(9 months ago)
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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.
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.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I am very much a supporter of synthetic fuels. I think they will have a role to play in the years moving forward. Can the right hon. Gentleman tell us what emissions synthetic fuels will emit from a combustion engine compared with the current fossil fuel equivalent?
John Redwood
That is to ask, “How long is a piece of string?” A variety of these fuels are being produced in trials in small quantities. They need to have all their characteristics explored, then people will decide which ones give the best green output for the lowest cost for scale-up.
The whole House needs to get better at carbon accounting. I hear from all sides that unless we go for battery cars, we will not meet our net zero targets. I am suggesting that there may be other ways of getting closer to net zero targets through other types of fuels. I also do not quite understand why so many people in the House think that getting people to buy electric battery cars today helps us with our net zero targets. Let us take the example of a well-off person who decides to replace their petrol or diesel car with an electric battery vehicle. They have enough money to be able to afford one—they are quite expensive—and they are also fortunate in that they have a driveway or personal garage and can pay to have a charger put in at home. They realise that they will always be able to get there and back for short and medium distances without having to rely on unpredictable and rather scarce public charging systems, so they are ready to go. When they get home and recharge their car on the first night, however, there is no extra renewable electricity to send to them. We use every bit of renewable electricity every day, whether or not the wind is blowing, because it is given priority so, when the car is plugged in overnight, a gas power station will probably have to up its output a little to supply the electricity. Far from helping us to meet our net zero target, that new electric car is probably increasing the amount of electricity that has to be generated from fossil fuels.
I have read a number of studies that attempt to get to the truth of how much of a contribution, or detriment, getting more people to switch to electric cars might make to reducing world CO2, and there are rather different answers because the calculations are very complicated. I am more persuaded by the people who do total-life-of-vehicle calculations. We need to recognise that more CO2 is generated in producing a typical electric car, including the battery, than in producing a petrol or diesel car. Mining all the metals and minerals needed for the battery and battery production is particularly intensive, and more CO2 could be produced to deal with the waste when the battery reaches the end of its useful life and needs to be replaced, which is an expensive and complicated task.
To beat running a petrol or diesel car for a bit longer, a person running an electric car would need to do a very high mileage and would need to make sure that every unit of electricity used to charge the vehicle is generated from zero-carbon sources. At the moment, it is very clear that none of these requirements has been met. Although I can understand why we need to encourage people to go on this journey to build up the fleet of electric cars, against the day when we generate more zero-carbon electricity, we must accept that, in the short term, it is probably bad news for the world’s CO2.
I am worried that we may be in danger of not achieving our main green objective, at the same time that we are spending a lot of money on a subsidy war with other countries that are similarly desperate to get battery production. I am also very worried that the UK, Europe and, to a lesser extent, the United States of America are so behind China in putting in battery manufacturing capability, and so behind China in doing deals with world suppliers of critical minerals and battery components, that it places us in a very vulnerable industrial position, which is why both the European Union and the United Kingdom are having difficulties ensuring enough value added in electric cars to meet our own criteria. That is a common and shared problem, and the solution is not easy because we need to leapfrog 10 years, or whatever, to get to the point at which we have control over the minerals, the raw materials and the production of batteries so we can meet those criteria.
I am also very worried about how customers are left out of most of these debates. They are taken for granted and, when they do not behave in quite the way that politicians would like, politicians invent taxes, subsidies and bans to say, “Well, we are going to make you choose a car you would not have chosen for yourself, because we do not think you are making the right choices.” I would rather live in a world in which the hugely talented motor industry, and all the skilled scientists and technologists who help it, work away at producing cars that are better, more affordable, safer, higher quality and meet our service requirements so that we willingly buy the electric or synthetic fuel alternative, rather than sticking to petrol or diesel vehicles. We are not there yet, as we can see. The proportion of people wanting to buy electric cars is still a minority, despite all the very aggressive advertising, promotion and political weight behind them. Part of that is affordability, part of it is range, part of it is the worry about refuelling and part of it is uncertainty about battery life and repair. There are many complicated decisions when trying to make such a big switch in product availability, and people have come to like their traditional petrol or diesel vehicle. They have the measure of those vehicles and think they provide a very good service. As a country, we should not get too far ahead of our electorates and consumers.
If we look at the fast growth of electric car sales, from a very low base, we will find that it is much more concentrated in the business fleet market than in the personal choice market, because companies feel under more of a moral imperative to buy into this idea, which I have just exposed as somewhat odd, that these are super-green vehicles, whereas individuals say, “But it is not affordable, it is not practical and it is not what I want.”
Gavin Newlands
Does the right hon. Gentleman accept that the reason why fleet purchases are now massively outstripping personal purchases is the tax incentives given to fleet purchases, whereas the incentives for private purchases have all but disappeared under this Government?
