UK Automotive Industry

Wera Hobhouse Excerpts

Monday 18th September 2023 Commons Chamber

[John Redwood (Wokingham) (Con)]

I rise to urge the Government to be careful about rushing to close our factories making diesel and petrol cars before we have established the electrical revolution and are confident that we have created the capacity and the extra jobs in the alternative power system that the hon. Member for Croydon Central (Sarah Jones) is so passionately recommending. I would ask the Labour Opposition, who seem even keener to close our petrol and diesel capacity more quickly, to consider why Germany, with a far larger automotive industry than our own, has decided with the EU to delay the ban on the sale of new petrol and diesel vehicles to 2035 rather than 2030, and also why Germany thinks it needs to make provision for the possibility that it can make cars that work on synthetic fuels or some derivative of hydrogen as an alternative to the battery system as a way of getting to a low carbon output. Germany might not be wrong. I think that we will discover as a country that it is much easier to close factories and terminate the production of petrol and diesel cars than it is to get those much-wanted electrical factories into operation, with all the supply chain that that requires.

[Wera Hobhouse (Bath) (LD)]

Is the right hon. Gentleman not making an important admission that although the EU has delayed ending the manufacture of combustion engines, there are important exemptions in that those cars should be run only on synthetic fuels and sustainable fuels?

[John Redwood]

I have said that the EU was keen to explore the synthetic fuel opportunity. In the meantime, it is not recommending the closure of traditional vehicle factories at pace. Indeed, the EU has recently required of its member states that they should not only speed up the roll-out of electrical charging points—which will clearly be needed if people are to buy more electric cars—but roll out the provision of hydrogen refuelling places, not synthetic fuels. It is probably easier to deal with synthetic fuels, because a good synthetic fuel that is liquid at normal temperatures can be used in the usual distribution system, using the sunk assets that already exist in the petrol and diesel system. Indeed, one of the ways to introduce synthetic fuels more easily would be to gradually increase the proportion of synthetic fuel mixed into traditional fuels, as we have with E10 petrol and as is being talked about for sustainable aviation fuels, where there are target percentages for the introduction of lower carbon ingredients in the fuels.

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[Wera Hobhouse (Bath) (LD)]

It is a pleasure to follow the hon. Member for Rugby (Mark Pawsey). I echo him in urging the Government to stick to the 2030 target—a point that I will make in my speech.

The climate emergency will not go away. Surface transport is responsible for nearly a third of the UK’s carbon emissions, and more than half of surface transport emissions come from private cars and taxis. The electric vehicle transition is therefore vital. The 2030 target to end the sale of new petrol and diesel vehicles is an important tool to bring us towards decarbonisation. It gives the industry the certainty for which it so often asks, and it has worked: sales of EVs in the UK are exceeding expectations, according to Chris Stark of the Climate Change Committee. That gives us confidence that the 2030 target is achievable, proving all the naysayers wrong. Reports suggest, however, that the Government have been tempted to cut the “green crap” and that they will water down this important target. The permanent fear that the UK Government will go back on their word weakens our automotive industry. A tough target is better than persistent U-turns.

We Liberal Democrats have consistently encouraged the automotive industry to embrace the future and to transition from petrol and diesel to electric cars. We need a Government who are equally committed and who will not be derailed by their Back Benchers. I am very pleased that BMW will build the new electric Mini in Oxford; it is a significant investment that demonstrates the economic opportunities. I am even more excited that Somerset will host a new gigafactory for battery production. Those are important milestones on which we must build.

We now need a longer-term strategy to truly grow the industry. Transport & Environment UK is worried about how much of the more than £800 million in the automotive transformation fund has been spent. It is concerned that wider investment cannot be maintained without expensive subsidies. Uncertainty around the zero-emission vehicle mandate and the lack of an overall industrial strategy add to those concerns.

The Government have a poor track record when it comes to building electric vehicle supply chains. The collapse of Britishvolt was a staggering blow. When he was Chancellor, the Prime Minister said that Britishvolt

“will produce enough batteries for over 300,000 electric vehicles each year”.

Now Britishvolt will produce none. Mistakes were made at the company, but was there really nothing that the Government could have done to prevent the loss of such an important business?

