Automotive Industry

Rachel Hopkins Excerpts

Wednesday 12th July 2023 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

It is an absolute pleasure to follow my hon. Friend the Member for Luton North (Sarah Owen), a good friend who spoke so passionately about the length of time Luton has been associated with Vauxhall Motors—I appreciate the Minister nodding at that. As we have heard, the automotive industry is critical to the UK’s economy; it is a jewel in the crown of British manufacturing. I agree with the comments made by our Front Benchers about the importance of maintaining a good manufacturing sector in our country and the associated good, skilled jobs.

In Luton, we are proud of our automotive heritage. For once, let me carry on a football analogy by saying that we are also proud of our premier league football team. Generations of families have worked at the Vauxhall plant, making many well-known family cars and, more recently, medium-sized vans, based on the Vauxhall Vivaro. I have seen the heritage displayed in all sorts of ways. When I visited Someries Junior School recently, it had the full history of Vauxhall set out in a montage, where the cars had been drawn on and the history from 1905 was talked about. Similarly, when I have been out talking to the people of Mid Bedfordshire, I knocked on the door of someone who works at Vauxhall and is the daughter of one of the Unite representatives.

I was pleased to meet the Minister recently to talk about the importance of the automotive sector to Luton and the need for a long-term strategy to safeguard the industry and good jobs in our town. Having joined this place in 2019, I first raised the issue of the need for a strategy specifically to support the automotive industry some three years ago, in July 2020. The Minister has seen me raise many an automotive issue. If the hon. Member for Bosworth (Dr Evans) was here, I could assure him of how many times I have raised the issues of semiconductors, electric vehicle batteries, gigafactories, the supply chain, rules of origin and charging infrastructure. There is a genuine interest here about the importance of all of it to our economy.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I am hesitant to interrupt, because I know of my hon. Friend’s expertise in this area. However, may I ask her: are the Government giving enough help for the future of our industry? Many believe that hydrogen power is coming fast, and that its impact might be similar to what the invention of the railways meant for the canals. Are the Government giving enough hope and resources to the industry to look forward to hydrogen power as well as battery power?

[Rachel Hopkins]

I thank my hon. Friend for that intervention. Obviously, the Opposition are hosting this debate to get support for the automotive sector, and his question about whether the Government are giving sufficient support to hydrogen is perhaps one for them. I want to make sure that I have my points on the record about the future of electric vehicles at the Vauxhall plant.

Three years on, I am still calling for that long-term plan from the Government. Despite the Minister reciting many a meeting, visit and champion of X, Y and Z, where is the plan that we can all look up to and see how it is going to support our sector? We have seen this Conservative Government preside over a 37% fall in British motor manufacturing since they came into office in 2010. Indeed, eight out of 10 cars produced in the UK are exported, yet exports of cars manufactured in the UK fell by 14% in 2022. Government inaction, which we are debating today, threatens the future of the automotive industry and of Vauxhall in Luton, particularly the future of its electric vehicles.

The UK is heavily reliant on battery technology from Asia. While the UK currently falls under the threshold of rules of origin quotas, the ratcheting up from the beginning of next year poses a risk to the UK automotive industry. As we have heard, Stellantis, the owner of Vauxhall, told the Business and Trade Committee inquiry into the supply of batteries for EV manufacturing in the UK:

“There will not be sufficient battery production supplies in the UK or in Europe by 2025 and 2030”

to meet the rules of origin requirements.

Rather than working with the EU to suspend a ratcheting up in rules of origin requirements until 2027, I am concerned that we will see too little, too late from the Government, and the Conservatives will oversee the imposition of 10% tariffs from 1 January next year. Just for nuance, those tariffs are 10% to 22% for electric vans, which particularly impacts the Vauxhall plant in Luton South.

Overall, these tariffs would hinder the UK’s struggling automotive sector, pass on yet more cost to British people, already struggling with a cost of living crisis made in Downing Street, and would make the green transition unnecessarily unaffordable for millions across the country.

Until we have sufficient domestic battery production, our industry will be at a major competitive disadvantage, in particular against Asian imports, specifically from South Korea, Japan and China. The reality is that if the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, the future of domestic operations will be at risk. Decisions will be made by producers to move production elsewhere, if there is no confidence in the UK Government’s desire to facilitate a sustainable automotive and electric vehicle market, a point well made by my hon. Friend the Member for Llanelli (Dame Nia Griffith), particularly as British businesses are also facing the highest energy costs in Europe.

It is also important that the Government recognise the innovation and technological advancements posed by the wider industry. Since joining the all-party motor group, I have learned a lot about how motorsport in the UK—the best in the world, with the greatest engineering and tech teams—influences the ordinary automotive sector. For many years, we have seen a cycle where cutting-edge motorsport develops innovative automotive solutions and efficiencies that the automotive sector later adopts for the wider market.