John Redwood
The hon. Gentleman makes a very good point, and it is an additional reinforcement, but I think fleet buyers are also very conscious of the environmental requirements.
I stress that, for this to work, it has to be a popular revolution. Millions of people have to decide for themselves, having listened to the arguments and seen the products, that green products are better than the old products, and in some cases they very clearly are and people will rush out to buy them. If we are still in a world in which people are not of that view, we can subsidise, tax and lecture all we like, but people will not change their mind.
One of the ways in which businesses and people could get around any attempt by this Government or a future Government to ban all sales of new petrol and diesel vehicles in 2030, when the rest of the world is not doing so, is that people will set up businesses to import nearly new petrol and diesel cars from places that still sell them and make them, to sell them as second-hand cars on the UK market. I do not believe anyone is suggesting that we ban the sale of second-hand diesel and petrol cars, as that would immediately remove all the value from our cars, meaning that we are prisoners—we either run the car until it falls to pieces or we lose its value and are unable to make the changes we would normally make.
There will have to be a definition of what is a new car, and it will presumably have something to do with how long ago it was made and/or how many miles it has on the clock. Whatever the definition, there will then be a good opportunity for people to sell cars that are four months old, rather than three months old, or that have 3,000 miles on the clock instead of 500 delivery miles. There would be a nearly new market, but the cars would all be imports, because people here would try to obey the law.
I urge all politicians to remember that they cannot just lecture, ban, tax or subsidise people into doing things unless the product has an underlying merit that people can see. Can we please work with the industry to prove that underlying merit? And do not ban things in the meantime, because Britain will lose jobs and factories. We cannot save the electric vehicle until the electric vehicle saves itself.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is a pleasure to follow the right hon. Member for Wokingham (John Redwood), who made a very interesting speech. He asked many of the right questions, and he even came up with one or two right answers. I disagree with many of his conclusions, but it was interesting none the less.
The right hon. Gentleman talks about the electricity that will charge these batteries at home, in terms of renewables versus gas, etc. Obviously, in Scotland we will have a massive excess of renewable electricity in the coming years to power our electric vehicles, and we have a couple of large hydrogen schemes ready to go that will be powered by excess renewable electricity. This will add additional baseload to the grid in Scotland.
I did agree, however, with what the right hon. Gentleman said about a stick approach to consumers, as I do not want to see the Government produce a large stick. I made the point in an intervention that they have withdrawn many of the incentives to switch to electric vehicles. I prefer a much more balanced approach, where there is a carrot and a stick, particularly given that the price of EVs is still higher relatively than internal combustion engine cars. We want the switchover to electric cars and to our decarbonised future to be open to everyone, not just to people such as us in this Chamber, who can potentially afford it—I speak as an EV owner.
The Minister, like the Secretary of State today at the Society of Motor Manufacturers and Traders electrified event, which has been mentioned, was extremely bullish about the UK automotive industry, and recent announcements on the investments highlighted by the Minister and the Secretary of State earlier today are warmly welcomed. But right now they are a fig leaf to cover deeper issues—ones largely not caused by the sector itself. The UK automotive sector has a great many strings to its bow, but the challenges it faces are real and immediate. They include: the spectre of Brexit; slow and unresponsive UK Government policy, including the complete lack of an overall industry strategy, let alone a strategy for the sector; and an ongoing culture war within the Conservative party about the net zero agenda.
Of course, there is also the concerning pace of the Department for Transport’s EV charging infrastructure roll-out to consider, which highlights the contrast between Scotland’s rapid EV charging network and the shortcomings in England, particularly outside London. The disastrous decision to leave the European Union—one that was made for Scotland—has had profound consequences for many sectors, and the automotive industry is no exception. The intricate supply chains, just-in-time manufacturing processes and integrated regulatory frameworks that once underpinned our automotive sector have been disrupted, causing uncertainty and economic turbulence. Brexit has led to increased costs for manufacturers, who now face customs checks, tariffs, and regulatory divergence when exporting to our European neighbours. That has forced many manufacturers to reconsider their operations in the UK, leading to job losses and a loss of investment.
Dr Luke Evans (Bosworth) (Con)
It is dangerous to have this doom-mongering. Triumph Motorcycles in my constituency, for example, has seen its exports across the world, in emerging markets such as Asia and America, go from 40,000 to 70,000 in the past three years. Is that not exactly what we want to see from a bold UK, one that is looking outwards and expanding across the world? Triumph, right in my constituency, is a prime example of it.
