Automotive Industry

I beg to move,

That this House recognises that the automotive industry is the jewel in the crown of British manufacturing and believes it can have a bright future creating good jobs for people across the UK; regrets that after 13 years of Conservative neglect the UK risks losing this world-class industry, putting thousands of jobs under threat; condemns the Government for its lack of an industrial strategy and the negative impact this has had on investment in the UK’s automotive sector; calls on the Government to urgently resolve the rules of origin changes which are due to take effect in 2024, working with partners across Europe to negotiate a deal that works for manufacturers; and further calls on the Government to adopt an active industrial strategy to build the battery factory capacity needed to secure the automotive sector for decades to come.

It is a real pleasure to open this debate on an issue that I know is close to the hearts of many colleagues and constituents. Many Members present represent some of the most iconic names in UK automotive production. For me, it is very much an issue of huge personal significance. Sunderland, where I grew up, is of course renowned not just for its wonderful football team but for the tremendous success of the Nissan plant. I am very proud to say that many friends from my childhood still work in that plant. Of all the great businesses that I get to visit, that is one of my absolute favourites, and I know that colleagues will feel just as strongly about the parts of the automotive industry that they and their constituencies are associated with.

That industry is full of skilled and committed workers, innovation, export success and huge growth potential. However, we have called this Opposition day debate because even the most ardent defender of the Government could not fail to be worried about the health of the sector as it stands. The British car industry should and could be booming, as should the wider automotive sector, yet production has slumped by over a third under the Conservatives. There are huge concerns about a series of major policy failures, including domestic battery production facilities, trade barriers post Brexit, and higher energy costs and other supply chain issues. Although this is an Opposition day debate, I know that those concerns are shared widely across the House, and I hope that, by having this debate, we are able to express the clear political commitment of this House to that crucial sector.

My hon. Friend will be aware of the world-class Toyota engine plant in my constituency that produces the highest-quality hybrid engines—one of the first plants outside Japan to do so. Does he agree that hybrid is part of the solution, not, as the Government think, part of the problem?

I do not know whether I am supposed to declare an interest, but I drive a Toyota hybrid myself—I have a large family and have to get between Manchester and London, and that is a pretty sound option for doing so. I am aware of the issue that my hon. Friend raises, as is the shadow Transport Secretary, my hon. Friend the Member for Sheffield, Heeley (Louise Haigh). We must be careful to ensure that there is certainty so that that transition we are all seeking can happen. I know that there are particular issues relating to that sector and that side of the industry. We are alert to those issues, and we will, of course, work with him, his constituents and the expertise in this country and beyond to ensure that that timescale is done properly. For many people seeking to make the transition—we are seeing a huge response from the public on that—that is the option that is currently available, particularly for families. We must bear in mind that the solution has to be something that works for all our constituents, and we must be cognisant of their concerns. I am grateful to him for raising that point at this stage of the debate.

I worry at times that the Government, and maybe especially the Secretary of State for Business and Trade, do not have a great deal of time for industry at all. Artificial intelligence, tech and financial services are all crucial sectors, but we should not for one moment think that there is no role for industry. Nor should we ever believe that there is a false choice between services and manufacturing. Support for the automotive sector is not nostalgia. Many of the plants that we will talk about in the debate are the lifeblood of their communities, providing good work and good wages. However, just as in other crucial industries—steel is another good example—I get no sense that securing the long-term future of the sector and managing the transition to a low-carbon economy are priorities for the Government.

Last month, I visited the new Caterham Cars production plant in my constituency, to which the company has had to move because its production is insufficient to meet the demand that it has at the moment. It will take on more employees and apprentices, and it will manufacture more of the vehicles for which it is famous. I remind the shadow Secretary of State that that expansion in the industry has happened under a Conservative Government. Does he welcome that news?

