Automotive Manufacturing: Employment

I beg to move,

That this House has considered Government support for employment in the automotive manufacturing sector.

It is a pleasure to serve under your chairmanship, Sir John. The automotive industry is an important part of the UK economy, contributing £93 billion in turnover and £22 billion in value added. It invests around £4 billion each year in research and development and employs around 0.8 million people across the wider industry. Many of these are high-skilled, high-paid jobs, of which a considerable proportion are outside London and the south-east, but I am pleased to say that some of these high-value jobs are in the south-east, in places like my constituency of Reigate.

In Burgh Heath, just down the road from Epsom, we find the UK headquarters of Toyota. It is not only one of the biggest employers in the local area; it is also an eco-HQ. In a project that started in 2014, Toyota partnered with Kew royal botanic gardens and the Surrey Wildlife Trust to create a landscaped oasis full of native species from the surrounding countryside, complete with an orchard and meadow. It is wonderful to see a business taking the time and energy to ensure its HQ fits into our special corner of Surrey.

And it does not stop there. Outside the site, Toyota has supported many local initiatives, from providing rooms for community meetings to providing buses for local groups and charities. In 2024, more than £40,000 in grants were given to support the work of local groups, including, to name just a few: the Brigitte Trust; Home-Start Epsom, Ewell and Banstead; St Catherine’s hospice; and Warren Mead school parents and friends association. Before I talk more broadly about the automotive industry, I want to take the opportunity to thank Toyota GB for its significant contribution to the Banstead, Burgh Heath and Epsom area.

The automotive industry is important to this country and our economy, and it is vital that it is not smothered by over-regulation, over-taxation and green initiatives. Only by creating an environment that is conducive to growth will we see the creation of more high-quality jobs. UK car and commercial vehicle production saw a significant decline of 11.6% in February 2025. Worryingly, that marks the 12th consecutive month of declining car production. This must be an important wake-up call. More must be done to protect the automotive industry we already have, to help it grow and to encourage inward investment in new plants and new technologies. It can only continue to create new jobs and innovative technologies with growth-supporting policies.

The automotive industry accounts for over 12% of total UK goods exports, generating £115 billion of trade in total automotive imports and exports. Eight out of 10 cars produced in the UK are exported overseas to 140 different countries, but automotive manufacturers now face additional US tariff costs of around £1.9 billion, which will have a significant and detrimental impact on the industry. The USA is the UK’s second largest car export market after the EU, with exports of over 101,000 units in 2024. These tariffs have material implications for competitiveness, investment and export potential, and it is vital that the Government’s policymaking reflects this new protectionist and uncertain environment. With this massive setback to the industry, it is now even more important that we get things right domestically, to create an environment that stimulates growth for this important industry. I want to raise some of the biggest challenges here in the UK, and I ask the Minister to confirm her plans to address them.

In simple terms, for an industry to thrive, it needs to be able to manufacture products at competitive cost, employ people with the skills it needs, have free access to a market for its products without barriers or restrictions, and not be taxed to high heaven, so that it can reinvest in innovation and growth. A good product will always do well. If it is something someone needs, if it provides value for money and if it makes their life easier, they will buy it—it really is that straightforward—so let us talk about the zero emission vehicle mandate challenge first.

The ZEV mandate sets out the proportion of new zero emission cars and vans that manufacturers are required to produce each year up to 2030: 80% of new cars and 70% of new vans sold in Great Britain must be electric vehicles by 2030, increasing to 100% by 2035. Part of the reason for introducing this policy was to provide investment certainty for the charging sector to expand the network, given that lack of charging points is one of the things that puts consumers off buying an electric car. There can be no doubt that it is a well-intentioned policy, but as the old saying goes, the road to hell is paved with good intentions.

