UK Automotive Industry: Job Losses

Richard Burden Excerpts

Tuesday 22nd May 2018 Westminster Hall

[Richard Burden (Birmingham, Northfield) (Lab)]

I start by declaring an interest; I chair the all-party parliamentary motor group, which receives support from the Society of Motor Manufacturers and Traders, the Motorsport Industry Association and the RAC Foundation. I congratulate my hon. Friend the Member for Warwick and Leamington (Matt Western) on his comprehensive tour of the challenges facing the UK’s automotive industry and his explanation of how this industry literally drives economic growth in this country.

In the short time I have available, I will focus on two areas, both of which my hon. Friend covered: first, the challenges of Brexit, and secondly the transition away from petrol and diesel production. As he said, when we have over 1,000 trucks coming in across the channel every day, delivering £35 million worth of parts to build 6,600 cars and 9,800 engines every single day, most of which then go back to the European Union by similar means, achieving frictionless trade post Brexit is vital to this industry. I simply do not see a way of doing that except by continued membership of a customs union.

My hon. Friend also mentioned regulatory alignment. Keeping the Vehicle Certification Agency’s ability to certify cars as safe for sale throughout the EU is key to the industry in this country. I ask the Minister what negotiations are going on to ensure that that is the case, and how he feels that could be achieved except through as close as possible a relationship with the single market.

On skills, a key part of the integration of the industry internationally, particularly across Europe, is the ability to transfer skills from one country to another. Frankly, the UK’s visa requirements all too often get in the way of that, but the integration is at its closest with our European partners. I ask the Minister what negotiations are going on to ensure that, post Brexit, it will still be possible to transfer those skills between the UK automotive industry and partners on the other side of the channel.

Very briefly, in relation to the transition away from petrol and diesel, there are three challenges: anxiety over the range of electric vehicles, price and infrastructure. I hope that the Automated and Electric Vehicles Bill will help to improve infrastructure, but I must say to the Minister that more needs to be done to ensure and to mandate interoperability of charge points. It makes no more sense to have differences on that than to have different domestic plugs depending on whether someone has a Dyson or a Hoover vacuum cleaner. What is being done to ensure that we can achieve on-street charging? In particular, what negotiations and what work are being undertaken to try to enable wireless charging? What are the Government doing to ensure that there is infrastructure in place not just for conventional electric vehicles, but for hydrogen-powered vehicles in the future?

My last point is on the transition. As my hon. Friend said, there is something wrong when the cleanest diesels are being hit the hardest. Of course, the UK’s air quality crisis means there must be a trend away from petrol and diesel in the future, but the real challenge is to get the oldest and most polluting diesels off our roads, and we will not do that by hitting the cleanest ones. What are the Government’s ideas for getting those older, more polluting diesels off the road? At the moment, the signals being sent out by Government are confused.

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[Richard Burden]

Consumer incentives will have to be part of the package that we hope will incentivise the shift towards zero emissions. The Government have scaled back both the plug-in car grant and the grant available for the home charging of electric vehicles. Does that not send out a confused signal, if we are trying to encourage people to make that shift?

[Richard Harrington]

One of the issues is not reducing the amount of grants, but where the grants should go, which I am happy to discuss separately with the hon. Gentleman, as I need to make progress due to lack of time. There are questions: for example, should hybrid cars receive the same grant as all electric cars? I would be delighted to meet him to talk this through, formally or informally.

I want to stress the importance that the automotive industry has to us with regard to the future. My hon. Friend the Member for Chichester (Gillian Keegan), while stressing frictionless trade, mentioned Rolls-Royce in her constituency and how it might appear as a small blob on a map compared to vast production, but it is critically important to the country and the local economy. I would be happy to accept her kind invitation to visit with her.

Investment generally in the UK auto industry is important to us. The industrial strategy and landmark automotive sector deal show how the Government can work with industry at the forefront of new technologies, to ensure that we remain the destination of choice for future investment decisions. There was good news, which hon. Members have mentioned, about the Luton plant with the Vivaro vans. Toyota announced that it will build the next generation Auris in Derbyshire. Those decisions are not to be sneered at, but are important. While I accept that decisions are made over a long period, I think that 10-year decisions for any significant investments are also important, but they can be pulled. Like any decisions, a company can decide to do that at the last minute for whatever reason it wants—for example, if it is short of money or if there is uncertainty in the market or points are raised about Brexit. Although they are long-term decisions, they are not decisions until they are finally made. BMW’s investment in the electric Mini and Nissan’s investment in Sunderland mean that since 2016, this country has won every single competitive model allocation decision by major car manufacturers. That does not mean we can take it for granted.

I would like to speak for an hour on the EU exit issue. I cannot, however, due to your quite rightly ruthless chairing, Mr Bone. The Government have reached an agreement on the terms of the implementation period, but we have to plan for all scenarios. I have a lot of confidence that we will leave with a deal and that a no-deal scenario in March 2019, which I think would be disastrous for the automotive industry—I am happy for that to be on record and will defend it to anybody—is significantly less likely. I hope that it is totally unlikely. I hope that it does not happen and I believe that it will not happen. There needs to be a competitive market as part of a European-wide industry. It has been a huge success. It was Mrs Thatcher who persuaded many of the Japanese firms to invest here, because of the market that they would be involved in. Whatever hon. Members’ different views about Mrs Thatcher are, I think that they will all agree that that has been a good thing for the country.

Our vision for the UK is clear. We are seeking a comprehensive solution, which includes most of the things that the industry wants, such as vehicle standards, one series of approvals and simple, frictionless movement for parts and labour, where it is required in the industry. We are pleased that the Government are producing a White Paper, which will set out in detail the UK’s position on a future relationship. I think that it will be significant and show the exact terms of the relationship we are seeking with the EU and our preferred option for the future customs relationship, providing detail on precisely these issues, such as tariffs, rules of origin and mutual recognition, which are important to the industry.

I am happy to take up this discussion afterwards. I am meeting the hon. Member for Ellesmere Port and Neston (Justin Madders) and others later today, and I am happy to meet any hon. Member to talk in more detail about this complex issue. In conclusion, hon. Members should know how strong the automotive sector is for us. We are a strong manufacturing nation. I believe that we will be a lot stronger. I thank everyone for their attention today.