We have heard about steps being taken on sustainable fuels, but much more has been linked to the huge strides in technology relating to software. It is right to remember how the motorsport industry pivoted brilliantly during the pandemic to support the ventilator challenge. I raise this because if the Government sit back and allow the demise of our automotive industry, we will risk losing the world-class engineers, tech experts and motorsport companies, as they will look elsewhere for an environment that is more conducive to the sport. That would be detrimental, not only to the entertainment side of motorsport, but as a significant contributor to our economy and society.

As we have heard, Labour has an excellent plan to turbocharge electric vehicle manufacturing. In government, we will prioritise an agreement with the European Union to ensure that manufacturers have time to prepare to meet rules of origin requirements. We are committed to rapidly scaling up UK battery making capacity, by part-financing eight additional gigafactories, creating 80,000 jobs, powering 2 million electric vehicles and adding £30 billion to the UK economy.

Labour will accelerate the roll-out of charging points and give confidence to motorists to make the switch, with binding targets for electric vehicle chargers. Our plan includes measures to make the UK a clean energy superpower by 2030, with net zero carbon electricity, lowering electricity costs for the UK car industry. I look forward to supporting Labour’s business team to make this a reality, so that the young people in Luton South see a positive future ahead of them, with good, skilled jobs for the long term.

--- Later in debate ---

[Matt Western (Warwick and Leamington) (Lab)]

It is an honour to follow the excellent speech of my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders). As someone who is passionate about this industry, I would say that there is huge support for talking up the sector on the Opposition side of the Chamber, as we have heard in the contributions of colleagues over the last couple of hours.

When I think of the sector’s contribution to UK plc, I think about the alloy wheels being made in Fort William, the Ferodo brakes being made in Chapel-en-le-Frith and the panels being beaten out in various parts of the country. I think about the likes of the factory just around the corner from where I live that makes the gearbox for the Bugatti Veyron, no less. Up and down this country we have some of the finest companies and the finest engineers making products, contributing to the supply chain and to the original equipment manufacturers that produce vehicles of all sorts, from motorbikes to diggers.

I also pay tribute to a great old friend of mine who we all remember, Jack Dromey, who called this automotive industry the “jewel in the crown” of UK manufacturing. That is something I have always believed, and indeed I spent a great deal of my life working in it.

On the point about the few contributions made about the sector in this place, back in May 2018 I held a parliamentary debate on the subject, and I was disappointed by the number of contributions from certain quarters. Five years ago, I talked about the challenges that the industry faced, and the points I made then are hardly different from some of the points that the Society of Motor Manufacturers and Traders has highlighted in its five-point plan.

The real fear across the industry is that the Government are not acknowledging the importance of the sector, and certainly have not over recent years. Until a few years ago, the right hon. Member for Tunbridge Wells (Greg Clark) had an industrial strategy, which was recognised by the industry, but that has, of course, fallen by the wayside. Indeed, I attended the SMMT international conference a year ago. A collection of industry heads from around the world, as well as UK bosses from right across the sector, were assembled for a full day’s conference. The keynote speech was given by the Prime Minister, who was then Chancellor. Sadly, it lasted a minute and 40 seconds.

I will not put words into the mouths of others, but the reality is that, that day, the industry felt utterly disrespected by this place. The Government are the Government, but the industry thought, “Well, what does Parliament really think about the contribution we are making to the UK economy?” Such a short keynote speech was felt, by Japanese or European colleagues who came over here to listen to the UK Chancellor, to devalue the industry’s work, as well as its investment. Unfortunately, those signals are very badly read in boardrooms across the world because, of course, the UK industry is made up of companies that are headquartered in Japan, Paris, Munich or wherever, and they listen carefully to the messages coming out of this place. That is important.

To give credit where it is due, Margaret Thatcher actually recognised the importance of the UK industry by bailing out British Leyland back in the day, which saved brands such as Jaguar Land Rover and Mini, as well by attracting inward investment from the likes of Honda, Toyota and Nissan. Sadly, we have lost investment from Honda, Ford and others in the past few years. That is why we are at a challenging point for the industry’s future.

We are blessed to have some great companies here, including Jaguar Land Rover, Stellantis, as we have heard, and BMW Mini. Then, of course, we have luxury and performance manufacturers such as Rolls-Royce, Bentley, McLaren, Aston Martin—just down the road from me—and all the other myriad specialist companies, including Lotus, Caterham, Morgan and so on. The sector is even wider if we include the likes of Norton, Triumph—about which we have heard—JCB and Caterpillar, as well the bus and coach manufacturers that have a presence here and in Northern Ireland, such as Wrightbus, which are doing some superb product development and addressing the need to get to net zero.

The sector is so valuable. It can contribute £67 billion in turnover and £14 billion in added value to the UK economy, and it typically invests £3 billion a year in research and development. However, the industry has been so reliant on fossil fuels that the transition to net zero is a critical point in its history. I will outline some of the issues, one of which is the political stability—or the lack of it—to revive and attract the business investment that we need. Of course, I welcome this morning’s announcement by Renault-Geely, but we are really behind the curve. I will also pick up on a few challenges such as the ZEV mandate and the new trading relationship with Europe, including, of course, the rules of origin issue, which is so critical. I will then touch on energy and the other import costs that are a real drag on investment in the UK, as well as the need for an EV and hydrogen infrastructure mandate if we are to get the sector going.

