UK Automotive Industry

Sarah Jones Excerpts

Monday 18th September 2023 Commons Chamber

[Sarah Jones (Croydon Central) (Lab)]

It is a pleasure to take part in a debate on a sector whose past, present and future lie at the heart of British manufacturing. I know that many of my colleagues and their constituents will understand the vital importance of this issue; I also know that several colleagues sadly cannot be here today because they are attending a conference on the industry at the Queen Elizabeth II Centre.

I am new to this brief, so, as Members would expect, I have been speaking to people in the industry—including representatives of the Society of Motor Manufacturers and Traders, who do an excellent job—and I have to say that their picture of the reality is somewhat different from the Minister’s. The Minister says that all is well in the world, everything is booming and everything is great. She has big numbers, and she speaks with great confidence and enthusiasm about a sector which, of course, we all cherish and want to build. The sector, however, is absolutely of one voice in crying out for certainty, clarity and a plan of action, as it has been doing for years. It provides hundreds of thousands of highly skilled jobs across the country, it brings pride to communities by putting them at the forefront of a world-leading sector, and its iconic British brands showcase the best of British innovation and craftsmanship on a global stage. It should, and could, be booming, but for the past 13 years we have had kid racers at the wheel. Industry is desperate for a plan, and I have heard that loud and clear. Motorists are crying out for direction, and jobs are at risk of being shipped overseas.

[Mrs Paulette Hamilton (Birmingham, Erdington) (Lab)]

In communities such mine in Erdington, Kingstanding and Castle Vale, the automotive industry is our lifeblood, and it is no wonder that families are seriously worried about job decline. Does my hon. Friend agree that we need to prioritise not only job creation but upskilling, so that jobs can be created and sustained locally?

[Sarah Jones]

My hon. Friend is doing an excellent job on behalf of her constituents, as, of course, did her predecessor, in standing up for the sector in many debates in this place.

The Tories risk putting British motor manufacturers under the bus. According to analysis that I have seen, under the Conservatives we have lost more than a third of automotive manufacturing output since 2010, so it is little wonder that the UK is slipping down the international league tables when it comes to automotive manufacturing relative to GDP. It is said that people never remember the runner-up, but they certainly do not remember the one in 17th place. However, we know that the problem is not unique to the automotive industry; we know that the lack of a Government plan that people can understand, rely on and invest in is a problem across many sectors. When I was reading about this brief, I came across a reference to the former special adviser to the Secretary of State for Business and Trade, who said recently that the Government

“does not know, nor really care”

about business issues. This is someone who has worked at the heart of Government, seeing the decision making, seeing Ministers and seeing what happens.

Listening to the speech made earlier today by the right hon. Member for South West Norfolk (Elizabeth Truss)—the Minister may well have heard it—was a timely reminder of the Conservatives’ relentless economic incompetence. Last year they crashed the economy, and this year they are on track to gift British manufacturers the entirely avoidable introduction of 10% tariffs. Rather than co-operating with the EU to suspend a ratcheting up of rules of origin requirements until 2027, British and European manufacturers are facing a cliff edge of higher export costs from 1 January. An agreement with Europe would be a win-win for everyone. JLR, Stellantis and Vauxhall have all warned that failure to act will see jobs shipped overseas. When will the Conservatives heed Labour’s calls for them to deal with this issue as a priority?

The Minister talked about some of the bright spots amid the clouds, and of course there are some. We were pleased to see the Government adopt Labour’s approach of using public investment to leverage in much more private investment to prevent the relocation of an iconic British institution to China. The loss of the BMW Mini production plant in Oxford would have been an historic loss for the automotive industry in Britain. Labour will always welcome investment in Britain—we have not had enough of it under this Government—but we need a proper industrial strategy, giving certainty that investments of this kind can support British jobs and industry for the long term. Instead, industry faces that 1 January cliff edge on rules of origin, and another on the zero-emission vehicle mandate; the Department for Transport has still not clarified how that will be implemented.