Gavin Newlands
I am grateful for the intervention and, obviously, that is a triumph for Triumph, but it is very much the exception that proves the rule, as I am about to go on to state. I congratulate Triumph on its export success, but Brexit has caused immense damage to our automotive sector, with real-world consequences for workers and communities. Since Brexit, car production in the UK has plummeted from about 1.7 million in 2017 to just 840,000 in the 12 months leading up to July this year. Factories produced just 775,014 cars during 2022, the lowest figure since 1956.
Despite the much more positive recent news on investment, which has been mentioned, the new post-Brexit rules of origin that come into effect in January, which place tariffs of 10% on exports of electric cars between the UK and the EU if at least 45% of their value does not originate in the UK or EU, will be deeply damaging. The Minister mentioned Stellantis, the world’s fourth largest car manufacturer, which has recently warned that a commitment to make EVs in Britain is in jeopardy unless the Government renegotiate their Brexit deal with the EU to maintain existing trade rules until 2027. Mike Hawes, the chief executive of SMMT, speaking at the very same conference as the Secretary of State, echoed similar sentiments. Of course, the dogs on the street know that Brexit has been a disaster and they also now know that Labour owns this Brexit every bit as much as the Tory party. There is no mitigating, fixing or polishing Brexit, and the sad thing is that the Leader of the Opposition and the vast majority of those behind him also know that to be true.
To compound that issue, the UK Government’s approach to supporting both the industry and consumers during this period of upheaval has been less than ideal. We have witnessed unresponsive Government policy that lacks a comprehensive strategy for the sector’s future. The industry, a cornerstone of our economy, deserves a clear vision and targeted support to ensure its competitiveness and sustainability in a rapidly evolving global landscape. The ZEV—zero emission vehicle—mandate is a case in point, because on paper it is a good thing and it has cross-party support, save from some Conservative Members, but it has been bungled from start to finish. I say “finish”, but we still do not know the final details of the policy, and how it will be enacted or enforced, even though it is scheduled to kick in next year. Mike Hawes said this morning that
“until we see the regulations, we can’t plan, and if we cannot plan, we cannot deliver.”
Furthermore, the culture war within the Conservative party about the net zero agenda is sowing seeds of confusion and inaction. This morning, Mike Hawes had a message for the Conservatives, dressed up in a rhetorical reference they might understand:
“With respect, and I choose my words carefully—very carefully—where there is uncertainty may the Government bring certainty because on decarbonisation this industry is not for turning.”
We should all be united, not so much in quoting Margaret Thatcher—many in this Chamber might like me to do so, but it will not win me any votes—but in our efforts to combat climate change and achieve net zero emissions. We are instead witnessing political infighting that threatens to derail our progress. It is time for the Conservative party to put aside its internal divisions and focus on the pressing issue of climate change. One crucial aspect of that transition is the promotion of EVs.
The Scottish Government have taken decisive steps to support green transport, and we will continue to support the automotive industry to phase out the need for petrol and diesel cars by 2030. The most obvious example of this is on the charging infrastructure, particularly the rapid charging infrastructure, which I will come back to, but Scotland has also shone on incentives to drive switching from combustion engines to EVs. Over the past 10 years, Scottish Government grant funding has provided more than £165 million of interest-free loans to support the purchase of more than 6,100 vehicles, including my own—I have already declared that. If we look at that from a UK Government spending perspective, we see that that is the equivalent of £1.6 billion for 61,000 vehicles. The Scottish Government have provided nearly £5 million to support the installation of more than 16,000 home charge points across Scotland, which is the equivalent of nearly £50 million for 160,000 home chargers—that is over and above the Office for Zero Emission Vehicles grant funding from the UK Government. The Scottish Government have also provided the equivalent of more than £100 million to deliver 15,000 charge points to businesses.
Gavin Newlands
I suspect I know what the hon. Gentleman is going to say about Northern Ireland, but I will give way to him.
Jim Shannon
The hon. Gentleman is setting out a good case for what the Scottish National party has done in Scotland, and it is much welcomed. In Northern Ireland, we have a real shortfall, because electric cars are being encouraged but there are not enough charging points. Has he taken into consideration the rural community, who depend upon their diesel cars in my area? It is not possible to have EV charging points in the rural community, where it is needed, just as it is in the urban areas.
Gavin Newlands
Praise for the SNP from the Democratic Unionist party might also not feature on my leaflets in the west of Scotland, as that might cause more problems than help. However, the hon. Gentleman makes a good point about rural chargers, as they are certainly part of the solution. Internal combustion engines and so on will clearly have to be part of the mix for some time to come for those in rural communities. That is where Scotland has taken a different approach over the past decade and more. Scotland has a comprehensive charging network, but the parts of it that are the most comprehensive are in the highlands, the Western Isles and Orkney—they are in the rural and island locations, where the private sector would not invest and so the Scottish Government invested to make sure that there was a charging infrastructure for the highlands and islands. However, I fully accept the general point he is making.
