to the rules of origin for electric vehicles in the trade and co-operation agreement between the UK and the EU. Since signing a deal, unforeseen and shared supply chain shocks have hit the auto industry hard. That has driven up the cost of raw materials and battery components, making it harder to meet the changing rules. That risks industry in the UK and the EU facing tariffs on electric vehicles at a crucial time in the transition to electrification. I and the Government are determined to seek a solution to that shared problem and to work with the EU to fix it for 2024.
Liam Byrne
There are, of course, proposals by Chinese battery makers to consider investing in the UK. Can the Minister tell the House whether, if investments are made by those Chinese firms, the cars we make with those products will still be allowed to be exported tariff-free and will not get caught by new tariffs because of the amount of foreign content they might contain?
Ms Ghani
The right hon. Gentleman raises a valuable point. We need to ensure not only that we support UK manufacturers, but that new investors and entrants into the market are treated equitably. We know that, because of the negotiations taking place on rules of origin, there has been a consultation taking place in Europe on its anxiety about the market being flooded by cheaper EVs. Obviously, we need to allow customers to make a choice, but we have to ensure that UK manufacturers are not dealt a blow by any new Chinese entrants into the market. He knows my history when it comes to dealing with China and sanctioning. That is why I have been doing so much work not only to support our UK manufacturers, but to ensure our supply chain is resilient. I hope that will give him some confidence on this issue.
As I mentioned to the hon. Member for Luton South (Rachel Hopkins), this will impact EU manufacturers just as much as it impacts UK manufacturers; because they import more into our economy, it will be a heavier burden for them.
Rachel Hopkins
I thank the Minister for giving way again. On that point, given the impact on both the UK and EU automotive sectors, can she enlighten us any further on whether there would be any suspension of the ratcheting up of percentages in the rules of origin and a delay to implementation through those negotiations?
Ms Ghani
The hon. Member is asking me to comment on policy that is outside of my jurisdiction. It is led by the Foreign, Commonwealth and Development Office and the conversations will continue. The important thing to note is that we have to constantly and continually impress not on UK manufacturers, but on their sister representatives in Europe the impact it will have on European manufacturers as well. I think that, considering the issue will impact not only here but in mainland Europe, it will be resolved soon enough, while recognising that when dealing with the EU decisions tend to be taken very late in the day.
On supply chains and critical minerals, as I emphasised recently to the Business and Trade Committee, as part of our mission to secure a green and innovative future in UK automotive manufacturing, we need to ensure we develop key supply chains in Britain for battery manufacturing and electric vehicle production. I recognise that critical minerals are fundamental to producing batteries and anchoring the electric vehicle supply chain in the UK. We are accelerating our international collaboration, including recently signing partnerships with Canada, Australia, South Africa, Kazakhstan, Saudi Arabia, and Zambia, with more in the works, and engagement through the Minerals Security Partnership, the International Energy Agency and the G7.
We celebrated the announcement of the joint venture between British Lithium and Imerys—our UK-based lithium hub—on 29 June. By the end of the decade, it will supply enough lithium carbonate for 500,000 electric cars a year. We have also published “Critical Minerals Refresh: Delivering Resilience in a Changing Global Environment”, for which I was responsible. It highlights the progress to date and sets out our refreshed approach to delivering the strategy for UK businesses. As part of that approach, I have launched an independent task and finish group to investigate the critical mineral dependencies and vulnerabilities across UK industry sectors—including the automotive sector—and the opportunities for industry to promote resilience in its supply chains.
In plain numbers, the UK automotive industry employs 166,000 people, adds over £70 billion to the UK economy, and is our second largest exporter of goods. We are also home to more than 25 manufacturers—the role of the supply chains and small and medium-sized enterprises was mentioned earlier—which build more than 70 different vehicles in the UK, all of which are supported by 2,500 component providers and some of the world’s most skilled engineers. In 2022, we exported vehicles to more than 130 different countries and built more than three quarters of a million cars, with the onward trajectory rising year on year.
I am happy to add some more of those plain numbers: three, as in the three announcements I have made so far about recent investments in BMW, Stellantis and Tata; four, as in more than £4 billion of investment in a new gigafactory from the Tata Group; 40, as in 40 GWh, one of the largest gigafactories in Europe to be built in the UK—it is not about the number, but about the capacity; 4,000, as in up to 4,000 new jobs in addition to the existing 166,000; £600 million, as in the investment in its Oxford plant that BMW has just announced; and two, as in the two new fully electric Mini models being produced here in the UK. The Government are clearly not simply securing our world-class industry, but paving the way for the UK’s future in automotive manufacturing.
Royal Assent
Madam Deputy Speaker (Dame Rosie Winterton)
Before I call the shadow Minister, I have to notify the House, in accordance with the Royal Assent Act 1967, that His Majesty has signified his Royal Assent to the following Acts:
Lifelong Learning (Higher Education Fee Limits) Act 2023
Northern Ireland Troubles (Legacy and Reconciliation) Act 2023
Powers of Attorney Act 2023
Northern Ireland Budget (No. 2) Act 2023
Pensions (Extension of Automatic Enrolment) Act 2023
Animals (Low-Welfare Activities Abroad) Act 2023
Workers (Predictable Terms and Conditions) Act 2023
Protection from Sex-based Harassment in Public Act 2023
Veterans Advisory and Pensions Committees Act 2023
Firearms Act 2023.
Tata Steel: Port Talbot
Nusrat Ghani Excerpts(1 year, 2 months ago)
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The Minister for Industry and Economic Security (Ms Nusrat Ghani)
The Government have agreed on a proposed joint investment package to provide £500 million to Tata Steel as part of their proposed £1.25 billion project to move to low carbon steel making in Port Talbot, subject to the necessary information and consultation processes that will be led by the company.
Through investment in a state-of-the-art Electric Arc Furnace at Port Talbot, this deal will support the UK’s efforts to meet increasing demand over the next decade and enable industry to take a significant step towards decarbonisation. It will strengthen our supply chain resilience, as well as protect thousands of skilled jobs across South Wales and the UK for the long term.
The Conservative Government have been supporting the UK steel industry for many years. The industry has been acutely impacted by recent wider geopolitical and macro-economic developments that have made traditional, blast-furnace steelmaking financially unviable. The global steel market has become saturated with heavily subsidised, carbon-intensive steel, while Putin’s invasion of Ukraine has dramatically increased energy costs. This Conservative Government will continue to stand by our steel industry, and this deal is part of our long-term plan for UK steel.
This ambitious transformation is the culmination of several years of negotiations between the Government and Tata Steel, and is one that has been backed by a majority investment by the company.
This transition will:
Secure continued production of steel at Port Talbot;
enable the industry to take a significant step towards decarbonising; and
provide a clear pathway towards a long-term financially and environmentally sustainable business model, removing the repeated need for Government intervention.
The Government are also enabling this major transformation and modernisation of the steel sector through key policy changes, including delivering the British Industry Supercharger to make electricity prices competitive for energy intensive industries.
Steel is a strategically significant industry which plays a vital role in the UK economy. The sector supports tens of thousands of UK jobs and remains a key driver for local economic growth in regions with proud steelmaking histories. It is also an industry in urgent need of modernisation. Decarbonising industry is a global challenge to meet the temperature goals of the 2015 Paris Agreement.
By replacing Port Talbot’s existing coal-powered blast furnaces, and assets nearing the end of their effective life, with an Electric Arc Furnace, this proposed project is expected to reduce the UK’s entire business and industry carbon emissions by 7%, Wales’s overall emissions by 22% and the Port Talbot site’s emissions by 85%.
This agreement with Tata represents the best offer and result for the UK and the people of South Wales. This package represents one of the largest support offers in recent history and will secure long term jobs, not just in Port Talbot, but across all of Tata Steel’s sites in England and Wales. It is a deal that not only safeguards jobs, but one that will help build greater resilience in the UK economy and will help create new opportunities in our construction, automotive and energy sectors.
During this transition, the UK Government will also ensure a broad range of support for staff who are affected by the transition, working with the Welsh Government and Tata Steel to provide up to £100 million of funding—in addition to the transformation investment —for a dedicated taskforce to support both employees and the local economy.
As part of the proposal Tata Steel will also release land in Port Talbot for redevelopment and use for new industrial businesses. Alongside the UK Government’s proposal for the Celtic Freeport and the land at Port Talbot which Tata expects to release for transfer or sale following the transition from blast furnaces, the investment could help unlock thousands of new jobs in both the South Wales and wider UK economy.
The funding proposal is subject to extensive scrutiny of detailed business plans, vigorous due diligence and subsidy control assessments. It will include strong conditions around financial probity, governance and delivery.
The landmark proposal builds on other major investments in UK green technology by Tata Group, including the July announcement of a £4 billion battery gigafactory creating 4,000 direct jobs, and represents a major vote of confidence in the UK.
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Shipbuilding Credit Guarantee Scheme Update
Nusrat Ghani Excerpts(1 year, 2 months ago)
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The Minister for Industry and Economic Security (Ms Nusrat Ghani)
Further to the statement by my hon. Friend, the Minister for International Trade last week, I have today laid the accompanying departmental minute before Parliament describing a contingent liability arising from the launch of a shipbuilding credit guarantee scheme.
The SCGS is a finance instrument which will provide guarantees to banks in respect of loans made to vessel owners and operators seeking to place orders at UK shipyards. The scheme will guarantee a portion of the value of eligible loans, sharing the risk with lenders to encourage offers of finance to UK vessel owners and operators.
The SCGS is one of a number of targeted interventions being taken as part of over £4 billion of Government investment planned through the Government’s national shipbuilding strategy refresh, to encourage UK ship owners and operators to place new orders and upgrade their existing fleets with world-leading shipyards that are based up and down the UK. HM Treasury has approved the arrangements.
In addition, I hereby give notice of the Export Credits Guarantee Department’s—known as UK Export Finance, UKEF—intention to seek an advance from the contingencies fund. This was made over recess, and I am notifying Parliament at the earliest opportunity. I have previously notified the Chairs of the Public Accounts Committee and the Department for Business and Trade Select Committee. UKEF will act as service provider to DBT. It will manage inquiries and applications under the SCGS and DBT will cover resource and other costs. To have the necessary approvals to undertake this work on behalf of DBT, UKEF must apply for a contingencies fund advance.
Parliamentary approval for additional resources of £105,000 for this new expenditure will be sought in a supplementary estimate for UK Export Finance. Pending that approval, urgent expenditure estimated at £51,000 will be met by repayable cash advances from the contingencies fund.
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Retained EU Law Update
Nusrat Ghani Excerpts(1 year, 2 months ago)
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The Minister for Industry and Economic Security (Ms Nusrat Ghani)
I am pleased to be able to update the House on progress regarding the usage of the Retained EU Law (Revocation and Reform) Act, with further revocations of Retained EU Law being tabled today in the Retained EU Law (Revocation and Reform) Act 2023 (Revocation and Sunset Disapplication) Regulations 2023.
These 93 revocations continue the work already undertaken in schedule 1 of the Retained EU Law (Revocation and Reform) Act in tidying and bringing further clarity to the statute book. This wave of revocations focuses on legislation that is redundant and therefore does not reflect policy change; however, it is a crucial exercise to tidy up the statute book and make sure that law is accurate and understandable.
Indeed, one of the key purposes of the Retained EU Law (Revocation and Reform) Act was to bring legislative clarity. Retained EU law is an aberration on the statute book which can cause unnecessary complication and confusion. It is the duty of all responsible Governments to make our law as clear and accessible as possible, and therefore we must continue to identify retained EU law that is redundant or inoperable and ensure its removal from the statute book. This SI is another step forward in this work.
However, let me be clear: simply tidying the statute book is not the limit of this Government’s ambition on retained EU law.
The steps the Government have already taken are a down payment on our plans to reform REUL and reduce the overall regulatory burden. Over the past few months we have already set out ambitious reform plans, such as reforms to reduce disproportionate EU-derived working time reporting requirements that could save businesses around £1 billion a year; and streamlining the 400-page EU-derived rulebook for wine, which is overly complex and bureaucratic, to name only two examples. Announcements to make clear the requirements on businesses and improve the lives of our citizens through improving consumer transparency, as well as on transport and travel, and on how the Government work with regulators to ensure they are playing their part in this effort, are all planned for the coming months.
We will continue to use the powers in the REUL Act between now and June 2026 to reform and replace unnecessary regulations, providing regular updates to Parliament on our progress as set out in the Act itself. This reform programme is a crucial part of the Government’s agenda and I can assure the House that this is only the beginning. I will of course provide further updates on reforms in due course.
The SI also contains a small number of preservations from the original schedule, as after further analysis of the legislation on the schedule, Departments have identified four pieces of retained EU law that it is necessary to preserve.
Furthermore, the Northern Ireland Civil Service has identified three pieces of legislation which must be preserved for Northern Ireland only. All three pieces relate to information provision and promotion measures concerning agricultural products implemented in the internal market and in third countries. These must be preserved for Northern Ireland only because their revocation represents a policy change that would require agreement by Ministers in the Northern Ireland Executive which cannot be granted in the ongoing absence of that Executive.
A line-by-line explanation, providing further information on all pieces of REUL being revoked, has been deposited in the House Library and is available on gov.uk.
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Tata Group Gigafactory Investment
Nusrat Ghani Excerpts(1 year, 4 months ago)
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The Minister for Industry and Economic Security (Ms Nusrat Ghani)
I am pleased to update the House about the significant investment announced by Tata Group just yesterday. The confirmation that Tata will be investing over £4 billion to build a new gigafactory—the largest in Europe, I believe—in the UK is a historic moment and a major vote of confidence in our automotive sector.
Across Government, we have worked closely with Tata for the past two years to help secure this crucial investment for the UK, and its decision to invest here is a testament to our strong partnership with Tata. Tata’s announcement represents one of the largest investments we have ever seen in the automotive sector, and is part of a new wave of investments—as significant as those made in the 1980s—that are helping to turbocharge our transition to zero-emission vehicles. It will also be the group’s first gigafactory outside India, directly creating up to 4,000 highly skilled new jobs, alongside thousands of further jobs in the wider supply chain for battery materials and critical raw materials.
Tata says that the battery gigafactory will produce high-quality, high-performance, sustainable battery cells and packs for a variety of applications within the mobility and energy sectors. As the anchor customer, the new gigafactory will supply Jaguar Land Rover’s future battery electric models, including in the Range Rover, Defender, Discovery and Jaguar brands. That means we will soon see cars from JLR’s iconic British brands manufactured in the UK, powered by batteries produced in the UK and developed using technology from research and development centres in the UK, before being exported to markets all over the world. Battery production at the new facility will commence in 2026, and we look forward to confirmation of the site’s location once due diligence has been finalised. When operational, Tata expects it to be one of the largest buildings in the UK and plans to maximise its renewable energy mix, with an ambition for 100% clean power.