Industry is facing Government Back Benchers who are miring the UK’s commitment to electric vehicles in uncertainty by talking from the Back Benches about how we should scrap these targets. That is adding to the uncertainty that the industry feels. If Japan or the USA were considering investing in the UK and they heard what the former Prime Minister, the right hon. Member for South West Norfolk, said today about delaying our net zero commitments and what Back Benchers have said about getting rid of some of these targets, it would be hard for them to invest, given that backdrop. The Government need to get a grip and make a decision on which way they are going. Are they fixed on those dates and on giving industry the certainty it needs, or are they going to carry on heeding the calls from their Back Benches for delay?

The Government’s industrial neglect has weakened Britain’s international competitiveness to the extent that Tata was close to building its new gigafactory in Spain. The Government might congratulate themselves on their deal making, but in truth they have only narrowly avoided driving the country headfirst into a disaster. Without batteries being made here in the UK, it is unlikely that there will be a long-term future for automotive production in this country at all. Despite what the Minister says, Britain remains far behind where we need to be and far behind many of our international competitors. If Tata’s factory makes it into operation, the UK will have 66 GW of capacity by 2030. At that point, Germany will have over 300 GW, Hungary over 200 GW and China over 6,000 GW. The Minister said that she was working on the production of a strategy on this. I urge her to speed up. Working on the production of something does not give industry the certainty that it is desperately calling for.

The reality is that this Tory Government are asleep at the wheel and taking the future of the automotive industry along for the ride. They have no plan. They are lurching from crisis to crisis, unable to provide industry with the long-term view it desperately needs. They need to listen to Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, who has implored that

“we just need a plan…and we need it urgently”.

He is right, but we do not just need a plan; we need Labour’s plan to turbocharge electric vehicle manufacturing and put the UK’s automotive industry back in the fast lane. With Labour’s industrial strategy, industry leaders would not have to beg Ministers for action. First, in the face of impending tariffs, Labour would prioritise reaching an agreement with the European Union to ensure that manufacturers had time to prepare to meet the rules of origin requirements. We know the Tories love to talk about Brexit, but Labour would make it work.

Secondly, a Labour Government would end the era of sticking-plaster solutions in the automotive sector. While the Conservatives scramble around for last-minute deals, the next Labour Government would make the long-term investments that industry and workers are crying out for. That is why we would rapidly scale up battery-making capacity by part-funding gigafactories through our green prosperity plan and end this country’s reliance on imported batteries. Our plan would create 80,000 jobs, power 2 million electric vehicles and add £30 billion to the UK’s economy. What is more, three quarters of the economic benefit from that strategy would be felt in the midlands and the north. The Conservatives talk about levelling up; Labour would deliver it.

Thirdly, we know that transitioning to electric vehicles is vital to the UK hitting our net zero targets, but so far this year more public electric vehicle chargers have been installed in Westminster than in the entire north of England. Labour would give confidence to motorists to make that switch to electric by accelerating the roll-out of charging points with binding targets on Government. Today’s press release from the Society of Motor Manufacturers and Traders talks about this very point. We have to do all we can to encourage people to make that switch, but we cannot do that without the chargers. We have all heard stories of people travelling from Scotland in electric cars and just not being able to charge them because the charging stations are not working or do not take the right payment type. That has to be fixed, otherwise people will quite understandably not be confident enough to make the switch.

Fourthly, Labour will make the UK a clean energy superpower. British businesses such as automotive manufacturers are being hammered by the highest energy costs in Europe. Our plan to make the UK a clean energy superpower by 2030 would bring down bills, support our vital manufacturing industries and turbocharge the UK’s international competitiveness. With a plan like that, it is little wonder that a supermajority of investors say that a Labour Government would be the best election outcome for UK markets.

Labour understands that the automotive industry will flourish only through vision, leadership and partnership. The automotive industry is the jewel in the crown of British manufacturing. It can and should have a bright future creating good jobs for people across the UK. It is Labour’s industrial strategy that will bring businesses, workers and unions together to safeguard the future of a sector that is the pride of communities across the country. It is Labour’s plan that the sector is crying out for, because the industry deserves better, communities deserve better and Britain deserves better.