To come back to a point made in the speech by the right hon. Member for Wokingham, Orkney has the second highest rate of EV ownership in the UK, but that is hardly a surprise, as Orkney has the highest number of public EV chargers per capita in the UK outside London—this is four times the English rate outside of London. The lesson is clear: give drivers confidence in the charging network, combined with incentives, and people will switch to EVs. We still have a long way to go. In Norway, 20% of all cars on the road and 80% of all new cars are EVs. That is where we could be; in fact, that is where we should be.
Alexander Dennis Limited is a world leader in bus manufacturing and one of Scotland’s key manufacturers and exporters of high-quality products around the world. Just this year, its Enviro200AV electric fleet was used as the vehicle of choice for the autonomous bus service across the iconic Forth Road bridge. As diesel and petrol buses are phased out and replaced with zero emission vehicles—at least, that should be the plan—ADL is innovating with new electric battery technology that will ultimately benefit the environment and transport networks. However, that requires UK Government support and, so far, their record on buses leaves much to be desired.
There have been 558 zero emission buses ordered in Scotland through the Scottish Government’s ScotZEB and SULEBS—the Scottish zero emission bus challenge fund and Scottish ultra-low emission bus scheme—which is the equivalent of around 5,600 buses in England. Let us bear in mind that the previous Prime Minister’s target was 4,000 in England and that the vast majority of the zero emission buses ordered in Scotland are actually on the road. The figures equate to 10.1 buses per 100,000 people, compared with just 0.94 per 100,000 delivered through equivalent schemes in England, outside London. That is an extraordinary gulf in both ambition and delivery.
John Redwood
Does the hon. Gentleman have any thoughts on how the Government should go about replacing all the lost petrol and diesel taxes if electric vehicles take off?
Gavin Newlands
I am not sure I heard the right hon. Gentleman’s question correctly. Would he mind repeating it?
John Redwood
My point is that if we achieve a big switch to electric cars, the United Kingdom will lose a huge amount of petrol and diesel tax. How should we replace that lost tax revenue?
Gavin Newlands
That is a very astute intervention. I did not pick up that he said the word “tax”, so apologies for asking him to repeat the question. It is a fair point. I am a member of the Transport Committee and we worked on a report about that a while back. The elephant in the room is that we will have to look at something to replace the current form of taxation. The SNP does not have a policy on whether that is road pricing or whatever, but we have to have that conversation and we have to have it now. We all know that revenue at the Treasury is already an issue, and will become an ever-increasing issue every year, so we have to have that debate sooner rather than later. I rather suspect we will not hear much about it before the election, but after the election that debate will have to begin in earnest.
Of course, in an independent Scotland we would have control of the same fiscal and tax incentives that have encouraged those huge levels of electric vehicle uptake in countries such as Norway. The Department for Transport’s poor record on EV charging is a glaring obstacle on our path to decarbonisation. When compared to some of our European counterparts, the deficiencies in our charging network are stark. We must acknowledge that reliable and widespread EV charging infrastructure is essential to encourage the adoption of electric vehicles and reduce carbon emissions from the transport sector.
Scotland’s approach to rapid EV charging infrastructure is an example of what can be achieved. The SNP Scottish Government have made huge strides in expanding the EV charging infrastructure, with one hand tied behind their back. The network has grown from 55 charge points in 2013 to over 2,500 charge points in 2023. In fact, the latest figures, published in July by the DFT, show Scotland has 72.7 chargers per 100,000 people, which is around 40% more per head than English regions outside London, and 19.2 rapid chargers per head, which is nearly double London’s figure of 10.7.
The lack of rapid charging infrastructure in many English regions, and much of Northern Ireland, makes charging a postcode lottery and hampers the transition to EVs, leaving residents without reliable options for charging their cars That imbalance is not only detrimental to our environmental goals, but exacerbates regional disparities. One would think addressing those imbalances would be a priority for a Government who have been talking about levelling up for quite some time.
The challenges facing the industry are multifaceted and require immediate attention and action. Brexit’s disruptive influence, unresponsive Government policy and the internal strife within the Tory party are hindering our efforts to tackle climate change and transition to a sustainable future.
The Scottish Government have led the way on transport decarbonisation, from the EV incentives and charging infrastructure I have talked about and decarbonising our railways at twice the pace of the UK Government, to many times more electric buses per head, funded, bought and actually on the road, those 21 and under travelling free on those same buses, and the gulf—the chasm—in investment in active travel. We have shown what we can do despite the dead hand of Westminster, so just imagine what we can do when that hand is removed by independence.