The investment is also an important reflection of the UK’s position as a key location for European and global automotive manufacturing. With an initial output of 40 GW, the new factory confirmed yesterday will be one of the largest in Europe. As well as being a significant moment for the UK, this investment will play an important part in strengthening economic resilience across Europe in the highly integrated supply chain for the automotive sector and other key sectors. Using the Faraday Institution’s estimates, it will provide almost half of the UK’s required battery production by 2030, boosting the battery manufacturing capacity we need to support the electric vehicle industry in the long term.
The Government are committed to supporting the automotive sector and the electric vehicle supply chain to take full advantage of the move to zero-emission vehicles, and we are putting this commitment into action through the automotive transformation fund, the British industry supercharger and our strong programme of support for research and development. We are working alongside industry to unlock further private investment in our EV supply chain, and we have long-standing and comprehensive programmes of support for the automotive sector, including the ATF, the Advanced Propulsion Centre and, of course, the Faraday battery challenge.
This investment is an important milestone in enabling a UK-made transition to net zero. However, it does not stand in isolation. It builds on other announcements that have been secured with the support of Government, including Nissan and Envision plans to secure £1 billion to create an EV manufacturing hub in Sunderland, Ford committing a total of £380 million to make Halewood the first EV components site in Europe and Stellantis investing £100 million to transition Ellesmere Port to electric van manufacturing.
The transition to zero-emission vehicles gives us a once-in-a-generation opportunity to shape the future of manufacturing. Over 166,000 people are directly employed in the automotive sector, and I am delighted that yesterday’s announcement means that thousands of new highly-skilled jobs will be created in the next few years just for this project alone. This fantastic news from Tata shows that the Government are getting behind business to unlock the barriers to growth and secure further investment, and it will be a real boost to the entire sector. I look forward to building on the momentum and continuing our strong relationship with the sector, so that we can move the UK forward in the race to net zero and support the delivery of the Prime Minister’s priority to grow the economy. I commend this statement to the House.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I beg the right hon. Gentleman’s forgiveness. I was being distracted by another right hon. Gentleman, who ought to know better, and I therefore did not call the Minister to answer. I do apologise.
Ms Ghani
I think maybe we got a bit noisy as we were trying to fully digest the slightly delusional response of the Opposition Front Bencher, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), to this statement. Our job as representatives of the automotive sector is to praise, protect and promote, not to play politics, especially with investment this substantial.
Tata’s investment is so substantial. It is 40% of the gigawatts that we need, and fundamentally we need to have 100% by 2030. With Tata and Envision, we are two thirds of the way there. Obviously we want more, but we are not going to be complacent. We should not compare ourselves with the rest of Europe when their needs will be substantially different from ours, but let us take a moment to reflect on what is happening internationally. This is a global race to achieve net zero. Tata has decided to come here to the UK because it has faith in UK workers, UK technology and UK innovation. It has confidence in the UK supply chain, but fundamentally it has confidence in the UK Government’s policy when it comes to advanced manufacturing and the automotive sector.
The hon. Gentleman spoke about the automotive transformation fund, which is a £1 billion fund to support exactly this sort of initiative, but let us just reflect on the bonanza—I am not sure that is the right term—that the Opposition are offering. It is £28 billion in their plan, which is a lot of money for the taxpayer to front up for an un-costed plan that, as far as I am aware, is not endorsed by anyone in the advanced manufacturing sector and what they want to achieve. As we are getting close to our summer holiday, the £28 billion of un-costed promises that the Opposition are making are a bit like lines in the sand. We can look down at them, but the tide of reality will come in.
The Opposition’s proposals mean nothing to industry or to job creation. They are created within the Westminster bubble. [Interruption.] If the Opposition do not believe me, they should listen to the Society of Motor Manufacturers and Traders, the umbrella organisation for the automotive sector. It has talked about the substance in the UK supply chain, which will be a part of this initiative going forward. Unlike anywhere else in Europe, we have a fantastic supply chain with graphene, silicon carbide wafers—I am learning so much—power electronics, batteries and powertrains. It is a substantial boost to our supply chains in the UK. As the hon. Gentleman knows, I am working not only on our critical minerals strategy but on our supply strategy, to make sure we are using UK innovation and UK goods across all our supply chains, and in particular in the automotive sector. I urge him to have some humility and to reverse, and to praise, promote and protect the sector, and definitely not to play politics with it; that is a very weak thing to do.
There are challenges dealing with the rules of origin. As the hon. Gentleman knows, not only the Prime Minister but the Secretary of State are in intensive talks with the European Union. This is an issue not just for the UK; it is also about cars made in the EU being transported into the UK. It is a two-way system. I urge everybody in the House who has contacts with European counterparts to ensure that they make it very clear that this will be damaging for European car manufacturers as well.
Let me turn to the zero-emission vehicle mandate. I have taken many a delegation to the Department for Transport, which is responsible for this bit of policy, and I am keen to back business. The consultation has concluded and results will come through, and we will continue to work with the DFT. My position has always been to back the automotive sector. The hon. Member for Stalybridge and Hyde does not seem to appreciate how substantial the investment is. We should be focused on the £4 billion, the 4,000 jobs and the resilience in the supply chain—the 2,500 small firms across most of our constituencies that will be getting some support because of this fantastic confidence in the UK car and automotive sector, and fundamentally in UK policy when it comes to advanced manufacturing.
Dominic Raab
I warmly welcome the Government’s announcement and Tata’s decision, which highlights the tech potential of the UK. Does the Minister agree that our longer-term strategy, as I think she was setting out, is that we will not be able to engage in a bidding war on subsidies with the US, China and the EU, and that our comparative advantage will be shoring up the supply chain in the context of EV batteries, which means lithium deposits in the south-west and our emerging refinement capacity in Teesside?
Ms Ghani
I warmly welcome my right hon. Friend’s statement and agree with every single point he made. He mentioned the lithium mine in Cornwall, which will eventually produce enough lithium for 500,000 electric cars and vehicles. There is such success for our supply chain because this Government have a strategy that is embedded in the real-world politics of dealing with the automotive sector, and our critical minerals refresh was exactly the support required for the lithium mine in Cornwall.
It is not just about the financial support; it is also about the ecosystem. Fundamentally, the organisation had faith in initiatives such as the Faraday battery challenge, the Advanced Propulsion Centre and the tech in the UK. All the components that are required are here in the UK, and we have been able to link that ecosystem and supply chain together, which gave Tata the confidence to come and build the biggest gigafactory in Europe here in the UK.
Stewart Hosie (Dundee East) (SNP)
I thank the Minister for her statement and early sight of it. I agree that battery manufacturing capacity is important as part of our move towards EVs, away from petrol and diesel vehicles, and towards all our targets to achieve net zero. It would be remiss of me not to mention that a few years ago, as I am sure the Minister recalls, Dundee was given the “most EV visionary city in Europe” award by the World Electric Vehicle Association in Japan.
Let me turn to the statement itself. A £4 billion or so investment by Tata—that’s good. Substantial investment by Envision in battery production in Sunderland, plus the other investments the Minister mentioned, are of course all welcome. Yet that is broadly a comparable sum—around £6 billion—to the investment in the EV charging network we have been promised by 2030. Does the Minister think we are on track to have the right balance between investment in the supply chain and battery production capacity, and in the EV charging network. That network is where most drivers intersect with the system and it is the largest cause of frustration when it does not work or breaks down.
Ms Ghani
I do not think it gets any more positive from the SNP on this point. I am pleased that the right hon. Gentleman welcomed the £4 billion investment and the more than 4,000 jobs, and the confidence we have in the advanced manufacturing sector in the UK; that was such a positive response to what this Government have been able to achieve. I was not aware of the Dundee point, but I will go away and look it up. So many people have been responsible for getting this project over the line and so many have been campaigning for gigafactories. In particular, my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) has been campaigning for gigafactories for longer than I have been in Parliament, so huge thanks go to him and to everyone else who helped to get this project over the line.
On charging points, as the Minister of State, Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) said in last week’s debate on the automotive sector, ChargeUK has committed to investing more than £6 billion in the development and operation of charging infrastructure before 2030. We heard in that debate that some colleagues felt the investment in their constituencies was not substantial enough. We need to make sure that as demand for EV vehicles grows—there has been much more demand and many more sales recently—the charging infrastructure stands up to that. As the Minister responsible for the automotive sector, I know we are doing everything we can to fulfil our part of the bargain, as it were, but we need to make sure that charging infrastructure is rolled out as fast as it can be. Substantial targets are being met and the Transport Minister is keen to take up constituency cases to make sure that the roll-out is fast as it can be.
Andrew Selous (South West Bedfordshire) (Con)
I am absolutely delighted by this announcement. A number of my constituents work in the Vauxhall van factory in Luton, which makes a fantastic Vivaro van that we want to get electrified. Will the Minister say a little more about how we complete the final piece of the picture so that every car plant in the UK is reassured that there will be UK-made batteries? Yesterday’s announcement was fantastic, but one or two of us are concerned about that last piece.
Ms Ghani
I hope to get an invitation to visit that plant and my hon. Friend’s constituency, and I will of course do my best to promote Vauxhall vans. What is really exciting about this initiative is that it is about producing batteries not just for JLR but for the whole market, which is crucial. With the Tata and Envision gigafactories, we are two thirds of the way to getting to the 100 GW that the Faraday challenge believes we need. We are not complacent and are still going to do everything we can to secure further investment and seek further growth in this area, but for the moment we need to accept that this gigafactory could have gone anywhere in Europe, and there were huge talks about where it was going to be, but Tata had confidence in the UK and decided to come home to us.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
May I say, Madam Deputy Speaker, what a pleasure it is to see you back in the Chair on a regular basis? I wish you and everybody else who works in Parliament a very good recess when it comes.
This is a very welcome announcement. Tata is a good company and this is a big day and a big announcement. Of course, this investment should have been in Huddersfield —I would say that, wouldn’t I?—because we have a wonderful engineering skillset. I do not want to be a downer, but I warn the Minister of this: by the time building work on the canal system was finished, everybody had lost their shirt on their investment because the railways came unexpectedly and all the investment was wiped out. I have recently visited JCB, which has developed hydrogen-powered vehicles; will the Minister make sure that the Government focus equally on hydrogen? Many of us believe that, rather like the railways and the canals, hydrogen will come almost out of the blue and be the major, much more sustainable, future mode of transport.
Ms Ghani
The hon. Member is absolutely right that Huddersfield is a great place. We are not complacent: if the right opportunity, investment and partnership is put forward, we will of course consider that. We want to make sure that we continue to grow our gigafactory capacity. I knew that the hon. Member was going to touch on hydrogen, which he talks about often. The work we are doing with the ATF is not just about electric vehicles but about how we adopt all new functioning technologies to get to the first stage of zero emissions, and then to the next stage and so on. There are opportunities for hydrogen projects to come forward. Just a few weeks ago I visited a major construction project where not only the vehicles on site building and developing the port and the infrastructure were going to be hydrogen, but the vehicles moving on and off the site were to be well. Hydrogen is very much in our sights too.
Fiona Bruce (Congleton) (Con)
I warmly welcome this announcement. Does my hon. Friend agree that it shows this Government’s commitment to real and tangible green investment in the crucial automotive industry, in its supply chains and in many connected businesses throughout the UK, including the environmentally exemplary, forward-thinking transport logistics company in my constituency, Brit European?
Ms Ghani
Brit European sounds like one of the firms I need to meet. No doubt my hon. Friend will invite me to visit, and I look forward to meeting the firm with her. She is absolutely right: this is a huge vote of confidence in our ability to adopt new technologies to achieve net zero. It is not just about finding and securing new sources of critical minerals; we are at the leading edge of battery recycling too. The UK Battery Industrialisation Centre will help us to stay at the forefront of recycling.
Daisy Cooper (St Albans) (LD)
My constituents are desperate to embrace the transition to electric vehicles, whether cars, vans or buses, but electric cars remain far too expensive, and the charging infrastructure barely exists—and where it does exist, it is not reliable. Although investment is welcome, we need a consistent strategy. If the Government are serious about reaching net zero, I urge the Minister to look again at reintroducing incentives to take up electric vehicles. Will she consider giving local authorities a statutory responsibility to roll out, with pandemic-style urgency, the EV charging infra- structure that we so desperately need?
Ms Ghani
When the council in my constituency was Conservative-led, it had a substantial charging point infrastructure roll-out plan, which it had secured itself. When a council is ambitious, it is amazing how much work can be done. We know that sales of electric vehicles are up, as are EV exports and manufacturing, and prices will come down as more come on the market. I am slightly anxious about the sort of incentives the hon. Lady is asking for, if it means just another extra cost to the average taxpayer. We have really good charging infrastructure and fantastic supply chains. As this investment increases confidence in our supply chains, manufacturing will continue to increase and the cars will become even more attractive. My constituents, like hers, want to leave a leaner and greener footprint on the Earth.
Mr Louie French (Old Bexley and Sidcup) (Con)
This is fantastic news for the UK economy, with thousands of skilled jobs and investment in the transition to a lower carbon future. Does my hon. Friend agree that, while Labour continues its rather odd tribute act to new Labour and the likes of Lord Prescott, who famously had two Jags, it is the Conservatives who are delivering inward investment in our country and the UK car industry that will deliver much more?
Ms Ghani
I have learned that it is not a good use of one’s time to focus on what the Opposition are offering, because they U-turn so quickly; by the time one has closed the book they have just published, they have changed their mind. Let us not fret about that.
My hon. Friend is absolutely right. Investment in the automotive sector is on a fantastic trajectory, with not just this commitment but those from Stellantis, Ford, Envision and Nissan. That is because we have a really stellar agenda on how we create and adopt new technology to ensure that advanced manufacturing in the UK competes internationally, as we did with steel, including by helping with high energy costs, which are now coming down. We work hand in glove with the industry. We do not sit around in a Westminster bubble, creating new budgets that are completely uncosted and endorsed by no one in the sector. Yesterday’s and today’s news is fantastic for the automotive sector.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I too welcome the announcement—I genuinely do—but we are miles behind European competitors. Some of that is Brexit-related, but mainly it is due to the lack of an industrial strategy, which is even more important in the net zero-related sectors. This Government are miles behind right across the EV sector; other countries are ramping up incentives, but this Government are slashing them. As a result, sales are plateauing. The charging network outside London is a postcode lottery, with some places a charging desert. Scotland had a strategy from day one. That is why we have twice as many rapid chargers per head than even London. When will the Government treat this issue with appropriate urgency?