Notably, the moving of goalposts by Governments of various colours in recent years has been deeply unhelpful. The previous Government made the decision to delay the ban on new diesel and petrol cars by five years, from 2030 to 2035, whereas the new Government have reversed that. Putting aside the question of which position is the correct one, such chopping and changing is not fair on the automotive industry, which needs certainty and consistency so that it can deliver what is expected of it while still growing its businesses.

I do, however, recognise the Government’s recent announcement about increasing the flexibility of the ZEV mandate, which is welcomed by the industry and shows that the Government are listening. In particular, I welcome the reduction in fines for missing targets and the allowance for all forms of hybrid cars until 2035. However, I would suggest that the whole approach in this area needs to be reconsidered as a priority. Tinkering is not enough.

The ZEV mandate targets are incredibly challenging for businesses to meet. It makes no sense to expect businesses to dictate what products their customers should buy, when we all know that consumer preference and need should drive the products that a business sells, and rightly so. In 2025, ZEV sales will need to increase by 43% for cars and 171% for vans for automotive businesses to achieve the mandate targets. That is not achievable, and a fine of £12,000 per vehicle is levied on those businesses for every missed EV sale.

The automotive industry cannot win on this one. Consumers are not ready to buy EVs yet, because of the lack of charging infrastructure, the battery range issues and the cost, but the automotive businesses will be held responsible and expected to pay the price. If we continue in that way, we will see contraction of the industry, plant closures and job losses, all in the name of net zero. That has already started, with Vauxhall owner Stellantis announcing plans to close a van factory in Luton that employs around 1,100 people.

The industry has already invested billions in bringing more than 130 ZEV models to market. Despite spending some £4.5 billion in market support for EVs in 2024, it still missed last year’s target by some way. Such a level of support from industry is unsustainable and is diverting resources away from investment in new technology, models, plants, and research and development. I urge the Government to take responsibility for their role in delivering charging infrastructure and lowering energy costs, rather than beating businesses over the head for their own failings.

I also urge the Minister to review the mandate targets as soon as possible and to consider other, more effective ways of driving growth in EV take-up. It would make much more sense to incentivise consumers, rather than penalising businesses. The ZEV mandate targets cannot magically drive demand out of thin air. What we need is more carrot and less stick.

Has the Minister considered such alternative options as reducing the VAT on EV sales and public charging, or offering plug-in grants for cars? Those could be straightforward and effective ways of boosting consumer demand. If the Government are wedded to the current draconian ZEV mandate approach, the fair thing would be for them to commit to delivering public charging infrastructure on equivalent targets.

For example, in 2025 the target is for 28% of new car sales to be electric, so the Government must ensure there are sufficient public charging points across the UK to serve those new EVs by the end of 2025. If the Government fail to do that, the shortfall should be offset against the fines levied on the automotive industry, reducing what it has to pay. Surely that is fairer. The Government need to play their role and must also be held to account when they do not deliver.

Before moving on, I want to touch on domestic energy prices, which apply to all manufacturing industries, not just automotive.

I commend the hon. Lady for securing the debate. I did some research on the industry back home in Northern Ireland, and I am sorry that I cannot make a speech because I have sponsored an event at 10 am, and it cannot happen if I am not there.

We have a vibrant automotive sector in Northern Ireland that provides some 11% of employment and 13% of gross value added. That is down not just to Wrightbus, which has great sales across the United Kingdom and further afield, but to the rest of the automotive industry in Northern Ireland. Does the hon. Lady agree that the Government need to step up in supporting businesses and helping research and development? We have the skills, but we need the support, and today’s debate is a significant step forward for the industry across this great United Kingdom. Research and development is on the mainland, yes, but it is also in Northern Ireland. The Minister knows that already and, I suspect, is already on it.

I agree with the hon. Member on the importance of supporting businesses. We must make sure that we remove obstacles and barriers that hinder growth. I hope that conversation starts today and that we can get to a better place where we support our amazing automotive industry, which delivers so much for this country, including Northern Ireland.