Mark Pawsey (Rugby) (Con)
It is a great pleasure to take part in this debate on the UK automotive industry because I grew up in a village just outside the traditional heart of UK car manufacturing. One of my earliest memories, as I walked to primary school in the mornings, is workers returning home from the night shift at one of the many car factories that existed in Coventry at that time.
I am very much aware of the heritage of the automobile industry in my local area. In fact, we have two excellent local museums that display historic British cars: Coventry Transport Museum, in Coventry city centre, which includes Queen Mary’s 1935 Daimler and the iconic Coventry-built 1975 Jaguar E-Type, and the British Motor Museum, in Gaydon, where there are over 400 classic British cars from major manufacturers such as Austin, Morris, Hillman and Triumph.
Over my lifetime, I have seen huge change in the origin of the cars on our roads. In my early years, they were mostly domestically manufactured. In the 1960s, I looked out for European cars, such as the Volkswagen Beetle, and then in the 1970s we saw the introduction of Japanese cars, such as the reliable, small Datsuns. In recent years, the majority of cars on our roads have been manufactured outside the UK.
However, it is two-way traffic. While the proportion of imports has risen, so has the proportion of our exports, as the automotive market has become international rather than national or even continental. Now some 80% of our production is exported, generating £77 billion in trade, as buyers across the world recognise the kudos of UK brands such as Land Rover, Range Rover, Jaguar and Mini. At the same time, overseas-based manufacturers, seeing the opportunities provided by the UK’s membership of the European single market, chose to manufacture their vehicles in Sunderland, Derbyshire and Swindon and, more recently, there has been investment in Ellesmere Port, Oxford and south Wales.
I have raised the issue of heritage and the impact of personal ownership of automotives, as cars are not just another manufactured product. For most people, a car is the second most expensive item they will ever acquire and there are few other items where there is such an emotive personal connection. I do not know many people who could tell me what brand of fridge or washing machine they or their parents owned, but almost all will know what brand of car they drive and how they identify with it. We need to generate the maximum impact from our iconic brands.
There are not just emotional reasons for supporting UK manufacture; there are hard-nosed commercial ones as well, because automotive manufacture provides highly-paid skilled jobs. There are 160,000 jobs in the manufacture of automobiles, which is 0.6% of the UK total. That is even more significant in the west midlands, where 2.2% of all employees work in automotives, including many in my constituency of Rugby. A large number of employees work at the London Electric Vehicle Company at Ansty Park, in my constituency, and at Jaguar Land Rover at Gaydon, and many more work in the supply chain, such as at Automotive Insulations on Central Park industrial estate in Rugby and Lenoch Engineering on Somers Road.
In 2022, the manufacturing of vehicles and parts contributed £13.3 billion to the UK economy—it was 0.6% of UK total output.
Jim Shannon
When it comes to telling good news stories—it is always good to tell them in this Chamber—Wrightbus in Ballymena would be one, encouraged by this Government and this Minister. One thousand jobs were created in Ballymena, with those buses being sold all over the United Kingdom but also across the world. Therefore, when there are good news stories to tell, let us tell them.
Mark Pawsey
I agree wholeheartedly. It is great to see Wrightbus’s product on the streets in London.
Although important and significant, the sector has seen decline, particularly in the number of vehicles produced. We peaked at 1.5 million units in 2015; that dropped to 775,000. The Society of Motor Manufacturers and Traders is projecting 860,000 units this year and 1 million by 2028—still lower than the peak years, but we generally produce higher-value cars, which is a key point to remember. The challenge for us is to maintain our volumes as the sector undergoes massive change. That arises from the worldwide move to electrically powered vehicles as a consequence of the imperative to reduce CO2 emissions.
I still sit on the Business and Trade Committee. In October 2018, we produced a report on the sector, decarbonisation and the introduction of electric vehicles. I had to reread that report to remind myself that it was almost five years ago. We looked at the opportunities that would present themselves as we effected the transition from internal combustion engine-powered cars. Many of the issues that we considered five years ago are still relevant, but in other areas we have made progress. In August, almost four in 10 new cars that were sold in the UK had some form of electric power, with 20% being purely battery electric, 7.7% plug-in hybrids and 6.8% hybrid, in a market that grew by 24.4% over the previous years.
My right hon. Friend the Member for Wokingham (John Redwood) spoke about the role of the consumer. Most car drivers know that electric vehicles are coming. Most people will know someone who drives one, or who speaks enthusiastically about it and is preparing for that change. Most people by now have already been driven in an electric vehicle and, often, that will be an electric London taxi, manufactured in my constituency. On that pathway, the London Electric Vehicle Company has a pioneering role in the sector. In many cases, the move to electric will be championed by the cabbie, because every cabbie who drives an electric vehicle will speak very highly of it, compared with the diesel alternative. However, there remain those who are not convinced by the need to decarbonise or to move to electric vehicles as the solution, and there will also be people who do not support the ambition to get to net zero by 2050.