Ms Ghani
I am afraid the hon. Gentleman is just wrong. First, car sales are up, car manufacturing is up, and car exports even into Europe are up. I am not sure what his view is. He welcomes the £4 billion investment to create the largest gigafactory in Europe, but just cannot bring himself to dwell on the good news it brings to so many of his businesses that will, no doubt, be involved in the supply chain helping us to deliver the cars that will now have UK-made batteries.
Paul Howell (Sedgefield) (Con)
Like so many, I welcome this statement. It provides an incredible, positive message for the UK and for the way we are attracting businesses of the right sort. However, we must remember that there is an existing motor supply chain and it will be taking on many challenges as the industry moves across from what we have now into the electric market. One of the suppliers in that market space is Gestamp in Newton Aycliffe. It supplies motor manufacturers all over the world and is a tremendous company. The Minister has been asking for invitations to visit other businesses, so I invite her to come and see Gestamp and to have a good conversation about the way the supply chain is being impacted by these tremendous investments.
Ms Ghani
My hon. Friend is such a champion of the businesses in his constituency. May I provide him with some confidence? Securing this investment is about providing assurances to everyone in the supply chain that there is now a bigger game for them to play—there will be far more production, sales and, obviously, work for them to do. My hon. Friend has invited me previously; it is an outstanding engagement and I look forward to visiting him shortly. I chair the Automotive Council so I meet a lot of small and medium-sized enterprises, but if I have not already met the firm he mentions, I suggest he gives my private office a little nudge and I will make sure I correspond with the firm shortly.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
By 2025, Germany is set to have 10 times more battery capacity than the UK, while the US is set to have 30 times more capacity. I welcome yesterday’s announcement of Tata Group’s investment in a UK gigafactory, but will the Minister confirm exactly how the Government plan to ensure that this will be just the first, not the last, such announcement?
Ms Ghani
The hon. Gentleman has done his homework, but the most important point he needs to remember is that to meet our demand in the UK we need 100 GW. That is not a decision we have taken; it is a piece of work done by the Faraday Institution. Comparing us with the USA or Germany does not really work well, because we are trying to deal with the manufacturing that we have in the UK. So, we need 100 GW; this announcement provides 40 GW, and we have 12 GW with Envision and Nissan, which may go up to 38 GW if they wish to expand. Potentially we are two thirds of the way there, but we do not want to be complacent. When drawing international comparisons, we have to ask how many of the countries—whether the USA or Germany—are two thirds of the way to meeting their battery needs. This is of course not the first or the second step, because we have Nissan already with Envision, but yesterday’s announcement is substantial and we will of course continue to go forward. It shows huge confidence in the UK supply chain and will no doubt attract further investment.
Sara Britcliffe (Hyndburn) (Con)
This is absolutely fantastic news for the UK. Much of the supply chain in east Lancashire can grow further and faster with Government commercialisation and focused investment and support. Will my hon. Friend confirm that the Government are committed to making the UK a leading player in the whole of the EV battery space and that they will work with businesses such as Emerson and Renwick in Hyndburn and Haslingden to support growth in the supply chain?
Ms Ghani
My hon. Friend is a true champion of her constituency and all the firms within it. I am keen catch up with her now we know we have this fantastic deal and to see what more we can do for the many firms in her constituency. We want to make sure that everybody in the supply chain can be involved in this programme of work as it comes through. We have a number of initiatives, whether it is the automotive transformation fund or the Faraday challenge, to ensure that we are doing everything we can to adopt the new set of technology rules and de-risk any new technology that firms have in place. At the moment we think that that will boost 2,500 small firms, but of course if we can involve any more we will do that, and I look forward to sitting down with my hon. Friend and seeing what more we can do for her constituents.
Anna McMorrin (Cardiff North) (Lab)
Of course this new gigafactory announcement is very welcome, but it has taken time. How will it impact the industrial energy price? The Minister has not answered that question and we know that that price is a barrier to decarbonisation and that addressing it will ensure the transition to net zero and lower energy bills, which needs to be prioritised across all sectors and industries in our transition.
Ms Ghani
As a result of Putin’s invasion of Ukraine and high energy prices, we introduced substantial programmes to give energy-intensive firms the support that they needed. The next phase of that is the energy supercharger, which—as the hon. Lady will know—the Secretary of State for Energy Security and Net Zero has been talking about. We know that energy prices will fall in the near future, and that there will be a change in the mix of energy costs.
Tata came to the UK not only because it is, obviously, the best place in which to build a gigafactory and has a fantastic skillset, but because we could offer competitive energy prices. We have had conversations about that with a number of firms and investors. When energy prices were high and we were dealing with energy-intensive industries, we made sure that we provided the necessary support to protect those firms and their employees.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I thank the Minister for her statement, and welcome Tata’s investment. The Adam Smith Institute has said that securing sustainable foreign direct investment is fantastic, but that the UK should also be introducing supply-side reforms so that we can continue to champion carbon reduction on a global scale. In the light of that, what steps are Ministers taking to introduce supply-side reforms?
Ms Ghani
I am working with most industry representatives to establish what we can do about the supply side, not just through reforms but by giving them the assurance, accessibility and resilience that they need to get their products into the country and continue manufacturing, whether in the chemical or the aviation sector. We are working closely with industry, and I hope to present a supply-side input strategy by the autumn.
Rachel Hopkins (Luton South) (Lab)
I have pressed the Minister many times for support to enable good, skilled jobs in the automotive sector and supply chains to be retained in the UK, including those at Vauxhall in my constituency, to which she is obviously welcome to pay a visit at any time. May I now press her to tell us how many public money or subsidy arrangements have been entered into by the Government to support Tata’s welcome choice of the UK for its gigafactory? If she is coy about answering that question, may I also ask how much of the £1 billion automotive transformation fund is left to support existing businesses such as Stellantis, also in Luton South?
Ms Ghani
I know that a visit to Luton South is outstanding, and I hope that we can secure a date soon. The hon. Lady has asked a very good and clever question. As she has said, the ATF amounts to £1 billion, and in due course, with due diligence, the commitments from Tata will be made public. However, the numbers on which we should focus are these. Tata is investing £4.5 billion to build Europe’s largest gigafactory, which is guaranteed to create more than 4,000 jobs and support, potentially, 2,500 firms in the supply chain. Those are the numbers that we should be proud of today, having secured such a stellar investment in a sector that all of us in the Chamber —because we are here on a Thursday afternoon—clearly wish to protect and promote. We won this investment, over any other European country. Tata could have gone anywhere, but it came here because it had confidence in our workers, our companies and our ecosystem.
Jim Shannon (Strangford) (DUP)
I thank the Minister for making such a positive statement. Everyone was enthralled by the announcement that Tata is to invest £4 billion in an electric car battery manufacturing site in Somerset, which is wonderful news for commerce and jobs in the UK, not to mention our contributions to the commitment made at COP26 and COP27, but can the Minister tell us whether sites outside England will be considered in the future? It is said that four battery factories are needed. Has the Minister considered, or is she considering, Northern Ireland as one of those locations, with the aim of boosting commerce in all regions of the United Kingdom of Great Britain and Northern Ireland? I am committed to that aim, and I know that the Minister is. It is good to know that we can all gain advantage from this.
Ms Ghani
It is great that we have a major commitment to one of the biggest gigafactories in Europe. That will generate even more investment and more interest in building gigafactories in the UK. We will, of course, consider all proposals for sites that are brought forward by commercial partners who see value in building gigafactories in the UK. This commitment shores up what we have, takes us towards where we need to be in 2030, and will help us meet our need for batteries, but it will also attract new investment. This is a massive vote of confidence in the UK economy and the UK’s policies on the automotive sector.
May I wish everyone a wonderful summer break, and thank all staff, especially the staff in the Tea Room, who enable us to get through our very long days?
Madam Deputy Speaker (Dame Eleanor Laing)
Indeed. I thank the Minister on behalf of everybody who works in this building. I thank her for taking questions.
Automotive Industry
Nusrat Ghani Excerpts(1 year, 4 months ago)
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The Minister for Industry and Economic Security (Ms Nusrat Ghani)
What a disappointing opening speech. There was an opportunity to praise, promote and protect the automotive sector—and to talk about all the positive news stories—but all we have heard for the last 10 or 15 minutes was the automotive sector being talked down. I appreciate that the timing of this debate has not gone well for the Opposition: as my hon. Friend the Member for Bosworth (Dr Evans) mentioned, today we have heard about the Renault Group and Geely having chosen the UK as the headquarters of a new company developing ultra low emission engines and potentially investing billions of pounds in the UK—up to €7 billion. That shows not only the confidence of the automotive sector, but its commitment to the UK, and these are the opportunities or the stories we should be talking about.
The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) constantly referenced the SMMT statistics, but he forgot to mention the ones he should have reported at the Dispatch Box so that we could once again promote how healthy and dynamic the automotive sector is. Car production in Britain rose for a fourth straight month in May. The SMMT has confirmed that a total of 79,046 cars rolled out of the factory gates a few months ago, which is an increase of more than 26%. Passenger car numbers are boosted by a greater appetite for hybrid electric motors built in Britain. The bosses at the SMMT have said that, while there have of course been challenges around the world, manufacturers have
“defied the challenging economic backdrop to fulfil customer demand for the latest British-built models, at home and overseas,”
so that manufacturing and production are indeed up.
This is a positive news story, and any opportunity we have to speak about the automotive sector should be positive, not negative or all about political point scoring. This is a serious topic and a serious industry. I know the hon. Gentleman is keen to be very ideological within the Westminster bubble, but I would suggest he steps a little outside it. I know my hon. Friend the Member for South Derbyshire (Mrs Wheeler), who is a champion for Toyota, which has the largest manufacturing plant in her constituency, would welcome a visit by Labour Members so they can see how the sector is booming just in her constituency. There are over 2,000 people working at the plant in South Derbyshire and involved in the supply chains, and 80% of the cars manufactured are exported to Europe. Exports are up, by the way, which I will get on to. Toyota continues to innovate and it is at the forefront of producing hybrid cars. It has been cutting emissions for over a decade and takes net zero seriously, having energy from solar panels all around the plant. The point she would want to make is, “Get out of the Westminster bubble, visit South Derbyshire, see what is happening at Toyota”—and at many other firms, as I will go on to say—“and you will see the work is going well.” Our job is to protect, promote and praise, not to talk the sector down.
Sarah Owen (Luton North) (Lab)
It is all very well and good talking about optimism, but does the Minister accept the reality facing the automotive industry in the UK today, and the stark warnings given by Stellantis about future job losses if the Government do not sort out the rules of origin problems?
Ms Ghani
I want to state for the record—and for the hon. Lady, who was obviously sitting there while I was speaking—that that was not optimism. Those were the facts and figures promoted not by Government, but by industry representatives. I had a meeting with Stellantis recently. We know that a number of challenges are reflected globally, not just in the UK, such as being able to recruit into the sector. The hon. Member for Stalybridge and Hyde missed another opportunity to talk about the fantastic jobs that are available. Of course, on rules of origin, that is an issue not just in the UK; it is an issue for lots of other countries that want to export and import, too.
Ms Ghani
This Government have a strong mandate to reach net zero and the consultation has just taken place on said mandate. The right hon. Member will know that I have been spending a lot time with the automotive sector, including taking delegations to meet the Minister of State, Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who will be overseeing that. My job—I also chair the Automotive Council—is to champion business, and on occasion to try to remove all the barriers it needs removed for it to manufacture more and export more. I know that the Transport Minister will be speaking more about that later.
I will get on to all points the hon. Member for Stalybridge and Hyde raised, but he mentioned growing up in Sunderland. Just for the record—I can see there is a Birmingham MP here, the hon. Member for Birmingham, Perry Barr (Mr Mahmood)—I grew up in Birmingham very close to a car plant that employs many members of my family, including my brother Nasim, so this sector is very close to my heart. I have been told not to make any football jokes about Birmingham and Sunderland at this point; I will leave that for the final speech.
Matt Western
This point is not about football; it is about the debate. To pick up on the Minister’s analysis, she is correct on the statistics she gave about the UK market. She will know that we started from a pretty poor base post the pandemic and that our production was particularly hit, but other countries recovered better. It is an international market that is fighting for investment—I am sure she will accept that—and that is why it is of concern.
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.
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.
Dr Luke Evans
I am grateful to the Minister, because she alluded to the point that I was making about the automotive industry. We have talked a lot about manufacturing, but the UK is the world leader in things such as research and development, as well as in testing—autonomous testing, safety testing; we are literally the world leaders in this stuff. I mainly know that because a lot of it is based in my patch. Does the Minister agree?
Ms Ghani
I could not disagree with my hon. Friend, who is a champion for all things technology and transport, as well as for his constituency. The investment made in R&D has enabled large manufacturing firms to work closely with our academic institutions, and to de-risk some of the technologies that are now becoming mainstream, and we continue to support that area. That leads on to my next point about the Advanced Propulsion Centre and the automotive transformation fund, which are key in us trying to de-risk and adopt new technologies to drive the sector forward.
On the Automotive Council, the hon. Member for Stalybridge and Hyde said that he was engaging with the sector, but I am not quite sure where and when. A lot of the comments he made will not go down well with the sector because they were not very positive on all the work it has been doing. I engage directly with firms to see how hard they are committed to the sector, and what they expect from their politicians is support, not to be talked down.
I put on record my thanks to Graham Hoare, the current co-chair, Mike Hawes, Neville Jackson, Ian Constance, Markus Grüneisl, Paul Willcox, Murray Paul, Adrian Hallmark, Michael Leiters, Tim Slatter, Alan Johnson, Richard Kenworthy and many other indispensable members of the Automotive Council. I thank them for all the work they do, considering how challenging times have been not just for us but for our counterparts in Europe. I recently spoke at the Society of Motor Manufacturers and Trader’s parliamentary reception, and I welcome its “Manifesto 2030” with its five key priorities: green automotive transformation strategy, net zero mobility, green skills, made in Britain, and powering UK clean tech. There is a lot that we agree on, and I look forward to working with the sector to try to protect and strengthen the whole automotive industry. Car companies want to innovate, and we want to support them to do so. That is why the Government have an overarching goal of making the UK a global hub for innovation, as alluded to by the my hon. Friend the Member for Bosworth.