I am incredibly happy to welcome that news and the positive story that the hon. Member sets out, but I do not think that any of the success that he has seen detracts from the fact that there are significant policy challenges. The overall number of vehicles has declined, as he will know, and yes, the pandemic and the semi-conductor supply chain issues happened, but that does not remove the need for this House to take seriously the rules of origin, the battery-making capacity and so on. We are not in any way on track. There is also, frankly, the international competitive position. Other countries are simply indicating that they want those industries and that investment much more than we do. It is not so much that the Conservative party has turned up to a gunfight with a knife, but that it is not showing up to the fight at all.

What we need is a plan of action. That is what the Labour party has developed, and it is what we want the chance to implement should we form the next Government. Our plan addresses battery capacity and charging infrastructure, as well as key issues such as planning and grid regulation. We are up front about the challenges that we face, but we are ambitious for the future. Frankly, that is nothing short of what is required. Our plan starts with having an active industrial strategy. I know that some Conservatives do not like that kind of terminology, but I say simply that all countries need an industrial strategy. To go back to the example of Nissan, that was part of an explicit strategy—by even Margaret Thatcher’s Government—to attract automotive expertise to the UK. The absence of any coherent modern industrial strategy is hurting investment into the UK.

Other countries are simply pushing ahead, recognising that the challenges that we are facing have to be met nationally by Governments with skin in the game. Industry is crying out, first, for stability, and secondly, for a partner and some clear policy signals. That is exactly what it will get from a Labour Government. That is why we have said that we would put the new Industrial Strategy Council on a statutory footing, giving some reassurance that the instability of the Conservative years is at an end.

Could the shadow Minister clarify how many gigafactories this Government have enabled to be built in the UK?

I am more than happy to. My hon. Friend will know that we currently have one facility, which is the Envision facility at Nissan in Sunderland. The overall number will depend on how big those factories are, but broadly we will need three to four in the interim, and by 2040 we will need eight to 10.

Germany, for instance, already has four to five gigafactories up and running. A further four are almost up and running, and it is in talks for a further advance on that position. The sense is that Germany is genuinely 10 times ahead of us in that capacity, and while people might think, “Well, Germany is a country with incredible automotive history, reputation and strength”, there are other countries that we are already losing out to. Spain, for instance, has a very active industrial strategy when it comes to the automotive sector, and eastern Europe has had tremendous success in that area. Because automotive is about regional markets, simply seeing what other countries are doing will have huge consequences for the potential for investment in this country. Crucially, we should be playing to the UK’s strengths in areas such as research and development, like the fantastic programmes at the UK Battery Industrialisation Centre in Warwick, which my hon. Friend the Member for Sheffield, Heeley and I were able to visit recently.

My hon. Friend has rightly talked about producing batteries, but the position with hydrogen is very similar: if we look at what Germany is doing, particularly with buses and bigger vehicles, we are years behind. We really need to invest in that area.

I thoroughly agree—the scale of ambition that I see around the world daunts me when I compare it with this Government’s ambition. There are some incredibly exciting technologies out there, including sodium-ion batteries that would reduce our dependence on lithium and almost certainly cut costs in battery production. Hydrogen is clearly going to be extremely exciting, as are fuel cells, and there are markets for off-road vehicles that could be huge potential markets for the UK. We should also not forget buses: that is an area in which new technology could contribute to things like cleaner air, as well as better transport.

Does the shadow Minister agree that on top of battery innovation and hydrogen innovation, the UK is leading in another field: that of synthetic fuels? However, giving the automotive sector a really strong future in this country involves a whole-system analysis, not just of how the vehicle is manufactured but how the energy that will run it is manufactured. That involves looking again at the zero tailpipe standards that are coming in, because if we have that whole-system analysis, we will get to green technology and greener transport but with a whole-picture effect.

I agree with part of what the hon. Gentleman has said. I agree about the whole-system analysis: many parts of the decarbonisation journey that industry will need to take on will be a much bigger question than simply unplugging one form of old fossil fuel technology and plugging in another. For instance, the steel industry will have to think about scrap if it is to make the conversion to electric arc furnaces; and if we are to move towards synthetic fuels, we will clearly have to look at where the feed stocks are coming from.