Gavin Newlands
Does the hon. Member accept that there is another cohort of people, who are in fact the majority of our constituents, who may like to move to an electric vehicle, but simply cannot afford to do so?
Mark Pawsey
The hon. Gentleman makes a good point and I will make some remarks on that issue in just a second.
The view about the need to support our move to net zero, and the steps that we need to take, are very much mainstream. The environment is still a top issue, and a rising issue among people in the country more generally. It is in the top five when people are asked about issues facing the world. Climate change is consistently there above poverty, war and migration. Therefore, there is an increasing acceptance of the need for change, but the question is over the pace of change. Back in 2017, our date for ending the sale of conventional petrol and diesel-powered vehicles was 2040. In the BEIS Committee report, we called for all new cars and vans to be truly zero emission by 2032, bringing the target forward eight years. As a Member of Parliament with an interest in UK auto-manufacturing and close to businesses that were involved in it, at the time we prepared the report five years ago, I was concerned that bringing the target forward was too ambitious. I was really bothered that it would put our UK-based manufacturers at a disadvantage because I believed they would struggle to electrify the UK-manufactured heavier and larger cars. However, it soon became clear that manufacturers such as Jaguar Land Rover were willing to move faster, with Jaguar very soon to become an all-electric brand. We now have the date set at 2030.
Having set that date, and with the good news that we have had recently of BMW’s investment in the Mini plant at Oxford, and the manufacture of all electric products at Ellesmere Port, it is vital that the Government stick to the 2030 date. There are voices making the case for relaxation, but Ministers and the Government should stand firm because what industry needs is some certainty.
To take up the point of the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), I accept that there is a case about the high cost of electric vehicles, compared with those powered by an internal combustion engine. In many cases, the new vehicle is something in the order of £10,000 more expensive on a like-for-like basis. Interestingly, many manufacturers— I have in mind Volkswagen—are bringing out new models, rather than electrifying the existing model range, to avoid a direct comparison. Of course, the higher purchase price can be offset by lower running costs. The electricity costs less than petrol or diesel where the price is inflated by the addition of fuel duty. There will be lower servicing costs on the electric vehicle as a consequence of their having fewer moving parts. However, I accept that, for some people, the higher cost is an obstacle.
As we have heard, some countries are further down the road in the manufacturing of EVs, with a range of new models ready to come into the UK. I have in mind China, which, according to many industry watchers, has up to 10 new brands to launch in the UK by the end of the decade. Although they will be less expensive than UK or European-produced products, they will not be as attractive to the consumer because they will not possess the brand and heritage, which is a big part of the value. UK manufacturers will have to take on this competition and, in many cases, that will mean, as they already are, focusing on higher-quality, more upmarket models. That means that, when we look at the performance in the UK, it will be as important to focus on revenue derived from sales as on units sold.
John Redwood
The danger is that China will try to acquire some of those brand attributes. After all, China owns MG, does it not?
Mark Pawsey
I accept that point, but Chinese manufacturers are intending to bring to the UK a load of brands that are anonymous and bland and they will not have the same attractiveness to the consumer.
On the incentives to acquire an electric vehicle, in recent years, there has been a cash grant to offset the extra cost of an EV. That now stands, I think, at £1,500 towards a vehicle costing less than £32,000. One way the Government could make a change and provide a reason for many private buyers to buy EVs is to level the playing field between private buyers and company car users. We have already heard that company drivers benefit from favourable benefit-in-kind rates, which means that they can save hundreds of pounds each month if they choose an EV over an internal combustion engine. One reason that employers are keen to encourage that is that they make savings on employers’ national insurance contributions. That is why many of the EVs on our roads are company cars. An increasing number of companies are also offering salary sacrifice schemes as a method of getting staff to switch to an EV. It would be beneficial if the parliamentary authorities were to launch such a programme in Parliament as a way of getting MPs and staff here to consider making the change.
On electrical vehicle charging, in our Select Committee report, we spent a lot of time considering charging infrastructure. We know that, in addition to the higher capital cost, range anxiety is a key reason drivers will not switch. Frankly, I hope the Minister will accept that the picture here is less rosy, with public charging in particular failing to keep pace with increasing numbers of electric vehicles.
I got a sense of the challenges when the most recent motorway services opened at junction 1 of the M6 at Rugby in 2021. At one point, because of the lack of power infrastructure, it looked as though the site would open with only two charge points. It was a real challenge to get enough power but, fortunately, good work by the site operator and the power network enabled 24 charge points to be available at the opening. Thanks to additional provision since 2021, there are now 40 charge points at junction 1 of the M6 at Rugby. It is a great place for people to stop in the middle of a long journey across England.