If we are to build an EV industry in the UK, we must ensure that there is enough demand. The Government must support manufacturers as global players. As we have heard, a clause in the UK Government’s Brexit deal means that at the end of this year, British-made EVs will face tariffs of up to 22% when exporting to the EU if they do not contain 40% local content. That puts UK manufacturers at a huge disadvantage. I would like to know what the Government, rather than overblowing the perceived Brexit benefits, are actually doing about an acute issue that is putting the future of motor manufacturing in the UK at great risk.

Although the sales targets for commercial EVs are very encouraging, private uptake of EVs is proving more difficult. We have heard many of the reasons for that, but the main barrier for potential private buyers, apart from cost, remains charging anxiety. So far, EVs are not a realistic option for householders who cannot park or charge their cars outside or near their homes. In last year’s EV infrastructure strategy, the Government made no firm commitment that infrastructure roll-out would rise in line with EV market uptake. Recent Government statistics show that only 19% of all chargers are rapid chargers. That is a problem for long-distance travel: people cannot be expected to wait for hours to charge their car when they are on the go.

We Liberal Democrats would invest urgently to speed up the installation of rapid charging points throughout the country. Rapid chargers must be installed where people will use them. Motorway service stations must therefore be the No. 1 priority, but we must consider other locations, too.

[John Redwood]

Is the hon. Lady also worried that there is a lack of cable capacity under our streets and of grid capacity to get the power to those fast chargers? How long will that take to resolve and how will that be done?

[Wera Hobhouse]

I share the right hon. Gentleman’s concerns, which is why we consistently make the case for upgrading the grid. That is one of the most important things for getting to net zero in the UK, not just for vehicle charging, but for the roll-out of all the electric infrastructure we need for our many renewable energy installations. I share his concern, but the solution is not to stop the roll-out of electric vehicles; it is to improve the grid and get things sped up as quickly as possible.

If, for example, electric charge points are installed in places where non-electric vehicles park, such as in lamp posts or bollards, valuable charging space will be lost. We Liberal Democrats would give grants to parish and town councils to install charging facilities where they will actually be used—for instance, at village and community halls.

It is important that the Government do not stop the incentives for EV uptake. They must stop penalising people who cannot charge their EVs at home. Drivers currently pay 20% value added tax to use a public charge point, compared with 5% VAT for home charging. That unjustifiable discrepancy must end and the VAT rate for all electric vehicle charges must be equalised at 5%.

Electric vehicles will drive us down the road to net zero. Infrastructure and incentives will be vital. What we need is a Government who are willing to fuel this transition, rather than being content to trundle along in the slow lane.

[Saqib Bhatti (Meriden) (Con)]

I refer the House to my entry in the Register of Members’ Financial Interests. I am delighted to speak in this debate, because we cannot have a debate on this issue without consideration of the role of the west midlands. I am honoured to follow my hon. Friend the Member for Rugby (Mark Pawsey), who has spoken passionately both in this debate and previously on this topic. We also cannot have this debate without talking about the role of my constituents in Meriden and in Solihull borough.

The automotive industry is more than just an employer in the west midlands; it is part of our DNA. The earliest reports of a car manufacturer stretch as far back as the late 19th century. We have been the home of a number of household names, most recently Jaguar Land Rover. Some of these stats have already been mentioned, but to give context to the power of the automotive industry in the west midlands, in 2019 we made more than £14 billion-worth of exports—double the total of any other region in the UK and about 36% of the UK total.

The UK automotive sector employs about 160,000 people across the country, a third of them in the west midlands. The Jaguar Land Rover plant in Solihull borough has 9,000 employees, many of them my constituents. The plant is responsible for some iconic cars, including the Range Rover, the Range Rover Sport, the Discovery and the Defender, and long may that continue.

However, like the rest of the country, the automotive sector is in a decade of transition, and it is the transition to electric vehicles that I want to focus on. As has been said, the one thing that businesses hate and despise is uncertainty. It undermines confidence, makes it impossible for them to plan and invest, and ultimately results in lost opportunities. While I understand the challenge of the 2030 transition, the decision has been made, and now it is our job to support the automotive sector to achieve its goals. I am pleased that the commitments from Government have continued to highlight that, and we must continue to do so.

To give an example, Jaguar Land Rover has already committed £15 billion to developing new electric models, and we already know about the £4 billion investment in the gigafactory in Somerset. In the west midlands over the past five years production has significantly ramped up and billions have been invested in the region. Despite the naysayers, the doom-mongers and all those talking down the automotive sector, the transition to fully electric vehicles has not scared off the industry—in fact, it has spurred it on. I also shared the concerns of my hon. Friend the Member for Rugby when the announcement was first made, but the opposite was true: Jaguar Land Rover has a seven-year investment plan and is already on its way. I think it will be fully electric in its vehicle production by 2025, way earlier than the 2030 deadline, and just last week we heard about BMW investing £600 million in Oxford to build the iconic Mini.