Greg Smith
In embracing that innovation—this is further to my intervention on the shadow Minister—the UK is a leader in the development of the synthetic fuel sector. By that, I do not mean fuels made from feedstocks; I mean green hydrogen merged with atmospheric carbon capture, whereby what comes out of the tailpipe is the same volume of carbon that is then recaptured to make the next load of fuel. With whole system analysis, that will be shown to be net zero, but the zero tailpipe mandate gets in the way of that. Does the Minister agree that, to embrace this innovation properly and to give an eclectic future to the automotive sector, we need to embrace those innovators as well?
Ms Ghani
We do need to embrace those innovators. One of the reasons we have so much investment in the UK in innovation and the automotive sector is that we are often first out of the door in helping to de-risk and test that technology. The Minister of State, Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire, will touch on tailings, but just last week I was at the Lower Thames Crossing, which is putting out a pitch to ensure that all vehicles on the construction site have green hydrogen. The several thousand vehicle movements on and off the site carrying freight will also have green hydrogen. The site is a port, and given the level of construction that is taking place, it may be one of the largest construction sites to get to green hydrogen first. I am not sure, but I think it is pretty well on track to being a world leader in that.
The UK-wide innovation strategy sets out our long-term plan for delivering innovation-led growth. Our primary objective is to boost private sector investment across the whole UK, creating the right conditions for all businesses to innovate, giving them confidence to do so and ensuring that we are leading the future by creating it.
Barbara Keeley
Will the Minister come on to the point that I raised with my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) about the roll-out of charging points? That is an important point. People are making decisions about electric vehicles, and we want them to make the right decisions. There is an absolute dearth of charging points in my constituency and many parts of Greater Manchester, and Westminster has installed more public electric charging points than the whole north of England. The Government are asleep at the wheel. When will they wake up and do something about that?
Ms Ghani
We are topping and tailing this debate with a Transport Minister and I know he is keen to touch on charging points, but the public charging network is growing quickly, and public charging devices have more than tripled in four years, from 10,300 devices in January 2019, to more than 43,000 in June 2023. The Government expect that around 300,000 charge points will be needed as a minimum by 2030. They are being rolled out at pace, but I do not doubt there will be constituency, case-by-case charge point concerns and the Minister will reflect on those.
One concern that the SMMT and all Members of Parliament who have manufacturing plants in their constituencies regularly raise with me is access to talent. Car companies need highly skilled individuals across the entirety of their business. One reason the UK is attractive is our world-leading universities, with four UK institutions in the global top 10, according to the QS world university rankings. But that is not all. We have supported the automotive sector through the apprenticeship levy, with £2.7 billion funding by the 2024-25 financial year. That will support apprenticeships in non-levy employers, often SMEs, where the Government will continue to pay 95% of apprentice training costs.
We recognise the importance of a level playing field. That is why, at the spring Budget, the Chancellor launched a new capital allowance offer. Businesses will now benefit from full expensing, which offers 100% first-year relief to companies on qualifying new main-rate plant and machinery investments from 1 April 2023 until 31 March 2026, the 50% first-year allowance for expenditure by companies on new special rate assets until 31 March 2026, and the annual investment allowance, which provides 100% first-year relief for plant and machinery investments up to £1 million.
Due to Putin’s invasion of Ukraine, energy costs have been an issue and a concern for the sector. That is why we have again intervened on behalf of the automotive sector, as well as many others, to ensure that the UK’s offer is competitive. It is why the Government have implemented a range of targeted measures to ensure that energy costs for high energy intensive industries, including battery manufacturing, are in line with other major economies around the world, levelling the playing field for British companies across Europe through the British industry supercharger scheme. In addition, to take just one example, the industrial energy transformation fund, now in its third phase, was designed to help businesses with high energy use to cut their energy bills and carbon emissions by investing in energy-efficient and low-carbon technologies. This Government announced £315 million of funding in the 2018 Budget available up to 2027.
The hon. Member for Stalybridge and Hyde talked about providing confidence and support for the sector, and I want to flesh out some of the announcements he was unable to bring himself to say at the Dispatch Box in case that was put into Hansard. Companies continue to show confidence in the UK, and we have announced major investments across the UK, including the £1 billion from Nissan and Envision to create an EV manufacturing hub in Sunderland. I was just on the phone to Envision this morning. It is an end-to-end supply chain. We have £100 million from Stellantis for its site in Ellesmere Port, and £380 million from Ford to make Halewood its first EV components site in Europe.
Jaguar Land Rover has also announced that it will be investing £15 billion over five years into its industrial footprint as part of its move towards electrification. That is great news for the west midlands, where JLR has three production sites, research and development facilities, and its headquarters. I am hugely confident that the UK will continue to attract investments large and small to enable the EV transition and deliver green jobs. Those are the stories we should be promoting at the Dispatch Box, not playing down.
The Government recognise the concerns of the sector, and we are dealing with serious global challenges, including rising costs because of Putin’s horrific war in Ukraine, supply chains disrupted by covid aftershocks and countries turning inward towards protectionism, by which, of course, I mean the Inflation Reduction Act. Acknowledging those issues, over the course of the summer I have been holding a series of business roundtables to understand exactly where the challenges in supply chains are most acute, and where the Government and businesses can work together more closely to ensure that the UK’s supply chains are resilient, now and in the future.
Those headwinds have been felt across the globe, and where the UK sector has been impacted, it has not been uniquely impacted. The entire automotive sector is midway through a once-in-a-lifetime shift away from the internal combustion engine towards zero-emission vehicles. That is good not just for our net zero ambitions; it also has the potential to provide wider economic and social benefits. Of course, our competitors know that too, and the race to secure zero-emission manufacturing capacity across the world is fierce. Some countries seem willing to spend eye-watering amounts. We will be offering targeted investment in the future of the auto manufacturing sector. That means focusing on exactly where we know we are ahead of the game internationally, offering targeted and measured support that reflects the size and scale of our outstanding automotive sector.
As I have said, we have more than a chequebook to attract companies to these shores; our highly productive and skilled workforce, focus on innovation and tech and the ease of doing business are key factors in a company’s decision to base itself in the UK. There is a backdrop of intensely challenging constraints on the sector globally, while the sector is undergoing a seismic technological transformation. It is clearly a difficult situation for manufacturers across the world, but there are positives to be considered, especially here in the UK. The SMMT reported that UK commercial vehicle production has just had its best May performance since 2008, growing by 36.9%—I thought the hon. Member for Stalybridge and Hyde might crack a smile for the sector—and year-to-date output is some 47.6% above the pre-pandemic levels of 2019. That is the message we want to send internationally. It clearly shows that the UK automotive sector is strong, dynamic and fundamentally capable. I want the UK to have a thriving automotive industry. As we take on these global challenges, we will take them on together with the sector.
Some mention was made of R&D support, and I will share all the work we have done. Our R&D and capital programmes delivered through the Advanced Propulsion Centre and the automotive transformation fund are positioning the UK as one of the best places in the world to design, develop and build zero-emission vehicles. They are working together to support the creation of an internationally competitive electric vehicle supply chain. In the coming months, after engagement with industry, the Government will build on those programmes to take decisive action and ensure future investment in the manufacture of zero-emission vehicles, as part of our commitment to building a cleaner, greener, more sustainable Britain fit for the world of the future, not the world of the past that the hon. Member for Stalybridge and Hyde is fixated on.
The automotive transformation fund supports the creation of an internationally competitive electric vehicle supply chain in the UK. It provides support to late-stage R&D and capital investments in strategically important technologies. That includes unlocking strategic investments in gigafactories, which I will come to, motors and drives, power electronics and fuel cell systems. Our automotive industry has a long and proud history. We are determined to build on our heritage as we invest in the technologies of the future, positioning the UK as one of the best locations in the world to manufacture electric vehicles.
I have spoken previously about the Advanced Propulsion Centre, because it does fantastic work in driving technology forward. It was founded in 2013 as a £1 billion joint venture between the automotive industry and the Government to help the industry meet the challenges of innovation and decarbonisation. It facilitates funding to UK-based research and development projects developing zero-emission technologies. The programme helps accelerate the development, commercialising and manufacture of advanced propulsion technologies in the UK. So far, it has supported 199 projects involving 450 partners. It is estimated to have supported more than 55,000 highly skilled jobs and is projected to save more than 350 million tonnes of CO2—the equivalent of removing the lifetime emissions of 14.1 million cars.
Those projects include the setting up of a joint venture between Unipart and Williams Advanced Engineering to manufacture batteries in Coventry, Danfoss setting up a centre of excellence for hydraulic R&D at its plant in Scotland, and Equipmake increasing the size of its manufacturing plant in Norfolk to meet demand for its electric drive unit. That shows how much work can be delivered and how many jobs created if we work with industry and help it de-risk in adopting new technologies.
I recently visited the Warwick Manufacturing Group, which the hon. Member for Stalybridge and Hyde alluded to. I am surprised he did not applaud the work further.
Ms Ghani
He could have gone further.
I saw at first hand the cutting-edge future mobility research being done in Coventry, the birthplace of British motor manufacturing. While in Coventry, I also had the opportunity to attend the Advanced Propulsion Centre to discuss how we can build on the success of our existing R&D and capital investment programmes. During the visit I met year 6 pupils from Templars Primary School in Coventry who attended the Advanced Propulsion Centre’s STEM day. That is a prime example of outreach activity to inspire the next generation of automotive engineers.
We cannot talk about the automotive sector without thinking about the broader supply chain and one of my particular passions, critical minerals, which I am surprised the hon. Member for Stalybridge and Hyde did not spend more time discussing. He missed out the key point of what is needed to produce electric vehicles. We know that China dominates the EV market, partly due to its grip on the supply chain. It controls much of the mining of crucial raw materials, and 80% of battery making for EVs is controlled by Chinese firms. It is also the world’s top car exporter.
I am not sure whether the hon. Member has had time to read Ed Conway’s recent book, “Material World”, which makes some key points on lithium. We know that reserves of the metal are concentrated in a handful of nations. In his book, he said that lithium reserves are concentrated in “a handful of nations”, so that “while the rest of the world panics about China’s dominance of the battery supply chain, many in Beijing are simultaneously panicking about China’s reliance on the rest of the world’s raw materials.”
We know that an EV car battery contains 40 kg of lithium, 10 kg of cobalt, 10 kg of manganese and 40 kg of nickel, and that is before we consider the graphite that goes into the anode. Those materials have to come from somewhere, which is why we updated our critical minerals strategy in the “Critical Minerals Refresh”—[Interruption.] That was a positive noise from the hon. Member—to ensure we were supporting the sector through the whole supply chain. I encourage colleagues to read Ed Conway’s book. I am not on commission, by the way; it is just a good read.
The hon. Member for Stalybridge and Hyde talked about not having a strategy, but we are working with industry to make sure it can plan for the future. To do that, we had the “Critical Minerals Refresh”, which came from the integrated review. We are making sure that we are focused on batteries and the EV supply chain here in the UK. Recent good news that the hon. Member also forgot to mention is the joint venture between British Lithium and Imerys, announced on 29 June. That is a massive boost to the critical minerals supply chain in the UK.
By the end of the decade, the development of Cornwall as the UK’s leading lithium hub will supply enough lithium carbonate for 500,000 electric cars a year. To help secure the supply of critical minerals, the Government have not only refreshed our critical minerals strategy, but put in place a task and finish group to work with industry so that it can highlight its particular vulnerabilities and we can provide it with the confidence and resilience it needs in its supply chains.
Most recently, I visited Indonesia, where I met Indonesian Ministers to emphasise that the UK has a lot to offer on critical minerals, particularly in relation to private finance, environmental, social and governance capabilities, and mining services. I also visited key mine sites and met companies that are critical in the battery supply chain and in critical mineral production, including some innovative UK companies showcasing the best of British—I know that sentence would be hard for the hon. Member for Stalybridge and Hyde ever to put on the record.
This year, I have also visited South Africa, where I represented the UK at the Minerals Security Partnership ministerial meeting and confirmed the UK’s intention to host the next such meeting during London Metal Exchange Week in October. I also visited Canada, where I signed the UK-Canada critical minerals statement of intent and launched our critical minerals dialogue with Canada, forging a key partnership with one of the most important global players in the critical minerals ecosystem. The hon. Member will want to have a moment to reflect on and applaud our work internationally and domestically on critical minerals.
Ms Ghani
So many—too many to list right now.
We also need to look at battery recycling. We want to create a regulatory space that supports the appropriate treatment of EV batteries. The Department for Environment, Food and Rural Affairs is currently reviewing existing UK batteries legislation and working at pace to publish a consultation in the second half of 2023. We have also funded the Faraday battery challenge, which has enabled research into the safe and efficient segregation and repurposing of EV battery cell components. Altilium is exploring how to recover the critical metals from old EV batteries and process them effectively so that they can be reused in new batteries. Reblend aims to develop the core processes and capabilities for a UK-based automotive battery recycling industry that can recover cathode materials from production scrap and end-of-life automotive and consumer batteries for reuse in automotive batteries going forward. We are not only trying to get close to host countries and make sure that we are mining ethically, but seeing how we can ensure that we are recycling batteries.
The Minister of State at the Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire, will touch on a few issues about the zero-emission vehicle mandate, so I will quickly touch on rules of origin. To support the transition, we must not only champion innovation but address all barriers to trade with partners and markets all over the world. Our closest trading partner is of course the EU, with whom we share not only climate goals and a trajectory towards electrification, but deeply integrated supply chains. More than 50% of cars manufactured in the UK and exported are destined for EU consumers. For those reasons, I am working closely with the industry to address its concerns about planned changes to the rules of origin for electric vehicles in the trade and co-operation agreement between the UK and EU.
Since signing the deal, unforeseen and shared supply chain shocks have hit the auto industry hard. That has driven up the cost of raw materials and battery components, making it harder to meet the changing rules. That risks industry on both sides facing tariffs on electric vehicles at a crucial time in the transition to electrification. I am determined to seek a solution to this shared problem and will work with the EU to fix it for 2024. The Prime Minister has raised the issue directly with European Commission President Ursula von der Leyen, and I and other Ministers are engaging with our EU counterparts. We will continue to work closely with industry to address any and all blockers to the electric transition so that our great UK auto industry continues to benefit from access to global markets and UK consumers have the best possible options as we make the switch to electric vehicles.
I wanted to touch on hydrogen, but I believe I am running out of time. I was also going to reflect on success in the aerospace sector, which is very much linked to the automotive sector, but I will not because I can see that you would like me to conclude, Madam Deputy Speaker.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. For the sake of clarity, there is plenty of time for the debate and the hon. Lady can take as long as she wants. She has so far held the floor for 32 minutes. It is not for me to judge how long she ought to speak for; it is for her to judge the mood of the House.