Energy costs must come down. The industry cannot manufacture at a competitive cost with energy costs being so high compared with what other countries pay. We must not shoot ourselves in the foot with a net zero obsession. We must make sensible decisions on the energy mix to ensure energy security and value for money so that our manufacturing industry can compete on the global stage. That means investing in nuclear and not making the mistake of thinking that solar and wind are a silver bullet.

I urge the Minister to share her views on how she intends to reduce energy costs for manufacturing industries in the short to long term so that they are better able to compete. I recognise that some of this goes across many briefs, so I appreciate that this is not something over which she has full control.

Another important challenge is ensuring that we have a skilled workforce. Research by the Institute of the Motor Industry suggests that around 107,000 additional technicians will be needed by 2030. That is an amazing opportunity for this country. The more the industry grows, the more jobs and opportunity there will be, but we must ensure that we have people here with the skills to take up the jobs to ensure the industry’s success.

That is why it is so important to support apprenticeships, which are a great way for young people to gain the skills they need while working. A survey from the Society of Motor Manufacturers and Traders in February 2025 found that the UK automotive sector will increase apprenticeship numbers by 16% in 2025, with opportunities spanning manufacturing, supply chain logistics and vehicle maintenance. The most in-demand roles are design and development engineers, EV technicians and specialists in batteries and power electronics. That equates to over 700 new apprenticeships available among UK automakers.

It is a pleasure to serve under your chairship, Sir John. I thank the hon. Member for Reigate (Rebecca Paul) for introducing this timely debate, particularly in the light of the turmoil and uncertainty caused by US tariffs.

As on many occasions, I rise to champion a flagship site of the UK automotive sector: Jaguar Land Rover’s engine manufacturing centre at the i54, which is just outside my constituency. That world-class facility employs 1,700 people, with many of them living in my constituency. I welcome the 100 more roles recently announced as part of JLR’s drive towards electrification, which is part of an additional £18 billion investment over the next five years.

The UK automotive sector is a cornerstone of our manufacturing economy, generating £93 billion in turnover last year and supporting hundreds of thousands of skilled jobs. Yet, today, the sector faces serious uncertainty following the announcement of a 25% US tariff on automotive imports. I am therefore here to seek urgent clarifications. First, what progress has been made in negotiations with the US to remove or reduce those damaging tariffs? Secondly, in the worst-case scenario—the absence of a deal—how will the Government act to support the industry through the immediate and longer-term challenges?

The US is a crucial market for JLR, accounting for around a quarter of its global sales. A prolonged 25% tariff would hit the business and the UK auto sector disproportionately. We need a deal that prioritises reducing those barriers. I support the calm, clear and statesmanlike leadership of our Prime Minister amidst the turbulence and erratic policy shifts from across the Atlantic. However, if a deal cannot be secured, the Government must act swiftly to protect jobs, sustain investment and safeguard our industrial base.

In the west midlands, we are talking about a potential £6.2 billion hit—the biggest regional impact in the UK. The support announced at JLR’s Solihull site in April is welcome. To support the transition to net zero and the automotive sector, the Prime Minister has introduced pragmatic changes: easing EV targets, allowing cleaner petrol cars to count towards quotas and extending hybrid sales to 2035. Those realistic steps back innovation, while keeping our ambitions intact.

Thank you for indulging me, Sir John, and for letting me speak after I walked in so late. I also thank the hon. Member for Reigate (Rebecca Paul) and congratulate her on securing this important debate.

We have heard today how strategically important the automotive industry is for our country and about the £93 billion turnover across the industry and its supply chain. I would also like to flag how important the industry is to many of our regional economies. In my constituency, which covers Tipton, Wednesbury and Coseley—the home of the industrial revolution—we have 21,000 manufacturing jobs across 1,000 firms, many of them in the supply chain for the automotive industry.

