UK Car Industry

(Urgent Question): To ask the Secretary of State for Business and Trade if she will make a statement on the future of the UK car industry.

The automotive industry is vital. It is a vital part of the UK economy and it is integral to delivering on levelling up, net zero and advancing global Britain. After a challenging period where covid and global supply chain shortages have impacted the international automotive industry, the UK sector is bouncing back. Production is increasing, and in 2022 the UK’s best-selling car was the Nissan Qashqai, built in Sunderland.

The automotive industry has a long and proud history in the UK. We are determined to build on our heritage and secure international investment in the technologies of the future, to position the UK as one of the best locations in the world in which to manufacture electric vehicles. We are leveraging investment from industry by providing Government support for new plants and upgrades to ensure that the automotive industry thrives into the future. Companies continue to show confidence in the UK, announcing major investments across the country, including £1 billion from Nissan and Envision to create an electric vehicle manufacturing hub in Sunderland; £100 million from Stellantis for the site in Ellesmere Port; and £380 million from Ford to make Halewood its first EV components site in Europe.

We will continue to work through our automotive transformation fund to build a global, competitive EV supply chain in the UK, boosting home-grown EV battery production, levelling up and advancing towards a greener future.

Thank you for granting this urgent question, Mr Speaker, and I thank the Minister for her response.

The warnings from Stellantis overnight are deeply concerning, not just for my constituents who work at Vauxhall Motors in Ellesmere Port, but for the automotive sector more widely. She will know of the huge efforts put in over recent years to secure the future of the plant and to move to electric vehicle production; significant contributions have been made from the management, the workforce, the local authority and the Government themselves. So it is beyond frustrating that just a couple of years later we find ourselves once again in a position where there is a threat to my constituents’ livelihoods.

We know what needs to be done to secure jobs in Ellesmere Port and in the wider automotive sector, because the sector has been telling the Government, as have we, that there needs to be a proper industrial strategy. So where is that strategy? Indeed, where is the Secretary of State? The EU is pumping billions into manufacturing as part of its green industrial plan, the US is investing trillions with the Inflation Reduction Act and we are being left behind. Every day this Government sit on their hands, that mountain to climb gets a little higher.

So we need urgent action, but I am afraid that all I have heard this morning is complacency. We need those gigafactories with spades in the ground this year, because we know the timescales that the industry invests across are long and it needs to see progress now. So will the Minister tell us what steps the Government are actively taking to increase the proportion of vehicle parts manufactured in the UK? We need to make sure our trading relationship with the EU is updated to reflect the global supply chain difficulties that all manufacturing industry is facing. So does she plan to make a formal request to reopen negotiations with the EU on the trade and co-operation agreement? It has been made repeatedly clear that without changes to the future trading arrangements, and without a proper industrial strategy, the UK car industry is at risk. What assurances can she give to my constituents that their futures matter to this Government? The UK car sector is the jewel in the crown of our manufacturing industry. If we lose it, it will not be coming back. So please, Minister, take action now.

The hon. Gentleman will know, when I respond to this question, just how seriously I take the sector, as he does—he and I have worked on this previously. I agree that the automotive industry is a vital part of the UK economy and I will go on to explain all the work we are doing there; if we add it all up, it is more or less a very strategic strategy. We know that it is integral to delivering on our levelling-up agenda, which is why it matters to so many constituents and why there are so many MPs in the Chamber today. We know that it matters to net zero and to advancing Global Britain. We also know how important this is to Members of Parliament because of the number of people who work in the sector.

The automotive industry employs around 166,000 people and includes major manufacturers, such as Jaguar Land Rover, Nissan, Toyota and BMW. We are leveraging investment from industry by providing support for new plants and upgrades to ensure that the UK automotive industry continues to thrive into the future. This includes Nissan’s £1 billion north-east electric vehicle hub, Ford’s £380 million investment in Halewood to make electric drive units, and Stellantis’s £100 million investment in Ellesmere Port for EV van production.

We work closely with the sector through the joint Government and industry-led Automotive Council, of which I am the co-chair, which discusses opportunities for growth, competitiveness and future opportunities. We also meet regularly with individual long-standing and new automotive companies to discuss a range of issues, including future investments.

On Government support, the Government and industry have jointly committed approximately £1.4 billion in innovative projects through the Advanced Propulsion Centre to accelerate the development and commercialisation of strategically important vehicle technologies, strengthening our competitive edge internationally. We also work on the automotive transformation fund, which puts the UK at the forefront of transition to zero-emission vehicles.