Ms Ghani
Well, I think the mood of the House is to be more positive about the automotive sector. I could list even more stories, but I will conclude because I believe that Opposition Members would despair about all the positivity about the automotive sector that we could talk about and reflect on.
We are home to more than 25 manufacturers that build more than 70 different vehicles in the UK, all of which are supported by 2,500 component providers and some of the world’s most skilled engineers. It is incredibly important to reflect how difficult it has been for the automotive sector globally, but of course we have huge success stories here in the UK. In 2022 we exported vehicles to more than 130 different countries and built more than three quarters of a million cars, with the onwards trajectory rising year on year. This is a healthy sector going above and beyond not only to reskill and upskill, but to meet net zero targets.
The Government are supporting the UK automotive industry, and the sector is a stalwart example of innovation and dynamism to the rest of the world. It is a great sector to get into, whether someone joins it as an apprentice or even by taking on a regular job. Of course, there is more to do. There are more opportunities to secure as we transition to zero-emission vehicles and we realise the potential of connected and autonomous mobility. We have already achieved a great deal in partnership with this fantastic sector, but we are determined to do more. We work with the sector—we do not sit in Westminster coming up with plans that we then U-turn on—and that has given the sector the confidence it needs to continue to invest in the UK. The job of those representing the sector is to praise, promote and protect, not to talk the sector down.
Several hon. Members rose—
Sarah Owen (Luton North) (Lab)
It is a privilege to follow my hon. Friend the Member for Llanelli (Dame Nia Griffith), who is right to talk about the importance of innovation and enterprise in this sector.
This is an important debate, which is why it is disappointing that there are now more Government Parliamentary Private Secretaries in the Chamber than there have been Conservative speakers in this debate. The public and workers will question why the Tories think so little of the automotive sector and will draw their own conclusions.
I am pleased that parliamentary time has been given today to focus on the automotive industry, which has a long and proud history in the UK. As we have already heard, from Sunderland to Coventry, Ellesmere Port and Luton, industrial cities and towns across the country have been hallmarks of manufacturing and quality production in our automotive sector for decades.
My constituents in Luton North have a particular interest in this debate. In a moment I will address the recent events at the SKF plant at Sundon Park in my constituency, but first I would like to discuss another automotive crisis facing the Luton community. Luton’s Vauxhall plant is based in the constituency of my hon. Friend the Member for Luton South (Rachel Hopkins). She is a champion for the automotive sector, and I wish the hon. Member for Bosworth (Dr Evans) had looked up how many times she has mentioned the automotive sector and industry, as he would have reached double digits for sure.
Vauxhall has been a proud industrial landmark of our town since 1905. The plant played a major part in the war effort during the 1940s, producing the Churchill tank and becoming a centre for repairing battle-damaged tanks. Thousands of Bedford lorries were turned out at Kimpton Road, including the QL, which was the company’s first four-wheel drive vehicle and a key feature of our country’s military fleet.
If we fast forward to the present day, we see that the Luton Vauxhall plant employs around 1,500 people from across our town and has been essential to creating skilled, unionised local jobs, running apprenticeship schemes for young people and fostering local talent, including across supply chains and other local businesses. The plant now specialises in producing vans, around 70% of which are exported to mainland Europe. I am so pleased to have had the pleasure of visiting the plant with my hon. Friend the Member for Luton South to meet the workers, and we saw how proud they are of what they turn out. Long may it continue, in the face of the challenge from this Tory Government.
Businesses such as Vauxhall not only provide jobs to people in Luton North, they are also intrinsic to our identity as a town. Generations have worked there, known each other and grown together. Automation changed the face and size of Britain’s automotive sector but, as quickly as we saw it rise, we are now sadly seeing it decline.
Thirteen years of Tory chaos have turbo-charged the closure of factories and the destruction of workers’ livelihoods. The Conservatives’ disastrous handling of Brexit negotiations, the explosion of the economy by the previous Conservative Prime Minister and the long abandonment of any semblance of an industrial strategy are just a few of many contributing factors.
Locally, even in the face of the Government’s evolving mess, we have seen a committed, quality automotive sector and supply chain in Luton, but it is now hanging by a thread. The Minister talked about optimism, but this is the reality facing thousands of workers across the country. Other jobs linked to manufacturing, the automotive industry and the supply chain are similarly under threat.
SKF is a major employer in my constituency. SKF is a ball bearing manufacturing plant, formerly closely tied to Volvo. SKF, like Vauxhall, has been a proud feature of Luton for more than 100 years, and it is another prime example of how this Government are sitting on their hands while they oversee the slow, managed decline of manufacturing in this country.
Last month, SKF announced its plan to close the Luton plant and move production to Poznan in Poland by the end of 2024. This is a devastating blow to our town and our local economy, and it could see the loss of up to 300 jobs. I went to meet workers and Unite union reps at SKF, and they are all deeply concerned about the sudden closure. They told me that, throughout covid, they were considered key workers. They operated and worked throughout, putting their safety behind production, for the good of the company and for the good of the economy.
Generations have worked at SKF in Sundon Park, and thousands have given their best working days to that business, only for SKF’s board members to turn their back on them and for this Government to turn their back on manufacturing workers again. Seriously, what do the Government want? A land of Amazons? A blanket of windowless storage warehouses, where people compete and break themselves to meet unrealistic and ever-increasing pick rates? That is what they are turning our country into.
I am pleased the Minister was keen to take up invites to visit Members’ constituencies, so will she please commit to meeting me and workers at SKF who face losing their jobs to see how we can save SKF’s future in Luton?
UK Car Industry
Nusrat Ghani Excerpts(1 year, 6 months ago)
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Justin Madders (Ellesmere Port and Neston) (Lab)
(Urgent Question): To ask the Secretary of State for Business and Trade if she will make a statement on the future of the UK car industry.
The Minister of State, Department for Business and Trade (Ms Nusrat Ghani)
The automotive industry is vital. It is a vital part of the UK economy and it is integral to delivering on levelling up, net zero and advancing global Britain. After a challenging period where covid and global supply chain shortages have impacted the international automotive industry, the UK sector is bouncing back. Production is increasing, and in 2022 the UK’s best-selling car was the Nissan Qashqai, built in Sunderland.
The automotive industry has a long and proud history in the UK. We are determined to build on our heritage and secure international investment in the technologies of the future, to position the UK as one of the best locations in the world in which to manufacture electric vehicles. We are leveraging investment from industry by providing Government support for new plants and upgrades to ensure that the automotive industry thrives into the future. Companies continue to show confidence in the UK, announcing major investments across the country, including £1 billion from Nissan and Envision to create an electric vehicle manufacturing hub in Sunderland; £100 million from Stellantis for the site in Ellesmere Port; and £380 million from Ford to make Halewood its first EV components site in Europe.
We will continue to work through our automotive transformation fund to build a global, competitive EV supply chain in the UK, boosting home-grown EV battery production, levelling up and advancing towards a greener future.
Justin Madders
Thank you for granting this urgent question, Mr Speaker, and I thank the Minister for her response.
The warnings from Stellantis overnight are deeply concerning, not just for my constituents who work at Vauxhall Motors in Ellesmere Port, but for the automotive sector more widely. She will know of the huge efforts put in over recent years to secure the future of the plant and to move to electric vehicle production; significant contributions have been made from the management, the workforce, the local authority and the Government themselves. So it is beyond frustrating that just a couple of years later we find ourselves once again in a position where there is a threat to my constituents’ livelihoods.
We know what needs to be done to secure jobs in Ellesmere Port and in the wider automotive sector, because the sector has been telling the Government, as have we, that there needs to be a proper industrial strategy. So where is that strategy? Indeed, where is the Secretary of State? The EU is pumping billions into manufacturing as part of its green industrial plan, the US is investing trillions with the Inflation Reduction Act and we are being left behind. Every day this Government sit on their hands, that mountain to climb gets a little higher.
So we need urgent action, but I am afraid that all I have heard this morning is complacency. We need those gigafactories with spades in the ground this year, because we know the timescales that the industry invests across are long and it needs to see progress now. So will the Minister tell us what steps the Government are actively taking to increase the proportion of vehicle parts manufactured in the UK? We need to make sure our trading relationship with the EU is updated to reflect the global supply chain difficulties that all manufacturing industry is facing. So does she plan to make a formal request to reopen negotiations with the EU on the trade and co-operation agreement? It has been made repeatedly clear that without changes to the future trading arrangements, and without a proper industrial strategy, the UK car industry is at risk. What assurances can she give to my constituents that their futures matter to this Government? The UK car sector is the jewel in the crown of our manufacturing industry. If we lose it, it will not be coming back. So please, Minister, take action now.
Ms Ghani
The hon. Gentleman will know, when I respond to this question, just how seriously I take the sector, as he does—he and I have worked on this previously. I agree that the automotive industry is a vital part of the UK economy and I will go on to explain all the work we are doing there; if we add it all up, it is more or less a very strategic strategy. We know that it is integral to delivering on our levelling-up agenda, which is why it matters to so many constituents and why there are so many MPs in the Chamber today. We know that it matters to net zero and to advancing Global Britain. We also know how important this is to Members of Parliament because of the number of people who work in the sector.
The automotive industry employs around 166,000 people and includes major manufacturers, such as Jaguar Land Rover, Nissan, Toyota and BMW. We are leveraging investment from industry by providing support for new plants and upgrades to ensure that the UK automotive industry continues to thrive into the future. This includes Nissan’s £1 billion north-east electric vehicle hub, Ford’s £380 million investment in Halewood to make electric drive units, and Stellantis’s £100 million investment in Ellesmere Port for EV van production.
We work closely with the sector through the joint Government and industry-led Automotive Council, of which I am the co-chair, which discusses opportunities for growth, competitiveness and future opportunities. We also meet regularly with individual long-standing and new automotive companies to discuss a range of issues, including future investments.
On Government support, the Government and industry have jointly committed approximately £1.4 billion in innovative projects through the Advanced Propulsion Centre to accelerate the development and commercialisation of strategically important vehicle technologies, strengthening our competitive edge internationally. We also work on the automotive transformation fund, which puts the UK at the forefront of transition to zero-emission vehicles.
Of course, I must not forget the Faraday battery challenge, which, with an overall budget of £541 million since 2017, worked to establish the UK as a battery science superpower. This is what keeps us at the forefront as we try to adapt and use a new technology.
I wish to put it on the record that there are regular reviews of the EU-UK trade and co-operation agreement, but, as the hon. Gentleman will know, that responsibility sits with the Foreign, Commonwealth and Development Office and is not something that I can respond to on its behalf. However, I can provide assurances—[Interruption.] I am just about to do so, if Members will allow me to continue. I can provide assurances that I and the Secretary of State for Business, Energy and Industrial Secretary have raised these issues with our colleagues across Government and have had productive conversations with our counterparts in the European Union. We are aware of the concerns of UK and EU car makers about the challenges and, of course, we continue to make strong representations.
Mark Pawsey (Rugby) (Con)
The automotive industry has been a huge success story for the west midlands and can be so in the future as we transition to electric vehicles. However, with 40% of the weight and cost of an electric vehicle being made up in the battery, it is vital that we get a battery manufacturing site in the west midlands. A site has been allocated at Coventry airport, immediately adjacent to the Battery Innovation Centre, where some innovative and brilliant work is taking place. Will the Minister provide Government support for the proposed gigafactory at Coventry Airport?
Ms Ghani
I am grateful to my hon. Friend for raising this issue. He and I worked together on the Business, Energy and Industrial Strategy Committee. He has always been a passionate advocate for his constituency. It is indeed a fantastic proposal and we are keen to make sure that we can support as much investment as possible and that sites are set up for gigafactories. We know how important it is to ensure that the supply chain is as reliable as possible. If my hon. Friend would like to meet me, we can go through the proposals in further detail.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I thank my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) for securing this urgent question on an area of fundamental importance not just to his constituency, but to the prosperity of the whole country.
For months now, Labour and industry have been warning the Government that this cliff edge was coming. It is a statement of the blindingly obvious that the lack of battery-making capacity in the UK, combined with changes to the rules of origin, was a car crash waiting to happen. It is a fact that, without domestic batteries, there will be no domestic automotive industry in the UK, yet the Government have no strategy to bring in the investment and infrastructure needed, and the rules of origin just make that even more compelling. This deadline to conform with the rules of origin has not been a secret, but where is the urgency, the ambition and the determination to keep our world-class automotive industry in the UK?
Once again, industry has been treated to a Government who are fond of big-state, top-down targets, but completely missing in action when it comes to how to deliver on those targets. Dare I say it that, despite warning after warning, it is clear that this Government are asleep at the wheel. Labour has a plan, through our industrial strategy—which Members can read as it is published—not just to protect the industry and the jobs that we have, but to deliver even more. We will part-finance those eight gigafactories, create 80,000 jobs and power 2 million electric vehicles, matching the incentives on offer from our rivals.
This is not just about public investment; it is about planning reform, changes to business rates, domestic energy security and supply, and more. That is the action that is needed. With respect, the Minister has not really answered any of the questions from my hon. Friend the Member for Ellesmere Port and Neston yet, so will the Government outline how they will secure the battery-making capacity that we desperately need in the UK? What is the Government’s view on the suitability and application of the rules of origin as they currently stand? Finally, will the Government wake up, grab the steering wheel and get control of the situation before it is far too late?
Ms Ghani
It is a good to hear that the Opposition are expecting businesses to make decisions on promises that may or may not come down the line, and on promises of sums of money that have been allocated and reallocated a number of times by the Labour party. This is not just my view: look at the figures from the Society of Motor Manufacturers and Traders, showing that British commercial vehicle production grew by 39% in 2022, the best since 2012, with exports surging by 63%. We are determined to make the UK the best location for export-led automotive manufacturing.
I am going to talk not about a promise, but about the programmes that are in place to ensure that supply chains and gigafactories are here to support the whole automotive sector. I have spoken about the Advanced Propulsion Centre—perhaps the Opposition do not understand how important that is—the Faraday battery challenge and “Driving the electric revolution”. We must not forget the Envision AESC announcement of its investment in a gigafactory in Sunderland or Johnson Matthey confirming its investment in the construction of a factory in Hertfordshire for proton exchange membrane fuel cell components for use in hydrogen vehicles.
Discussions are constantly ongoing with other potential investors into gigafactories in the UK. We are not doing this by ourselves in Government, making decisions that seem good on paper; as I said, I co-host the Automotive Council and just this week—possibly on Monday or Tuesday, I cannot remember—I caught up with Aston Martin, Bentley Motors, BMW, Ford, Jaguar Land Rover, McLaren Automotive, Nissan, Stellantis, Tesla, Toyota and the Volkswagen group. They are keen to continue working with us to ensure that we have supply chains here in the UK.