I recently visited J.H. Lavender & Co., which makes cast aluminium casings for JLR’s new electric Land Rover. It was incredible to see the process go from the silver liquid all the way through to the finished casing. Those world-class products are made in a family firm in the heart of my constituency. Truflo makes industrial air-cooling fans that go in industrial vehicles—the construction and heavy goods vehicles we are all so familiar with—and exports across the world, including to China and the US. As my hon. Friend the Member for Wolverhampton North East (Mrs Brackenridge) so eloquently outlined, the west midlands is also the home of Jaguar Land Rover, with its 34,000 jobs—many of those people live in my constituency—and 200,000 jobs in the supply chain.

The automotive industry faces two key challenges: transition and tariffs. On the transition piece, automotive is critical if we are to reach net zero. I do not believe that this country will give up its cars—I certainly do not want to give up mine—so it matters that we move towards net zero in a way that is sustainable and that supports the freedom that owning a car brings. We can see that the investment towards that net zero future has already begun, whether it be JLR’s investment of £18 billion over the coming five years or the investment elsewhere in the industry. I was so glad the Prime Minister went to JLR in April to announce the flexibilities that have been needed for so long in the ZEV mandate to smooth the requirements, cut the fines and ensure that there is a continued role for hybrids.

We will move to the winding-up speeches now but, given how much time we have left, I emphasise that Front Benchers should not fall into the Gladstone trap of becoming intoxicated by the exuberance of their own verbosity.

It is a pleasure to serve under your chairship, Sir John. I thank the hon. Member for Reigate (Rebecca Paul) for securing this important debate.

The UK’s automotive industry is a cornerstone of our economy, contributing £93 billion and providing many high-skilled, high-wage jobs across the country, which pay 13% above the national average. Crucially, many are located outside London and the south-east. However, the industry faces intense global competition, supply chain pressures and the ongoing demands of the transition to net zero, as well as Trump’s disastrous tariffs, which are deliberately targeted at the automotive sector. The UK Government, under the Conservatives and now Labour, have struggled and failed to grow the economy. The automotive sector will need to be at the forefront of any plan to get on to the right path again.

When I visited BMW’s Mini plant in Cowley earlier this year—

I am grateful to my hon. Friend, as the Liberal Democrat spokesperson for trade, for visiting the Cowley Mini plant in Oxfordshire. All Liberal Democrat Oxfordshire MPs attended; it was a pleasurable visit and we saw the amazing work being done there. I am worried that the Government are asleep at the wheel on this issue and that we will see job cuts at Cowley as a result of the very high energy costs in the United Kingdom. I would like the Government to do more to tackle that and, potentially, to support the industry. Does my hon. Friend agree that the Government should announce greater flexibility, benefiting not just luxury manufacturers such as JLR—that is very welcome—but those that make cars intended for the mass market?

I certainly agree with what my hon. Friend says about energy prices, and I will talk about that a bit later.

When I visited BMW’s plant, I met hard-working staff, who are the most at risk if the Government continue to get this wrong. Whether plants are being closed or investment scaled down, people lose their livelihoods and a rich history of manufacturing at the heart of Britain is lost, possibly forever.

This sector is at a crossroads: with the right support, it can lead the way in innovation, climate action and economic resilience, but without swift and strategic action, we risk losing a competitive advantage built up over generations. That is why more must be done to end the uncertainties that the car industry faces, and that starts by building consumer confidence in electric vehicles. The previous Conservative Government failed to support a thriving electric vehicle market in the UK, implementing chaotic U-turns that badly hurt the industry, and they continually failed to deliver the charging infrastructure needed to boost demand, create jobs and cut emissions. The Government must right that wrong by cutting VAT on public charging by 5%, by investing urgently in schemes to speed up the installation of rapid charging points throughout the country and by making it as affordable as possible to own an EV by reducing electricity prices that are passed on to the consumer.

One of the clearest calls from the sector is on energy costs. UK automotive businesses face electricity prices that are, on average, twice as high as those in the EU; gas costs are nearly 60% higher. That is an unsustainable burden. If we are serious about reshoring manufacturing and making the UK a global hub for ZEVs, we must address that urgently.