However, one of the most defining features of the past 13 years—I say this without any kind of partisanship—has been a series of very ambitious targets from this Government in areas that relate to decarbonisation, but with no real means to deliver them. That target is then pulled away, and confidence in the British state to decarbonise falls apart. I am thinking particularly about the famous “cut the green crap” comments from the former Prime Minister, David Cameron, regarding home insulation. When we talk about changing existing Government policy, we should not underestimate just how little confidence the international business community has in this Government’s promises at times. Broadly, the approach has been very ambitious targets but with no means to actually deliver them, which undermines the case.

My hon. Friend is making a very effective speech. As he is talking about targets, will he come on to the roll-out of charging points? My constituency has three motorways in it and incredibly high levels of pollution. We need to remove all the barriers, both to net zero and to reducing that pollution. Does my hon. Friend agree that constituencies in the north such as mine need that situation addressed? It is shameful that, as I understand it, more chargers were installed in Westminster this year than across the whole of the north of England. We in the north have those issues of pollution, and we need to move faster in addressing them. My hon. Friend may be planning to come on to that point, but it is an important one.

I am incredibly grateful to my hon. Friend for making those points. The approach of the Front Bench—from her, from me on industrial policy, and from my hon. Friend the Member for Sheffield, Heeley on transport policy—must bring those two things together. We need the policies in place that will make this country a world leader in the production of vehicles and ensure that it also works for consumers. She raises the fact that there are more charging points in Westminster—I know my hon. Friend’s constituency, which is not far from mine—and the difference between comparable parts of this country, north and south, in the level, density and availability of chargers is unthinkable, let alone in comparison with Norway, for instance. Not only do we not have enough chargers but grid, maintenance and connection issues often mean they are out of order. I absolutely assure my hon. Friend that when we as a shadow Cabinet and a potential Government think about these issues, both vehicle production and consumers are paramount. Clearly, consumers want to purchase electric vehicles—that is the growth part of the market—but too often we do not have the infrastructure in place. It cannot be some form of novelty. I have driven electric vehicles around Greater Manchester when it was something of a novelty—I could get access to chargers and, at times, preferential parking spaces near Deansgate, which is no small thing—but for mass market usage, neither the policies nor the infrastructure are yet in place. That needs to be widely recognised.

On the international trade position, it was always imperative to have a domestic battery industry, but it has become an existential issue because of the Government’s approach to our trading relationship with the EU. As discussed in relation to regional export markets, eight in 10 vehicles made in the UK last year were exported, so it is widely recognised that the impending cliff edge in the trade and co-operation agreement with the EU on rules of origin is a serious challenge to the future of the sector in the UK. The Government have been far too slow to realise the scale of that danger, and while they may promise that a deal is coming soon, I am afraid that “soon” cannot come soon enough. Major UK manufacturers including Stellantis, Jaguar Land Rover and Ford have all warned that a failure to reach a deal would cost jobs in the UK.

Will the hon. Gentleman give way?

Go on, then.

There is a news report about a new global company being launched by the French motor giant Renault and the Chinese manufacturer Geely that will invest €7 billion here, creating 19,000 jobs. Is that not exactly the kind of optimism Conservative Members talk about?

I think those companies must have seen the opinion polls and are wondering whether a Labour Government are coming, if there is as positive news as that could be. I would simply say to all Conservative Members that, on any aspect of industrial policy, there is too often on their side a desire to pick individual stories or statistics and try to pretend that substantial and significant issues do not exist. If we talk to anybody reasonably objective in this sector, they will point out—on battery production, rules of origin, charging infrastructure, industrial energy prices—that there are real challenges and they require some serious engagement from the other side, which to date has not been forthcoming.

I would like to add to that comment—my hon. Friend is making an excellent speech, by the way—what was said at the industry conference held by the Society of Motor Manufacturers and Traders a couple of weeks ago. The industry was speaking as one, and I am afraid it was critical of the Government, saying, “All these years on, remember that Baldrick at least had a cunning plan. Sadly, the Government don’t.”