Greg Clark (Tunbridge Wells) (Con)
To secure the future of our vital automotive sector, we need to manufacture batteries in the UK. The industrial strategy in 2017, which my hon. Friend the Minister referred to, established the Faraday challenge to build on our cutting-edge research capability. The battery innovation centre was set up to develop manufacturing capacity. While the strategy is vital, and must be refreshed and continued, it is necessary but not sufficient; we need activism. When Mrs Thatcher lured Nissan and Toyota to this country, she travelled to Japan to make the case for locating here. Does that level of activism exist in the Government, and will the Minister commit to ensuring that we have those investments from companies around the world in the UK?
Ms Ghani
I believe that my right hon. Friend was the Secretary of State for Business, Energy and Industrial Strategy when the decision on the Faraday battery challenge was taken. He made sure that £211 million of funding was in place, so that technology could be developed to make batteries as efficient as they can be. That is just one part of our trying to secure investment into the UK. I can confirm that meetings are constantly taking place, including at Secretary of State level, with companies based in the UK and overseas, meeting with chief executive officers and chief financial officers to ensure that the UK is seen as an attractive place to manufacture cars. There is a global challenge around supply chains—it is not just a domestic issue—and we are keen to ensure that the UK continues to be seen as the best place to manufacture cars.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Minister is sticking her fingers in her ears and burying her head in the sand on this question. The Government were told time and time again about the rules of origin issues, and the car industry seems to be another casualty of the Government’s damaging Brexit. Increasing the uptake of low-emission vehicles is vital to meeting our net zero goals, but the UK’s disastrous trade deals are making the domestic manufacture of those vehicles impossible.
Stellantis has warned:
“If the cost of EV Manufacturing in the UK becomes uncompetitive and unsustainable operations will close.”
Has the Minister made an estimate of how many job losses it would lead to if the world’s fourth-largest carmaker closed its UK factories as a result of Brexit? Andy Palmer, a former chief operating officer, said that we are “running out of time” to get battery manufacturing in the UK, and that a failure to address the issues caused by Brexit will lead to the loss of 800,000 jobs in the UK. Car manufacturing has fallen sharply since the UK chose to leave the EU, from more than 1.5 million in 2016 to just 775,000. Does the Minister accept that the only way for Scotland to stop the decline of our industries is to gain independence and rejoin the world’s largest single market?
Ms Ghani
I would not expect anything less than a rerun of the conversation on Brexit. Fundamentally, the hon. Member does not like Brexit, does not like any trade deal, and does not even like the most integrated single market between England and Scotland, so I know that he has nothing appropriate to say.
Let us talk about the situation as it is: confidence in the UK automotive sector, and in the whole supply chain, has meant that Stellantis has invested more than £100 million in the Vauxhall plant in Ellesmere Port. That will see the plant transition to become the first mass-market all-electric plant in the UK, producing electric vans from 2023. That shows the confidence that that particular firm has in the UK.
We know that the production of electric units will go up, whether for private or commercial use, and we are doing everything we can to provide support on some of the more challenging issues in car manufacturing, such as access to energy and the cost of energy, which we have been working on as well. It is internationally challenging—I accept that—but the UK continues to be incredibly attractive for car manufacturing.
Andrew Selous (South West Bedfordshire) (Con)
Many of my constituents work at the Vauxhall Luton van factory, which makes the incredibly successful Vivaro, so this issue really matters to them and to me, and it matters for our industrial future. Will the Minister flesh out in a little more detail the plan to get more battery manufacturing capacity here in the United Kingdom? When will there be announcements? What number of battery plants does she believe the United Kingdom needs to have a successful car manufacturing industry?
Ms Ghani
I thank my hon. Friend for that incredibly sensible question. I have talked about all the programmes of work we have in place to attract gigafactories to the UK and to ensure that we are using the best technology that we can. We have the automotive transformation fund, which is building globally competitive electric vehicle supply chains, and I have spoken about the Faraday project, which will unlock a huge amount of research and development. We have Envision, too. We are working with and we constantly talk to other investors to help them come and establish gigafactories in the UK. We know how important it is to have supply chains to deal with the remarkable amount of cars being manufactured here.
My hon. Friend will be pleased to know that we also published in the integrated review an updated report on critical minerals to ensure that we are able to access to those minerals and are not relying on a particular nation, but can diversify. As I have said, I co-chair the Automotive Council, and that will provide a huge amount of assurance to his constituents that we are working hand in hand with the sector.
Darren Jones (Bristol North West) (Lab)
The story overnight came from written submissions to my Committee’s inquiry on the future of battery manufacturing in the UK. Stellantis will be here in Parliament next Tuesday to give further evidence. The Minister will know two things: that she and her departmental officials are in ongoing negotiations with other car manufacturers in the UK beyond Stellantis, and that all the car companies are raising exactly the same issues and are asking for a step up in activity from the Government and an end-to-end industrial strategy to show that the UK is serious about the future of UK production of electric vehicles. Will the Minister confirm for the record that those assertions—that the Department is in negotiations right now with other car manufacturing companies and that they are raising exactly the same issues as Stellantis—are indeed correct?
Ms Ghani
I am grateful to the Chair of the Select Committee for being here. I was once on his Committee. Overnight, I went through the transcript and some of the submissions to that inquiry, and I noticed the submission from Nissan. I know that nobody wants to pick out all the positive things that were said, but there was a great point on page 4:
“The UK has strong promise as an EV battery production location due to strong demand, a skilled workforce, and attractive manufacturing sites.”
We somehow seem to be forgetting all the positive things that are said in submissions by the automotive sector.
We are working with those in the sector, as I have said. I meet them regularly and was with them just this week to deal with a number of challenges, whether to do with the Inflation Reduction Act or gigafactories. I can, of course, confirm that we are working with industry to do everything we can to ensure that there is greater commitment to gigafactories here in the UK.
Holly Mumby-Croft (Scunthorpe) (Con)
Manufacturing and industry in this country are definitely an ecosystem, and when we start to lose chunks of it, that not only devastates communities but affects wider supply-chain businesses. The Minister will know that steel is crucial to car manufacturing. Can she reassure me and my constituents that she is considering those supply-chain businesses and doing everything she can to ensure that we have a level playing field in this country, not just for the steel industry but for manufacturing more widely?
Ms Ghani
My hon. Friend is once again the lady of steel, raising the topic on behalf of the whole industry across the UK. She will know about our recent work to look at procurement and the whole lifecycle of supply chains, and to ensure that we are doing everything we can in the UK. She knows about our commitment to the steel sector—we have provided billions of pounds-worth of support for energy costs, and now there is a huge amount of support for decarbonisation—and because of her work, steel will not be left out of any conversation when it comes to advanced manufacturing.
Ian Lavery (Wansbeck) (Lab)
Recharge Industries, the organisation that bought out Britishvolt, is committed to building a gigafactory on the Britishvolt site in Cambois in my constituency. However, there is a huge issue with Northumberland County Council relating to a buyback proposal on the land of the proposed gigafactory. Will the Minister please intervene to facilitate discussions between all parties to ensure that we are not let down again at the site in Cambois, and that Recharge Industries gets every support it needs from the Government to build that gigafactory and bring 9,000 jobs to the north-east?
Ms Ghani
We are pleased that Britishvolt has been successfully acquired. We know that investment supports high-quality jobs in industries of the future, and we are determined to ensure that the UK remains one of the best locations. We look forward to learning more about the Recharge Industries plans, and we continue to work closely with the local authority—it is not a Government decision—to ensure the best outcome for the site. Because I am so keen to ensure that we continue to have good news in this sector, I will commit to meeting the hon. Member this week so that he can ensure that the information I am getting from my officials is absolutely correct. If there is anything more I can do in relation to the local authority, I will do my best.
Rachel Hopkins (Luton South) (Lab)
I am very proud to have the Vauxhall van plant in my constituency. I was going to ask the Minister whether the Government accepted that setting ambitious targets, such as the zero emission vehicle mandate, without a plan, alongside the issues with the rules of origin, was simply reckless, but I want to impress upon her that what we are debating impacts on people’s lives and livelihoods. Will she accept an invitation to Luton South to visit the Vauxhall van plant and speak with workers there, and their representatives, to see how Government decisions impact on people’s lives?
Ms Ghani
We are very much aware of how this impacts on people’s lives. I can tell by the number of Members in the Chamber. I co-chair the Automotive Council, so I know how incredibly important it is that we are sensitive to the needs of the industry while delivering on our other ambitious targets, including net zero. For the meeting this week with the sector, I took a delegation over to the Department for Transport to explain a little further the challenges of the ZEV mandate. There is a huge commitment to delivering electric vehicles, but there are also challenges if we want to ensure that the UK automotive sector continues to be as competitive while delivering on our net zero ambitions. Of course, if the opportunity arises, I would be more than happy to visit the hon. Member’s manufacturing site when she is available. I will do my very best to try to make that happen.
Sarah Olney (Richmond Park) (LD)
In a written answer to me in November last year, the Minister said:
“The Government is committed to securing investment into the automotive sector, which will play an important role in levelling up across the UK and driving down emissions to net zero by 2050.”
In the light of that, today’s intervention by Stellantis is extremely worrying. If the Government cannot get an agreement to keep the current rules until 2027, what assessment have they made of the effect that the 10% tariff will have on the UK car manufacturing industry?
Ms Ghani
The hon. Member’s premise is wrong. I can list all the investments that have taken place in the sector, including £100 million from Stellantis in Ellesmere Port. That is taking place because there is confidence in the UK and in the supply chains. There has been a £380 million investment in Halewood. We have £1 billion of investment in the north-east hub between Nissan and Envision. That is all investment in the UK. Bentley announced £2.5 billion of investment in 2022 to produce its first battery-electric vehicles by 2026, securing 4,000 jobs at its Crewe plant. None of that was in the hon. Member’s script as she stood up.
We are aware of the rules of origin issue and it is raised with the Automotive Council, of which I am a co-chair. As I said earlier, the FCDO leads on this issue, but my Secretary of State is in constant contact to ensure that we get the best deal we can.
Mick Whitley (Birkenhead) (Lab)
Stellantis’ warning that it might be forced to close its UK factories will be greeted with dread by the large number of my constituents who work in the Vauxhall car plant in Ellesmere Port, where I myself was employed for many decades. The automotive sector now faces an existential threat as a result of the Government’s recklessness in setting such ambitious rules of origin targets, with no clear plan on how they would be delivered. With 800,000 jobs hanging in the balance, can the Minister confirm that the Government are prepared to sober up, get real, and work with the EU to revisit the rules of origin requirements in the trade and co-operation agreement?
Ms Ghani
Stellantis gave evidence to the Select Committee on a number of issues, and it seems peculiar that just one particular point has been raised, which has been in process for quite some time. The confidence that the hon. Member can give his constituents is that Stellantis has invested over £100 million in the UK—that is the confidence that employees have as well. A series of submissions were made to the Select Committee, and I am sure that the Chair, the hon. Member for Bristol North West (Darren Jones), will see a lot of activity on the website going forward. I read out the submission from Nissan expressing the confidence it has in the UK, as well as in us being able to deliver a huge amount of technological advancement in providing net zero vehicles. I ask the hon. Member for Birkenhead (Mick Whitley) to read the submission in full, not just the snapshot that was in the news.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
As the Minister will be aware, Sunderland is home to Nissan—it is in my constituency—and there are thankfully already shovels in the ground for the Envision AESC’s battery gigafactory, but we need more than one gigafactory. The sustainability of other UK manufacturing operations is at massive risk, as we have heard today, because the Government are incapable of seeing through any strategy. They knew this day was coming. When will the Government renegotiate the trade and co-operation agreement?
Ms Ghani
The hon. Member is absolutely right: there is a fantastic project with Nissan and Envision that will support 6,200 jobs in that supply chain, with more than 900 new Nissan jobs and 750 new jobs at the Envision gigafactory. By 2025, that site will see a projected 100,000 battery electric vehicles produced each year by Nissan; it is the first in the UK at that scale. All the other programmes of investment that I explained, whether that is the automotive transformation fund or the Faraday battery challenge, are what we are using to attract further investment in the UK, especially in gigafactories. That is exactly what we are working on—it is what I am working on as the co-chair of the Automotive Council.
Dame Nia Griffith (Llanelli) (Lab)
The transition to electric vehicles means not only new battery and engine factories, but significant investment in car component factories such as Gestamp in my constituency, which has developed lighter, tougher car body parts. Multinational companies such as Gestamp are currently making crucial decisions about where to site the production lines of the future, so with the US Inflation Reduction Act and the EU refining its response, what are the Government going to do to reduce energy costs both now and in the long term, to provide a coherent industrial vision and strategy, and real incentives for companies such as Gestamp to invest their new lines here in the UK?
Ms Ghani
Those are the exact conversations that we have been having for quite some time with manufacturers in the UK. Of course, IRA is not just a challenge for us, but a challenge internationally—the hon. Member has no doubt seen the response from Europe. We are also putting together a response collectively for all the manufacturers within the UK. It is important to note all the support we have given to energy-intensive industries, including the energy bill relief scheme, and now we have the supercharger coming down the line as well. Fundamentally, we also have the critical mineral refresh that is in the integrated review, which will provide further assurance that we can get hold of the basic goods—the critical minerals—that are needed to ensure that supply chains are reliable for manufacturers in the UK.
Matt Western (Warwick and Leamington) (Lab)
Never has an industrial strategy been more needed, and never have a Government been found more wanting. We have just 2.5 GW in production currently with Envision, and as the right hon. Member for Tunbridge Wells (Greg Clark) said, it needs activism, but I am afraid the signals just are not there. As Chancellor, the Prime Minister gave a keynote speech to the automotive industry last May. He spoke for just one minute and 46 seconds, and the delegates were left feeling disrespected by his lack of commitment. Unfortunately, this does affect international corporates that are looking to invest, and between the US with its IRA and the investments in Europe—in Germany, France and Spain—we are in serious danger of losing out. As such, will the Minister please convene a cross-party meeting with the Automotive Council to discuss what the plan is to address this real crisis?
Ms Ghani
If Madam Deputy Speaker allows, I will be more than happy to go over the allowed one minute in my response, but I do not want to lose favour with her. The constant requests for the strategy are peculiar because I can tell Members exactly what we are doing. The Chancellor identified five key growth sectors for the UK, which of course include advanced manufacturing, and the Government have announced £500 million per year for a package of support for 20,000 research and development-intensive businesses. We have 12 new investment zones and we are saving £1 billion yearly by cutting red tape that is burdensome for big employers.