The automotive industry has been a huge success story for the west midlands and can be so in the future as we transition to electric vehicles. However, with 40% of the weight and cost of an electric vehicle being made up in the battery, it is vital that we get a battery manufacturing site in the west midlands. A site has been allocated at Coventry airport, immediately adjacent to the Battery Innovation Centre, where some innovative and brilliant work is taking place. Will the Minister provide Government support for the proposed gigafactory at Coventry Airport?

I am grateful to my hon. Friend for raising this issue. He and I worked together on the Business, Energy and Industrial Strategy Committee. He has always been a passionate advocate for his constituency. It is indeed a fantastic proposal and we are keen to make sure that we can support as much investment as possible and that sites are set up for gigafactories. We know how important it is to ensure that the supply chain is as reliable as possible. If my hon. Friend would like to meet me, we can go through the proposals in further detail.

I call the shadow Secretary of State.

I thank my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) for securing this urgent question on an area of fundamental importance not just to his constituency, but to the prosperity of the whole country.

For months now, Labour and industry have been warning the Government that this cliff edge was coming. It is a statement of the blindingly obvious that the lack of battery-making capacity in the UK, combined with changes to the rules of origin, was a car crash waiting to happen. It is a fact that, without domestic batteries, there will be no domestic automotive industry in the UK, yet the Government have no strategy to bring in the investment and infrastructure needed, and the rules of origin just make that even more compelling. This deadline to conform with the rules of origin has not been a secret, but where is the urgency, the ambition and the determination to keep our world-class automotive industry in the UK?

Once again, industry has been treated to a Government who are fond of big-state, top-down targets, but completely missing in action when it comes to how to deliver on those targets. Dare I say it that, despite warning after warning, it is clear that this Government are asleep at the wheel. Labour has a plan, through our industrial strategy—which Members can read as it is published—not just to protect the industry and the jobs that we have, but to deliver even more. We will part-finance those eight gigafactories, create 80,000 jobs and power 2 million electric vehicles, matching the incentives on offer from our rivals.

This is not just about public investment; it is about planning reform, changes to business rates, domestic energy security and supply, and more. That is the action that is needed. With respect, the Minister has not really answered any of the questions from my hon. Friend the Member for Ellesmere Port and Neston yet, so will the Government outline how they will secure the battery-making capacity that we desperately need in the UK? What is the Government’s view on the suitability and application of the rules of origin as they currently stand? Finally, will the Government wake up, grab the steering wheel and get control of the situation before it is far too late?

It is a good to hear that the Opposition are expecting businesses to make decisions on promises that may or may not come down the line, and on promises of sums of money that have been allocated and reallocated a number of times by the Labour party. This is not just my view: look at the figures from the Society of Motor Manufacturers and Traders, showing that British commercial vehicle production grew by 39% in 2022, the best since 2012, with exports surging by 63%. We are determined to make the UK the best location for export-led automotive manufacturing.

I am going to talk not about a promise, but about the programmes that are in place to ensure that supply chains and gigafactories are here to support the whole automotive sector. I have spoken about the Advanced Propulsion Centre—perhaps the Opposition do not understand how important that is—the Faraday battery challenge and “Driving the electric revolution”. We must not forget the Envision AESC announcement of its investment in a gigafactory in Sunderland or Johnson Matthey confirming its investment in the construction of a factory in Hertfordshire for proton exchange membrane fuel cell components for use in hydrogen vehicles.

Discussions are constantly ongoing with other potential investors into gigafactories in the UK. We are not doing this by ourselves in Government, making decisions that seem good on paper; as I said, I co-host the Automotive Council and just this week—possibly on Monday or Tuesday, I cannot remember—I caught up with Aston Martin, Bentley Motors, BMW, Ford, Jaguar Land Rover, McLaren Automotive, Nissan, Stellantis, Tesla, Toyota and the Volkswagen group. They are keen to continue working with us to ensure that we have supply chains here in the UK.

To secure the future of our vital automotive sector, we need to manufacture batteries in the UK. The industrial strategy in 2017, which my hon. Friend the Minister referred to, established the Faraday challenge to build on our cutting-edge research capability. The battery innovation centre was set up to develop manufacturing capacity. While the strategy is vital, and must be refreshed and continued, it is necessary but not sufficient; we need activism. When Mrs Thatcher lured Nissan and Toyota to this country, she travelled to Japan to make the case for locating here. Does that level of activism exist in the Government, and will the Minister commit to ensuring that we have those investments from companies around the world in the UK?