Ensuring that we have a strong trading relationship with our economic allies is vital for supporting UK automotive employment. The EU remains our largest trading partner for vehicles, and electric vehicles are now the biggest share of UK automotive exports by value. With the next EU-UK summit on the horizon, the time to act is now. We must give investors and manufacturers certainty and protect the employment and regional growth that depend on it.

I remind the remaining Back Benchers that interventions should be pertinent and pithy.

It is always a pleasure to serve under your chairmanship, Sir John. I begin by drawing the House’s attention to my entries in the Register of Members’ Financial Interests. I congratulate my hon. Friend the Member for Reigate (Rebecca Paul) on not only securing this debate but delivering a superb opening speech. She spoke with passion for the automotive sector, particularly Toyota in her constituency, and she spoke with realism about the challenges that we face, and the other way that is possible to ensure that consumers get to choose vehicles of the future that are greener and cleaner and do not rely on fossil fuels, but do not necessarily fit in with the Government’s chosen winner, despite the fact that they claim to be technology neutral. That is battery electric, whose sales figures, once we remove fleet sales, are utterly appalling because people simply do not want to buy one of those vehicles.

Employment in the automotive manufacturing sector— a sector that has long been the backbone of British industry, supporting hundreds of thousands of jobs and driving innovation—is the foundation of regional economies across our great United Kingdom. My constituency does not have any major vehicle manufacturers, but it sits in the absolute heart of motorsport valley. The motorsport sector and its supply chains do so much to create the next big thing and innovate. They find solutions, yes, for speed and the racetrack, but there is often a direct translation from the race car to the road car. So much British innovation in motorsport has found itself in the cars that I am sure all of us in this Chamber and people across the country drive today.

It is therefore with great concern that I speak about the marked lack of support for the vital automotive sector under this Labour Government. Let us be clear that this is not a new challenge: automotive manufacturing has been under pressure for many years from the combined forces of global competition, supply chain shocks and the urgent transition to cleaner technologies—note the plural, cleaner technologies; there is not just one. We now see a deeper, more systemic failure, which is rooted in the inability of this Government to deliver on their own promises and provide the strategic direction that the industry so desperately needs.

Will the hon. Member give way on that point?

I will give way to my constituency neighbour.

Does the hon. Member regret the lack of action to bring forward battery manufacturing in the UK under the Conservative Government?

What I regret is the ZEV mandate, which is why I voted against it at the time. It puts shackles around our automotive industry, and it needs to be revisited so that our automotive sector has the freedom to get on, innovate and provide future solutions that consumers might actually want to buy.

Even with the electric obsession, the promised gigafactory developments remain stalled or mired in uncertainty, commercial investment incentives have been vague at best and crucial supply chain support has failed to materialise in any meaningful way. Labour also pledged to spend on a national training programme to reskill workers for the green transition, yet we still await details of how, when and, crucially, where that will be delivered.

The skills gap in the automotive industry is widening by the day. Thousands of jobs are at risk, not because there is no demand for people to work in that sector, but because we do not have a pipeline of trained, job-ready individuals. The industry has been crying out for a co-ordinated national effort to address this, and what it has received instead is a patchwork of pilot schemes and a lot of ministerial hot air.

Contrast that with the pragmatic and targeted steps taken by the last Government, which launched the Advanced Propulsion Centre and the Faraday battery challenge—programmes that secured investment in cutting-edge technologies and laid the groundwork for the electric vehicle sector in particular. To attract global investment, we need to back British innovation and give investors confidence in our long-term industrial strategy. In government, the Conservatives also took real action to support jobs: the automotive transformation fund, which was backed by Conservative Ministers, delivered vital support to manufacturers, and let us not forget the commitment made to freeports, which are already starting to attract inward investment and create highly skilled jobs, including in areas directly linked to automotive logistics and component manufacture.