UK Automotive Industry

Rachel Hopkins Excerpts

Monday 18th September 2023 Commons Chamber

[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?

--- Later in debate ---

[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