Too often, chargers are busy or are not working. I happened to notice a letter in The Times today from a driver of an electric vehicle, who recounts that he restricts his round trips to his battery’s limit of 240 miles and takes public transport for longer journeys. In fact, he questions—perhaps with tongue in cheek—whether that is the Government’s intentional strategy. Clearly we will not achieve the transition we need if every electric vehicle has that issue.
I appeal to the Minister to intervene with my local authority. Warwickshire County Council is providing public charge points but is allowing anybody to park in front of them for as long as they like, so someone who has identified a vacant charger via the app may get to a site and find a diesel internal combustion engine-powered vehicle occupying it. That seems absolutely crazy. I ask the Minister to put pressure on local authorities to ensure that parking in front of public EV chargers is available only to electric vehicles, and that they move off once they have finished charging.
A further issue for many EV drivers is that charging at a public site has a higher cost than charging at home. I suspect most EV drivers expect to pay more for using the facility and for charging faster, but I do not know how many realise that they are paying 20% VAT, compared with just 5% at home. That is why I supported the campaign by the motoring journalist Quentin Willson to reform VAT and equalise the charge.
We spend a lot of time talking about battery manufacture; in fact, the Business and Trade Committee is conducting an inquiry into it. The conventional thinking is that because a battery represents 40% of the value and weight of an electric vehicle, assembly will migrate close to where the batteries are manufactured. West midlands MPs, including me, have been calling for the development of a gigafactory at the Coventry airport site, adjacent to the traditional heart of UK automotive manufacture. I very much welcome the investment coming to Somerset from Tata Sons, with 40 GW of capability, but it is well accepted that we need 100 GW to keep business operating at the same level. To achieve that, we will need one more gigafactory, or maybe two. I very much hope that that will happen in the midlands, at the Coventry airport site.
Five years on from our Select Committee report, automotive remains an important sector and a major contributor to the UK economy. The transition to EVs presents real opportunities for manufacturers, the supply chain and the associated sectors. The one thing I know from my business career is that businesses need certainty. Having embarked on change for all the right reasons, the Government must maintain their course and create the climate for further growth in future years.
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.
Bill Esterson (Sefton Central) (Lab)
Over the last few months, I have—high vis and hard hat at the ready—been blown away by the possibilities in our automotive industry, but I have also felt the force of the headwinds facing the sector, including EU rules of origin, high electricity prices in manufacturing, the slow roll-out of EV charge points, the shortage of gigafactory capacity, delays to the zero-emission vehicle mandate, and, of course, the continuing fallout from the way in which the Conservatives crashed the economy this time last year.
The fact is that it is only through a partnership with Government that our vehicle manufacturers can achieve lasting success in a world where new technologies offer opportunity, and competition from new participants such as China is more of a challenge than ever. That is what other countries are doing—other countries that are ahead of us in the low-carbon transport transition race.
I mentioned my recent visits. I saw the pride of the Stellantis workers at Ellesmere Port, where they produce electric vans for Peugeot, Citroën and Fiat, as well as for Vauxhall, and where they want to expand production to be able to export, as they told my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) and me just a few weeks ago. I saw the ingenuity on display at the Jaguar Land Rover research and development facility at Gaydon, and JLR’s “Reimagine” project and commitment to all electric across a number of its brands. Then there is ULEMCo in my constituency—please look it up—which has pioneered the use of hydrogen as a drop-in fuel to existing internal combustion engines to cut emissions while full hydrogen options for combustion and fuel cells are being developed.
Those, and many more, are examples of the amazing potential in this country. However, they are all examples in which uncertainty must be addressed to ensure that our automotive industry can thrive. The honest truth is that we are in danger of squandering the advantages that we have in vehicle manufacturing. UK motor vehicle production levels have fallen by 37% since the Conservatives came to office in 2010—one of the largest falls in vehicle production of any country. Eight in every 10 cars produced in the UK are exported, yet exports of cars manufactured in the UK fell by 14% in 2022. The Faraday Institute estimates that the UK will need 200 GWh of gigafactory supply by 2040. Other countries are on track, but we are off the pace. The news of a gigafactory from JLR is, of course, very welcome, but it does not address the demand from the rest of the industry.
We still have the cautionary tale of the failure at Britishvolt as a reminder of the precarious nature of gigafactory development. The problem of the lack of gigafactory capacity is repeated with EV charge points: the Government target of 300,000 charge points is set to be missed by at least a decade. Meanwhile, parking bays for vans are often inaccessible at charge points. The UK has no equivalent to the plans in Germany for dedicated commercial vehicle charging every 60 km to 100 km. Speaking of commercial vehicles, where are the plans for hydrogen refuelling for larger vehicles that will use hydrogen combustion or fuel-cell technology?