But the point is this: there are a number of challenges around supply chains. We are looking at that issue with the Automotive Council, and also through the integrated review and the critical minerals refresh. There was a challenge internationally when it came to energy costs; we had the EBRS and now we have the supercharger. I am the co-chair of the Automotive Council. I am sure that, if the hon. Member for Warwick and Leamington (Matt Western) wanted to attend, he could write to the co-chair and ensure there could be time for him to be there as well. That work is done collaboratively with all the automotive CEOs, CFOs and leading managers across the UK. I do not determine who comes to that meeting and represents the automotive sector; that is for them to decide.
Kerry McCarthy (Bristol East) (Lab)
In the UK, we have the largest queue to connect to the grid of any country in Europe, which is affecting the car manufacturing industry, including when it sets up new plants. One manufacturer that wanted to put solar arrays on its plant was quoted 2031 for grid connection and a £9 million cost; another one was quoted 2037. That is clearly hindering our chances of securing a prosperous car industry in this country and attracting more investment. What conversations is the Minister having with her colleagues to ensure that grid connectivity is resolved?
Ms Ghani
I thank the hon. Member for that question, because it shows that we have to work across Whitehall. Access to the national grid is a major issue for any of the large manufacturers and of course, as their plans grow, they need to have greater access over a faster timetable than one would have previously thought National Grid would make available. Conversations are taking place, in particular with colleagues who were previously in the Department for Business, Energy and Industrial Strategy, who are now in the Department for Energy Security and Net Zero and are leading that relationship with National Grid. The issue comes up regularly in the meetings that we have with the manufacturing sector, and my priority is to support the advanced manufacturing sector, so the hon. Member can be assured that I am campaigning incredibly hard to make sure that all our advanced manufacturing sites—present or planned—get access to energy at a timetable that suits the business, not just National Grid.
Dave Doogan (Angus) (SNP)
It is deeply unimpressive for the Minister to come along today and talk about jam tomorrow—investments in future exotic technology and the investments that industry is making in that scenario—when what we actually need is conventional traction battery manufacturing capacity in the UK now. I am invested in this because of the supply chain in Scotland and because the United Kingdom has done everything it can to avoid any of the automotive foreign direct investment coming to Scotland. What will the Minister do to address the emergency of a lack of manufacturing capacity in traction batteries now, not different types of batteries in the future?
Ms Ghani
It is not about jam tomorrow: it is about money committed previously and money committed today. The transition to zero-emission vehicles is being supported by up to £1 billion for R&D and capital investments in strategically important parts of the electric vehicle supply chain, building on the £1.9 billion in spending review 2020. The Government have committed £620 million to support the transition to electric vehicles—that is committed today; it is not jam tomorrow. I ask the hon. Member to read all the submissions to the Select Committee, and to respond to the positive comments that have been made about why businesses continue to see the UK as a great place to manufacture cars.
Andrew Gwynne (Denton and Reddish) (Lab)
If levelling up is to be more than just a slogan, we desperately need an industrial strategy that matches historical skills to new job opportunities. I want to impress on the Minister that, in 2002, Oldham Batteries in Denton closed for the last time. It made car batteries for a long time. It had been a company since 1894, but those skills are still there in Tameside. How do we match up future job opportunities that the green transport revolution brings to those skills that still exist in areas such as Denton and Tameside?
Ms Ghani
I am grateful for the hon. Member’s point. There is no doubt a huge amount of skills in his constituency and it is absolutely right that he is coming here to represent them today. I have spoken about the Faraday battery challenge, which is about using new technology to ensure that we are producing the best batteries with the longest lifecycle. Forgive me; he is absolutely right: I should have mentioned the national electrification skills framework. That project is being continued by the Faraday battery challenge. It looks at the skills needed today, tomorrow and even further going down the line to ensure that these jobs and opportunities are spread across the UK. If he would allow, I am more than happy to write to him and to make sure, if it does not already, that that part of the Faraday challenge covers his region, too.
Ruth Cadbury (Brentford and Isleworth) (Lab)
As well as a viable automotive industry, the UK badly needs adequate road infrastructure to drive electric vehicles on. Do the Government recognise that demand for private and commercial electric vehicles is stalling in the UK because there is insufficient charging infrastructure, which makes buyers reluctant to make the move? Will the Minister raise that with Transport colleagues and commit to Labour’s policy of implementing mandated regional targets to ensure that all parts of the country get the charging infrastructure they so badly need?
Ms Ghani
As I mentioned earlier, I went with a delegation of car firms over to the Department for Transport, and I can see a Minister from that Department, my hon. Friend the Member for North West Durham (Mr Holden) on the Front Bench. As I mentioned, it included Bentley, BMW, Ford, Jaguar Land Rover—I have to read them all out; they will complain if I miss them off—McLaren, Nissan, Stellantis, Tesla, Toyota, Volkswagen and Aston Martin. I think that is everybody. Infrastructure is absolutely key, and we are doing everything we can to put pressure on the Department for Transport as it works with its stakeholders to make sure that the roll-out of charging points, including fast charging points, is kept up to speed to make sure that buying an electric vehicle is as attractive as it can be.
International Trade and Geopolitics
Nusrat Ghani Excerpts(1 year, 7 months ago)
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The Minister of State, Department for Business and Trade (Ms Nusrat Ghani)
I thank the hon. Member for Bristol North West (Darren Jones) for securing this important debate. I too was on the Select Committee with my hon. Friend the Member for North East Bedfordshire (Richard Fuller) and the right hon. Member for Hayes and Harlington, so this feels like a Tuesday morning love-in all over again.
To continue that love-in, I must say that many points that the Select Committee chair made were valid, although unfortunately others were somewhat completely off the mark. As always, I will defer to my hon. Friend the Member for North East Bedfordshire; we played a good tag team on the Select Committee, so it is fantastic to have him here in the Chamber. I thank all colleagues from across the House for their valuable contributions and I will do my very best to reference all of the very important questions that they raised.
Andy McDonald
I am grateful for the praise; I just want to point out that I am the Member of Parliament for Middlesbrough—my right hon. Friend the Member for Hayes and Harlington (John McDonnell) is a different guy altogether.
Ms Ghani
Goodness—I am no longer on the Christmas card list, so things are already going downhill. You have made it clear, Madam Deputy Speaker, that I do not have as much time to speak as I thought I had, so I will do my best to refer to all the contributions.
First, to the Chair of the Select Committee, you were such an optimist when I was on the Select Committee, but there has been nothing but negativity today. You touched on UK investment—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I think you meant “the hon. Gentleman”.
Ms Ghani
Forgive me, Madam Deputy Speaker.
We are one of the leading countries for start-up capital outside the United States. Most recently, we attracted £20 billion into technology, twice as much as France and Germany. The hon. Member for Bristol North West talked about our economy; the recent PwC report said that the UK is the fastest-growing G7 economy up to 2050, which means that our economic growth will outpace that of Germany, France and Italy combined. He talked about the OBR, which has revised its figures and is no longer forecasting our falling into a recession in 2023. I just wanted to ensure that he did not spend his weekend being utterly depressed, but instead looked at some of the stats out there that will perk him up.
I am grateful for the opportunity to respond to the debate, because it is important to understand the link between trade and geopolitics. As the hon. Gentleman mentioned, it is a fast-changing world out there and geopolitics is a challenge awaiting everyone, not just us here in the UK. It is only right that we ask ourselves what kind of country we want the UK to become. What part should we play in helping to shape the world of tomorrow? Should we be an outward-looking, truly global, free-trading nation that flies the flag for progress and stands up against the rise of authoritarianism and protectionism worldwide, or a country that battens down the hatches and shields itself from change?
I know what kind of nation the Prime Minister and I and the rest of this Government want the UK to be. We want to strengthen our country’s role as a global champion of freedom, democracy and the rule of law, driven by free trade and free enterprise. Considering the contributions we have heard, I think we all agree that trade is the most powerful force for progress we have at our disposal.
Only trade can create jobs, drive growth and deliver the long-term prosperity that communities across the UK and around the world need to flourish. Only trade has the power to lift millions more people out of poverty in developing nations, helping to build a more secure and prosperous future for us all. Only trade can drive forward co-operation in the battle against climate change, by building networks of green innovation worldwide.
Only trade can strengthen our critical supply chains, as discussed earlier, as we adapt to the energy security challenges unleashed by Putin’s barbaric illegal invasion of Ukraine. We have shown that by joining forces with our partners to cut the Kremlin’s oil revenues, removing tariffs on Ukrainian goods, signing a digital trade agreement with Kyiv and mobilising British businesses to play a leading role in rebuilding the Ukrainian economy—a task that we will drive forward with our partners when we host the second Ukrainian recovery conference in June.
The global challenges were covered in many speeches in this debate. That is why trade is forged at the heart of our economic security and defence policy as we adapt to the challenges of a competitive and multipolar world, just as we outlined in our refreshed integrated review, and why we are using our post-Brexit freedoms to position the United Kingdom at the centre of a network of free trade agreements that span the globe.
We are making it easier and cheaper for British firms in our constituencies, including smaller businesses, to trade and invest overseas by tackling tariffs and opening markets. We are helping them to unlock the fantastic potential of those deals through the work of our network of trained specialists, based here in the UK and worldwide, who provide the advice and guidance that firms need to do business overseas, from offering specialist market and sector intelligence to connecting British firms to export our investment opportunities on the ground, while flying the flag for the best of British business through the promotional work and other trade activities our teams are doing globally.
We have signed trade deals worth more than £850 billion with more than 70 nations so far, including some of the world’s most diverse and dynamic economies such as Japan and Australia. We are working at both state and federal level to strengthen our economic ties with the United States, our biggest bilateral trade partner, bringing down barriers to business through the memorandums of understanding we have agreed with North Carolina, South Carolina, Indiana and Oklahoma—the International Trade Minister, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), has just got off a flight from Oklahoma—with discussions ongoing with other states
We are also making progress in negotiating an FTA with India, although it is always about getting the right deal, not about rushing ahead. That FTA would boost our trade with the world’s biggest democracy by as much as £36 billion.
Let me shift to the Indo-Pacific, which was touched on by many Members, including my hon. Friend the Member for North East Bedfordshire. A key plank of our policy is to strengthen Britain’s trade ties with markets across the Indo-Pacific as the global economic centre of gravity shifts eastward. China’s increasing assertiveness in the region is set to become one of the most significant geopolitical and geo-economic shifts over the next decade, so our response will define our relationship with the world that is emerging.
The hon. Member for Bath (Wera Hobhouse) in particular mentioned China and Taiwan. In trade talks back in 2021, we agreed to deepen and broaden our trading relationship. In the last talks—held in Taiwan in November 2022, with the previous Trade Minister—the UK progressed market access ambitions in a range of sectors, including energy and offshore wind power, financial services, pharmaceuticals, agriculture, and, of course, food and drink. It gives me great pleasure to reassure the hon. Lady, the House and the good people of Taiwan that there is no change in the UK’s position, as stated at the G7 Foreign Ministers meeting a few days ago. I also note that President Macron has emphasised that position since making his initial comments. The UK remains resolutely against any unilateral change to the status quo, and we agree with our partners that Taiwan’s meaningful participation to international bodies should be possible. Of course, we are obviously aware of attempts to redefine the status quo, but we are fundamentally focused on ensuring that we de-escalate any tensions in the region.
There has been a lot of discussion about CPTPP, which is pivotal to the growth of our economy and will provide access to international markets for all the fantastic businesses in our constituencies. There has been so much doom and gloom in the debate, but it is worth remembering that we have access to markets in Europe and the CPTPP—the only country in the world to have that access. Our membership of the CPTPP was successfully secured by the Secretary of State just last month, and the deal is a game-changer for our country, placing the UK at the centre of a free trade zone of 500 million people, spanning Asia and the Americas, with a combined GDP of £9 trillion. We are the first European country to join the CPTPP, showing what we can achieve as an independent global trading nation. It also shows how we are valued internationally. There is a lot of doom and gloom about how the UK is branded and whether it is respected overseas, but I think this shows our value and what we have to offer.
CPTPP enables us to be a part of a major geopolitical scene. Of course, tilting towards the Indo-Pacific supports jobs and creates new export opportunities for businesses in every part of the United Kingdom. We have signed an additional agreement with Singapore, and a digital innovation partnership with 10 members of the Association of Southeast Asian Nations, strengthening our growing network of prosperity across the region. Those deals are underpinned by our expanding commitment to security in the Pacific, led by the AUKUS defence and security pact that we signed with the US and Australia last year. Without secure trade routes and supply chains, commerce cannot flourish and nations cannot prosper.
There has been a lot of conversation about supply chains. The war in Ukraine has starkly exposed the vulnerability of global supply chains over the past year —particularly energy security—so we are pulling out the stops to identify alternative sources for the critical goods that our economy needs to flourish while boosting our energy independence at home. The integrated review included the critical minerals refresh, which I was pleased to put together. Just this morning, the critical minerals taskforce—a collaboration with industry—met for the first time. I take this opportunity to recognise the work of Katherine Bennett, the taskforce chair. This shows how we are working not only with industry, but internationally, to ensure that UK manufacturers have access to the critical minerals and goods that they need in their supply chains.
As we move towards cleaner, more affordable sources for power, Britain is once again leading the charge and we have a head-start on our global competitors. More than 40% of our energy came from renewable sources last year, and we are ramping up our investment in the sector, directing record sums into new projects, research and innovation. We know that the US Inflation Reduction Act is a significant intervention in the global race for green energy, and we are not attempting to enter any kind of distortive subsidy race with our greatest ally—as my hon. Friend the Member for North East Bedfordshire said, we need to make sure that we always get good value for taxpayers’ money—but although that drive to net zero in the United States should be welcomed, it is, of course, incredibly disruptive. One cannot throw a stone into the water and not expect any ripples, and IRA is a massive stone that has caused ripples worldwide, particularly in Europe. It is incredibly important that we stick to our net zero ambitions and ensure that we have resilience in our supply chains.
We are trying to do everything that we can to ensure that businesses in the UK have a competitive advantage while leveraging billions more in private capital to drive growth—and not just in green energy. We want to grow our nuclear energy capacity, too, through the development of small modular reactors, while investing in our key growth industries—from advanced manufacturing to life sciences and artificial intelligence—forging a British economy that is fit to face the challenges of a fast-changing world. [Interruption.] I am being rushed along, so I will briefly respond to some of the points raised by hon. Members.
My hon. Friend the Member for North East Bedfordshire talked about the Office for Investment. We now have a joint Department—BEIS and DIT have become the Department for Business and Trade—with far more focus. An event in October will focus on global investment into the UK. We are focusing our resources and ensuring that we are reaching out.