I believe that my right hon. Friend was the Secretary of State for Business, Energy and Industrial Strategy when the decision on the Faraday battery challenge was taken. He made sure that £211 million of funding was in place, so that technology could be developed to make batteries as efficient as they can be. That is just one part of our trying to secure investment into the UK. I can confirm that meetings are constantly taking place, including at Secretary of State level, with companies based in the UK and overseas, meeting with chief executive officers and chief financial officers to ensure that the UK is seen as an attractive place to manufacture cars. There is a global challenge around supply chains—it is not just a domestic issue—and we are keen to ensure that the UK continues to be seen as the best place to manufacture cars.

I call the SNP spokesperson.

The Minister is sticking her fingers in her ears and burying her head in the sand on this question. The Government were told time and time again about the rules of origin issues, and the car industry seems to be another casualty of the Government’s damaging Brexit. Increasing the uptake of low-emission vehicles is vital to meeting our net zero goals, but the UK’s disastrous trade deals are making the domestic manufacture of those vehicles impossible.

Stellantis has warned:

“If the cost of EV Manufacturing in the UK becomes uncompetitive and unsustainable operations will close.”

Has the Minister made an estimate of how many job losses it would lead to if the world’s fourth-largest carmaker closed its UK factories as a result of Brexit? Andy Palmer, a former chief operating officer, said that we are “running out of time” to get battery manufacturing in the UK, and that a failure to address the issues caused by Brexit will lead to the loss of 800,000 jobs in the UK. Car manufacturing has fallen sharply since the UK chose to leave the EU, from more than 1.5 million in 2016 to just 775,000. Does the Minister accept that the only way for Scotland to stop the decline of our industries is to gain independence and rejoin the world’s largest single market?

I would not expect anything less than a rerun of the conversation on Brexit. Fundamentally, the hon. Member does not like Brexit, does not like any trade deal, and does not even like the most integrated single market between England and Scotland, so I know that he has nothing appropriate to say.

Let us talk about the situation as it is: confidence in the UK automotive sector, and in the whole supply chain, has meant that Stellantis has invested more than £100 million in the Vauxhall plant in Ellesmere Port. That will see the plant transition to become the first mass-market all-electric plant in the UK, producing electric vans from 2023. That shows the confidence that that particular firm has in the UK.

We know that the production of electric units will go up, whether for private or commercial use, and we are doing everything we can to provide support on some of the more challenging issues in car manufacturing, such as access to energy and the cost of energy, which we have been working on as well. It is internationally challenging—I accept that—but the UK continues to be incredibly attractive for car manufacturing.

Many of my constituents work at the Vauxhall Luton van factory, which makes the incredibly successful Vivaro, so this issue really matters to them and to me, and it matters for our industrial future. Will the Minister flesh out in a little more detail the plan to get more battery manufacturing capacity here in the United Kingdom? When will there be announcements? What number of battery plants does she believe the United Kingdom needs to have a successful car manufacturing industry?

I thank my hon. Friend for that incredibly sensible question. I have talked about all the programmes of work we have in place to attract gigafactories to the UK and to ensure that we are using the best technology that we can. We have the automotive transformation fund, which is building globally competitive electric vehicle supply chains, and I have spoken about the Faraday project, which will unlock a huge amount of research and development. We have Envision, too. We are working with and we constantly talk to other investors to help them come and establish gigafactories in the UK. We know how important it is to have supply chains to deal with the remarkable amount of cars being manufactured here.

My hon. Friend will be pleased to know that we also published in the integrated review an updated report on critical minerals to ensure that we are able to access to those minerals and are not relying on a particular nation, but can diversify. As I have said, I co-chair the Automotive Council, and that will provide a huge amount of assurance to his constituents that we are working hand in hand with the sector.

I call the Chair of the Business and Trade Committee.

The story overnight came from written submissions to my Committee’s inquiry on the future of battery manufacturing in the UK. Stellantis will be here in Parliament next Tuesday to give further evidence. The Minister will know two things: that she and her departmental officials are in ongoing negotiations with other car manufacturers in the UK beyond Stellantis, and that all the car companies are raising exactly the same issues and are asking for a step up in activity from the Government and an end-to-end industrial strategy to show that the UK is serious about the future of UK production of electric vehicles. Will the Minister confirm for the record that those assertions—that the Department is in negotiations right now with other car manufacturing companies and that they are raising exactly the same issues as Stellantis—are indeed correct?