We have heard concerns about EV charging, but I take a different view. I think it is for the private sector to deliver it. Just two weeks ago, at the National Exhibition Centre in my constituency, my right hon. Friend the Chancellor, the Mayor of the West Midlands Andy Street, and I opened the UK’s largest EV charging network, arguably the largest in Europe. I say arguably, because I think it is the largest in Europe, but others argue to the contrary. Certainly it is the largest in the UK, and it now has the capacity to charge 180 vehicles at the same time with fast charging. If you are ever in my part of the world in your EV, Madam Deputy Speaker, please do stop over at the National Exhibition Centre. You will see the signs. The key thing is that that was all driven by private sector investment.

[Wera Hobhouse]

I hear what the hon. Gentleman says about private investment, but is he not worried, as I am, about how many different apps and different ways to charge their vehicles consumers will have to have? How does he propose that that could be unified to make things easier for consumers?

[Saqib Bhatti]

That is an interesting point; there was a conversation about that on the day. There is a recognition that there will be a variety of ways that charging can happen, and the industry itself says it will adapt. The opening of the car charging park, which as I said is the largest in the UK, with the industry committed to doing much more across the country, is a prime example of how the private sector will lead the way. The hon. Lady made a good point that charging networks have to be in a place where the cars can get to them, but I am confident and I have more optimism than she does. I think they will get there through pure necessity: the consumer will demand it and the market will supply it.

I was pleased to see my hon. Friend the new Member for Uxbridge and South Ruislip (Steve Tuckwell) join us in the House. I campaigned for him and I think the people of Uxbridge and South Ruislip made the right decision. However, after the campaign a parallel was drawn, wrongly in my opinion, between a deeply damaging ultra low emission zone policy imposed by the ideological Mayor of London, who as the Uxbridge result demonstrates is clearly out of touch with his residents, and the transition to EV.

As someone who is pro the EV transition, who understands that businesses need certainty to plan and that they are already on the way, I think we need to be able to welcome challenges from colleagues. This is probably one of the most transformative transitions the industry and the country—probably even the world—are going to go through, as transformative as the industrial revolution of the 18th and 19th centuries. We owe it to our constituents to ensure that, when the challenges come, we look at them over and over again, whether on EV charging, gigafactories or the cost of EVs themselves.

The transition has to be affordable. My right hon. Friend the Member for Wokingham (John Redwood) talked about putting the consumer at the heart of this, and he is right. We have to appeal to more than the heart; we have to make sure that it makes economic sense for households and hard-working families across Britain. As people who are pro the transition, we must respect the challenge from those who argue against it. We have a responsibility to come up with the answers and to show leadership in that way. The charging park that I referred to is a good example of that, and the investment by Jaguar Land Rover is a great example of its commitment to ensuring that EVs will be the future, something that we will not only use in the UK, but export across the world.

I think the debate on net zero and whether the journey to get there is correct is happening in the wrong terms. I know the Opposition have already spoken about their £28 billion a year net zero package, but I note that it is not yet clear how they will fund that. In reality, the only answer is that either they will borrow, or they will tax hard-working families and businesses until their pips squeak and the industry falls to its knees. It is no wonder that they have aligned themselves with organisations such as Just Stop Oil that want to destroy the automotive sector, kill off jobs and ensure that their brand of socialism is the way forward. We can see that because, of course, the Labour party has taken a £1.5 million donation from organisations such as Just Stop Oil.

I understand why Labour wants to write big cheques, including the £28 billion plan: it is afraid of a market-driven approach, which would unleash our potential and power as a nation. A free market approach means a belief in freedom—the freedom to innovate; the freedom of the consumer to choose the product that they want to buy, driving up quality, which will be absolutely necessary as we get international competitors such as the Chinese; and, of course, freedom from the shackles of socialism. We know that that freedom will be necessary if we are to deliver the transition to net zero.

I welcome the debate. I am optimistic about the opportunities presented by the automotive sector. I will always fight for my constituents in Meriden and Solihull borough to be part of a thriving industry that will compete globally for many decades to come.