The transition needs a clear industrial strategy; it needs to become a political priority. Sadly, the words “industrial strategy” have not really been part of the Government’s vernacular over the past few years, as we have heard. Make UK said that, under this Government, we have had a decade of “flip-flopping” on industrial strategy. Do they back business or not? Boris Johnson clearly did not, going by his immortal words. Of course, we had the kamikaze Budget of last autumn. That is all damaging to the way in which the global industry perceives the UK. This is not talking down the UK; it is the reality of the messages coming out of this place. Businesses want security and stability before they invest for, say, 30 or 40 years. Think about the Toyota plant at Burnaston, which has just celebrated its 30th year—that is a fantastic achievement. Nissan, of course, is that bit older, but those are really prized assets that we have.

Turning to net zero and the Government’s ambitions with electric vehicles, we need to press on that issue and ramp up battery manufacture. As we have heard, we are way behind compared with other countries, but we also need to support wider adoption of vehicles. The plans we have—offering interest-free loans and potentially trialling a national scrappage scheme—are important. However, as I said, the charging point network for EV is way behind schedule. My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) made the point that more EV charging points are being installed in Westminster than in the north of the country. That is quite a sobering statistic, and where we do have those few chargers, they are all too often poorly maintained. There needs to be a mandate to ensure that that infrastructure is delivered, not just for EV but for hydrogen hubs. We have made something like a tenth of the investment in hydrogen hubs that Germany has, which of course will be aimed at future heavy goods vehicles and other mass transport systems. Until recently, we had 12 hubs; that number has now fallen to six, I think, so we are going backwards when it comes to hydrogen hubs.

We have talked about battery production, and heard the passionate speech from my hon. Friend the Member for Wansbeck (Ian Lavery). As someone who went to his constituency 40 years ago, I know how important that gigafactory would be for his constituents, and I would love to see that happen. The technologies are moving on rapidly: we can look at the work being done by Warwick Manufacturing Group, which is leading the development of battery technology, or by UKBIC, which is the industrialisation centre just outside Coventry. The UK absolutely could be at the forefront of that work, but we need the investments to make it happen, and as demonstrated by Britishvolt, that has just not been happening. There are some questions about what is happening with Recharge Industries as well.

I touched on hydrogen; Members have also made points about sustainable fuels, and there is something to be said about what could be done in that sector. The motorsport industry is doing a huge amount of work exploring those technologies, and again, we are very much at the forefront of what can be done in that space—how existing internal combustion engines could be used with that kind of fuel to bring them close to net zero. That innovation is so important, whether it be through motorsport or our higher education institutions. We heard about HORIBA MIRA from the hon. Member for Bosworth (Dr Evans) and we have motorsport valley down the M40, but the Advanced Propulsion Centre at Warwick is also doing some fascinating work, supporting new companies with emerging technologies to make them commercially viable.

As the Government will know, there are some real concerns about the ZEV mandate, certainly about the tradeable element and what it will mean if manufacturers miss their targets, as well as what those targets will be after 2030. Then, of course, we have the rules of origin, which—as we have heard from colleagues, particularly “the Stellantis three”—are a real and critical hit to the sector. I am not sure whether I am a Stellantis fourth in disguise.

[Rachel Hopkins]

In spirit.

[Matt Western]

Maybe in spirit, yes—that is exactly what it is. Those tariffs will be real tariffs, going both ways, but they will particularly impact on battery electric vehicles. That is why Labour would prioritise an agreement with the EU, because we have to deliver a modern border and customs framework that will facilitate smooth and cost-effective trade.

I will make a couple of other points. We need the skills to make this all happen, both in the network of our dealers and in our factories and our manufacturing sector, but we also need clean energy. We have such a cost disadvantage in this country compared with France and a lot of Europe, but particularly when compared with Spain, where energy costs something like a tenth of what it does here. That is why Labour will launch an urgent mission for a fossil fuel-free electricity system by 2030, because we have to reduce the cost to businesses and to EV drivers as well. When we see the work that President Biden is doing through the IRA, we realise just how much can be done with a vision, and that is what I think is frustrating so many want-to-be investors in this country.

In closing, I come back to the speech of my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), which I thought was a clinical dissection of the challenges facing the sector. This is a really important sector—from e-mobility to motorbikes and diggers—for the value it provides not just in the abstract to UK plc, but as I cited in my opening remarks, to communities and constituencies up and down the country. When I speak to businesses in the sector, which is virtually every week and certainly every fortnight, they impress upon me the desperate need for some clarity because they want to make long-term decisions. These are companies such as JLR, Stellantis, Toyota, Nissan, BMW, Mini and others, and decisions have been made by boards elsewhere around the world. That is why, with colleagues, I will always talk up this industry. It is an industry that I think is so important to our future, and an industry at the point of transition. However, we will be honest about the challenges. We must champion the prospects and what this country can provide to them, because we want the investment, and the industry wants us to provide regulatory, political and economic stability.