The hon. Member for Bath spoke about CPTPP and Taiwan. It is not for us to talk about the accession of other countries, but is it not fantastic that we are at the table to ensure that our voices are heard?
There was also conversation about Liverpool and Mexico—[Interruption.] I am going as fast as I can, Madam Deputy Speaker. I am grateful to the hon. Member for Liverpool, Walton (Dan Carden) for his speech, which was positive about the work that we are doing in Mexico. He talked about the education strategy and the desire to promote exports, especially in education. I can confirm that we are most definitely doing that. If that work continues to be as positive as it is, I am sure that we would work with him to ensure that it is progressed.
The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) spoke about Kashmir. Those issues are fundamentally for the Foreign Office. These conversations often take place behind closed doors, but I do not doubt that her comments are on the record and will be reflected in other Departments, as necessary.
With a new chapter in global history being opened, we must have the courage to stand up for our convictions that only free trade and open markets hold the key to prosperity. It is clear that we are living in dangerous times. Autocracies are emboldened and behaving in a way that many of us have not seen in our lifetimes. The UK stands at the crossroads of the geopolitical stand-off between the international rules-based system as we know it and the system that autocratic leaders would like it to become. Trade and investment are at the very heart of that crossroads. Securing UK prosperity while protecting our way of life must be at the core of our trading strategy. We must work with our partners and allies to forge a freer, fairer future for the global economy, standing up to protectionism and economic coercion wherever we find it, delivering for people across the UK by growing British exports until we achieve our ambition of trading £1 trillion-worth of goods and services by 2030—we have a few years to go before we hit that target —and making our economy the undisputed top investment destination in Europe, so that millions of people across the UK and around the world can be set free to realise their economic potential and enjoy the benefits that only free, fair and sustainable trade and investment can bring.
I do not want to cause you any more upset, Madam Deputy Speaker, so I will finish by saying that I was at the Dispatch Box 30 days ago on the first day of Ramadan. Tonight we may see a full moon and tomorrow may be Eid, so I wish you and the House—especially the staff in the Tea Room—Eid Mubarak. I wish in particular for a full moon tonight so that I and my two brothers, Nasim and Rasalat, who are watching, can celebrate Eid tomorrow.
Investment Security Unit: Scrutiny
Nusrat Ghani Excerpts(1 year, 8 months ago)
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Darren Jones (Bristol North West) (Lab)
I rise today to give a statement on behalf of the Business, Energy and Industrial Strategy Committee in respect of our memorandum of understanding with the Government on scrutiny of the use of powers contained in the National Security and Investment Act 2021. I am grateful to the Backbench Business Committee for giving me the time to do so.
As the House knows, the National Security and Investment Act established a new statutory regime for Government scrutiny of, and intervention in, investments for the purposes of protecting national security. The Act applies to a wide range of sectors, which themselves are broadly defined, and—unlike in other countries—covers all transactions, not just those involving foreign investment. The investment security unit was then established within the Department for Business, Energy and Industrial Strategy to operationalise the Act. At that stage, the Secretary of State for Business, Energy and Industrial Strategy was the decision maker.
When the Bill was going through the House, the Government confirmed their preference that scrutiny of the use of these powers should be done by my Committee. There was a debate in this House and in the other place about whether a departmental Select Committee had sufficient processes, people and protections in place to scrutinise secret information, and right hon. Members from the Intelligence and Security Committee understandably argued that their Committee was best placed to do that work. However, the Government were not minded to accept amendments for a statutory regime of scrutiny in the Bill, nor to change their position on which Committee should have oversight of the regime. As such, Ministers committed to entering into a memorandum of understanding with my Committee to set out how information would be made available to allow us to do our work.
While negotiating that memorandum, my Committee established a new National Security and Investment Sub-Committee and appointed special advisers. We are also grateful to the House for providing us with national security subject specialist staff with relevant levels of security clearance. In addition, we undertook a short study visit to the United States to understand how congressional oversight of that country’s equivalent regime is conducted.
I am pleased to inform the House that the memorandum of understanding between the Government and my Committee has now been agreed, and that we have published it today in our report. I will not test the patience of the House by reading out the whole memorandum, but I will just make two points. First, it has been agreed that scrutiny will largely be done in private and, in so far as it relates to individual transactions, will be done retrospectively following any appeal or legal challenge. This was agreed to prevent actual or perceived political interference in quasi-judicial decision making, and means that we operate in line with our counterparts in the United States. Secondly, the bulk of our work will focus on the effect of the legislation on investment in the United Kingdom and the effectiveness of Government operations.
When the Committee decides that it wants to understand individual transactions in more detail, we will be able to request information from the Government via a private explanatory memorandum, which we will not publish. If the Committee wishes to see more sensitive information that is not contained in the explanatory memorandum, I as Chair of the Committee will be able to request access to such information, and will be briefed on equivalent to Privy Council terms or by notification under the Official Secrets Act. Lastly, while the recent machinery of Government changes have resulted in the investment security unit moving to the Cabinet Office and the decision maker now being the Chancellor of the Duchy of Lancaster, the Government have confirmed that they still intend for scrutiny of the Act to be undertaken by my Committee and, soon, its successor Committee on the basis set out in today’s report and the letter from the Minister received by other relevant Committees.
The Minister of State, Cabinet Office (Ms Nusrat Ghani)
I welcome this report, especially paragraph 11. We have always welcomed scrutiny of our decisions. As the hon. Member rightfully pointed out, the investment security unit has left the Department for Business, Innovation and Skills, but I am still responsible and we now sit in the Cabinet Office. Obviously, we want to support businesses to ensure that investment in the UK continues, while also protecting our national security.
I wondered whether the hon. Member could reflect on the fact that the NSI Act is a leading investment screening regime, and that we have good relationships with like-minded partners through which we share best practice and help other countries with similar regimes. Perhaps he could also comment on when I will be in front of him and his Select Committee, because we do not shy away from scrutiny. Finally, perhaps he would like to indulge the House and thank all of the investment security unit staff who worked with us on the unit and on securing this MOU.
Darren Jones
I thank the Minister for her question. Of course, for a long time, she was a member of my Committee. She pushed me quite hard to ensure that we got very effective scrutiny of this legislation, so I look forward to working with her collaboratively on the exchange of information as it relates to our interests as a Select Committee.
The Minister invites me to thank her officials, as well as my Clerks on the Select Committee, and I should do so. It took, I think, nearly 13 months to get to this point, sometimes with some frustration, but we got there. However, much of the work has been done and much of the detail has been agreed at length by our officials and Clerks, and we are very grateful to them for their contributions.
As for when the Minister will be summoned to my Select Committee, it is unusual that people are keen to come and be cross-examined by me and my colleagues on the Committee, but we look forward to welcoming her in due course.
Bus Manufacture in the UK
Nusrat Ghani Excerpts(2 years ago)
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The Minister for Science and Investment Security (Ms Nusrat Ghani)
I congratulate my right hon. Friend the Member for Selby and Ainsty (Nigel Adams) on securing tonight’s important debate and setting out clearly some of the challenges that UK bus manufacturers face. He knows that if I were on the Back Benches, this is exactly the sort of debate that I would have instigated, so I am actually pleased that he has raised this tonight. I give him an absolute assurance that this is not the end of the discussion; now that I am aware of this, it is only the start.
I share my right hon. Friend’s concerns that the procurement of these Chinese-made buses could adversely impact the UK bus manufacturing network and centre. In particular, I was concerned to hear my right hon. Friend say that some of these procurements that take place with China are not always the cheapest contracts, which is not great when it comes to making sure that we get good value for money. In particular, he mentioned that when councils are writing their specification tenders, UK manufacturers cannot bid as only the cheaper Chinese product fits their specification. I am sure that will be heard loud and clear in my Department and at the Department for Transport, and they will no doubt be writing in response.
It is true that, since 2019, Chinese companies have been enjoying huge volumes of exports around the world, with 98% of electric buses being found in China. I also share the concerns of my right hon. Friend the Member for Scarborough and Whitby (Sir Robert Goodwill), who chairs the bus and coach industry all-party parliamentary group, that we can allow one country to monopolise the market and that we should be doing everything we can to make sure that our supply chains are as clean and as transparent as they can be.
I will try my best to respond to all the points raised, but I will just run through what we are doing within the sector to help bus manufacturers. As my right hon. Friend mentioned, this sector is incredibly important for the Government’s green growth, making sure that we are levelling up across our country and driving emissions to net zero by 2050. In a previous life, I was the bus Minister, making sure that we were indeed supporting zero-emission buses.
My right hon. Friend mentioned how important the sector is to jobs. The sector employs 155,000 people—6.1% of total UK manufacturing employment—and a further 347 jobs are estimated to be supported by the industry in the wider economy. Within the framework, UK bus manufacturers are uniquely positioned, employing more than 3,000 people across England, Scotland and Northern Ireland. This is a sector that we need to protect.
My right hon. Friend the Member for Selby and Ainsty mentioned the prominent British companies, Alexander Dennis, Switch Mobility and Wrightbus, which employ more than 3,500 workers directly and 10,000 indirectly. These manufacturers also have the aptitude and capacity for completing the transition to fully electric bus fleets in the UK by the year 2030 without the need to import buses—that was a very important point to land.
As I am also joined by the Secretary of State for Northern Ireland, my right hon. Friend the Member for Daventry (Chris Heaton-Harris), it would be remiss of me not to mention his visit to Ballymena factory to pay tribute to the company’s net zero emission products and to affirm the Government’s support for hydrogen. I believe that he also declared the innovative technology fund, which provided £11.2 million for Wrightbus. It is incredibly important that we are doing everything we can to support UK manufacturers.
Ian Paisley
It was an honour to be at the Wrightbus plant with the Secretary of State. He was so enthusiastic. I think he actually said that he was really into buses—he is a wee bit nerdy about that. It was brilliant to see a person who really took a specific interest in the manufacturing process and in understanding how important it is in terms of jobs leading through to good green technology. Will the Minister take up the point that I made during the debate, which is about ringfencing the next phase of ZEBRA funding for hydrogen buses? If that happens, British manufacturing will be protected.
Ms Ghani
To quickly address the hydrogen point, I am not sure that ringfencing is the appropriate word for me to use at the Dispatch Box, but there is funding available for hydrogen buses; I believe the ZEBRA scheme is helping the West Midlands Combined Authority to deliver 124 hydrogen buses and refuelling infrastructure. As my hon. Friend is raising the profile of the business in his constituency, it is right that we do everything we can to ensure that the money is spent locally within the UK.
One point my right hon. Friend raised was why councils were shipping buses to the UK when they are not the cheapest option or carbon neutral. As he mentioned, the DFT’s latest ZEBRA scheme has been designed in line with the principles set out in the national bus strategy for England, placing partnership work between local transport authorities and bus operators at the heart of improving bus services.
That is why the DFT has asked for local transport authorities to submit proposals that have the support of bus operators, to ensure that they work together. Once funding has been awarded to local transport authorities, they will work with bus operators to implement the proposals, but ultimately decisions about the procurement of zero-emission buses will be made locally by local transport authorities or bus operators. DFT is not able to require bidders to design their procurement process in a way that would explicitly favour UK bus manufacturers.
Nigel Adams
On the point about not favouring particular manufacturers, is the Minister aware that in March, in its promotional material for announcing the new fund, DFT used a sparkly new electric bus as part of that marketing? The marketing geniuses in the DFT may or may not have been aware that it was a Chinese Yutong bus that was used to promote the scheme, but the idea that we are promoting Chinese buses is slightly alarming—I am turning to the box where the Minister’s officials sit, but I am sure it is not the young lady there who was responsible. Only when UK manufacturers complained was the photograph changed to a British Alexander Dennis bus.
Ms Ghani
First of all, it is not a DFT official in the box, but a Department for Business, Energy and Industrial Strategy official. Secondly, as my right hon. Friend knows, I would have kept an eye out to make sure it was not a Chinese bus, but most definitely a UK bus, and I will do so in future.
The answer I am giving is not exactly what my right hon. Friend wants to hear, but I want to repeat the issue he raised: when the procurements are put together, if they deliberately exclude UK manufacturers, that is something that needs to be looked at. Now that it has been raised in this debate, I will ensure that both BEIS and DFT officials respond in writing to ensure that that point is covered.
To quickly cover why China has the largest electric vehicle battery industry in the world, because that is important for resilience and ensuring that we support UK manufacturing, we know that China has 98% of the market. We know that we must be resilient, and that is why we have a number of programmes in place, especially the Advanced Propulsion Centre, the Faraday Battery Challenge and Driving the Electric Revolution.
For example, the Advanced Propulsion Centre provides £11.2 million for the development and manufacture of low-cost hydrogen fuel cell bus technology and the hydrogen centre of excellence with Wrightbus in Ballymena, as mentioned earlier, to further the development of hydrogen technology and drive product sales across the world. We need to be doing more of that kind of work with Members of Parliament, raising the profile of what can be done locally.
We have talked about the grants available through the Advanced Propulsion Centre, but we also have the ESTHER project, which includes the provision of £9.1 million within the £22 million ESTHER project to develop hydrogen fuel cells—again, that was mentioned earlier. Then there is the consortium led by Intelligent Energy, which includes bus maker Alexander Dennis Ltd. Funding has also been provided to ensure that the ESTHER consortium develops and integrates valuable technology delivery skills, and creates supply chain advantages for the UK, so that it can capitalise on this technology and unlock additional research and development funding from UK suppliers.
A lot of work has been taking place on localised supply of key components to meet the growing demand for electric vehicles, but we need to make sure that local companies have the opportunity to bid for tenders. I should mention the net zero strategy produced in October 2021, and the Government’s promise of £350 million over the next three years to deliver the automotive transformation fund.
I keep talking about the funding available, but that may not exactly address the points that my right hon. Friend the Member for Selby and Ainsty raised. To conclude, the issue has been brought to our attention, and I will do my very best to ensure that DFT and BEIS respond fully. My right hon. Friend is aware that if I were on the Back Benches, I most definitely would have raised this issue, even if—especially if—he was on the Front Bench; I would have given him quite a tough time.
I assure hon. Members that this is not the end but the start of a conversation. We need far more transparency, especially regarding those councils that seem to be giving the majority of their contracts to one particular country or place overseas; that is not good news for us here. We recognise the challenges that we face. We need to help our local authorities to procure buses from the UK. Of course, the supply chain for zero-emission buses will always be global, but we want to make sure that UK bus manufacturing remains strong, and this obviously involves the key components. I will end there. I am keen to meet my right hon. Friend as soon as possible to make sure that everything discussed today is put in writing.
Question put and agreed to.