Reliance on imports of batteries is directly linked to the question of local content and how UK-produced vehicles will be able to compete in export markets. From next year, a 10% tariff will apply to cars and 22% to vans when rules of origin are exceeded. That will, during a cost of living crisis, also push up prices for consumers who buy imported vehicles. Stellantis wants to expand the electric van production that it showed my hon. Friend and me. It wants to employ more workers and export its new pride and joy to the EU, but to do so, it needs to qualify for local content rules, which will not be ready in time for the looming cliff-edge in a few months’ time. Stellantis, Ford and JLR have all called for a delay in the implementation of new rules of origin to give them time to comply.
The Minister of State, Department for Transport, the right hon. Member for Hereford and South Herefordshire (Jesse Norman), who will wind up, said that he could not comment on negotiations. Indeed, the Minister for Industry and Economic Security, the hon. Member for Wealden (Ms Ghani), who introduced the debate, said the same thing. But industry is not asking Ministers for a running commentary; it is asking them to say that their objective is to support the request and ensure that it can continue to compete in its biggest export market.
Then, there is the ZEV mandate. The Government said that they would introduce the mandate by January next year. Decisions are taken many years in advance by investors, so regulatory certainty is critical to inform decision making. Motorists need to know whether they should buy another petrol or diesel car, or go hybrid or full electric. Is 2030 still the date for the end of the new petrol and diesel car production, as the hon. Member for Rugby (Mark Pawsey) quite rightly mentioned in his speech? I would like to hear about that from the Minister. Companies are having to second guess the Government, as are consumers.
The lack of a plan for ZEV, for rules of origin, for charge points and for commercial vehicles is an example of the indecision that characterises this Government. It does not have to be this way. Our long-term approach, working as partners with businesses and unions through our industrial strategy, will give investors and consumers the certainty that they want. That is how our competitors operate, and it is how this country needs to work, too. Our clean energy plans and our green prosperity plan will deliver the cheap, clean energy that will help to lower the cost of motoring and unlock the capacity for electric vehicle charging. Our support for hydrogen is also essential for the transition to low carbon for road vehicles that need an alternative to electricity. Labour’s new gigafactories will allow the UK’s automotive industry to source components locally, avoiding tariffs for exports to the EU by addressing the challenge of rules of origin. And we will work with the EU on a plan that avoids the cliff edge of the Prime Minister’s damaging export tariffs, which, with just 100 days to go, are looming large. We will also address the skills gap and the decline in apprenticeship starts—a decline of 170,000 a year since 2017—in part by moving to a growth and skills levy.
Labour’s plan will deliver precisely because we have drawn it up in partnership with the sector.
Bill Esterson
I will not, because Madam Deputy Speaker has, quite correctly, been very strict in the time she has allocated.
Labour’s plan will lead to the creation of 80,000 jobs in our industrial heartlands. Our plan will power 2 million electric vehicles and add £30 billion to the UK’s economy. We will accelerate the roll-out of charging points and give motorists the confidence to make the switch. We will have binding targets for electric vehicle chargers that will, like carbon budgets, be binding on the Government. We will ensure that local areas have the support and investment that they need.
Labour’s plans for energy generation are inextricably linked to the transition to low-carbon road transport. Our plan to make the UK a clean-energy superpower by 2030, with net-zero carbon electricity, will deliver capacity and lower energy costs for UK manufacturing. Those costs, including electricity costs, which are 62% higher in the UK than in Germany, are a barrier to our competitiveness. The motor industry and motorists are being let down by this Government. They are being let down on the ZEV mandate; on rules of origin and local content; on the slow progress of gigafactories and EV charge points; and on energy prices. Above all, they have been let down because of the damage done by 13 years of Conservative mismanagement of the economy, which culminated in last year’s disastrous mini-Budget. All of that has led to the further let-down of high interest rates, which are higher than in competitor countries.
The industry wants the roadblocks and the let-downs to be removed. I will leave the last word to Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, who just this morning wrote about the uncertainty around the ZEV mandate, charge points and gigafactory capacity. He said:
“A comprehensive package of measures would encourage households across the UK to go electric now, boosting an industry slowly recovering from the pandemic and delivering benefits for the Exchequer, society and the global environment.”
I could not agree more. With Labour’s industrial strategy, Labour’s green prosperity plan and Labour’s partnership with industry, our automotive sector will be turbocharged to deliver success.
The Minister of State, Department for Transport (Jesse Norman)
What an excellent debate it has been! I have been very interested to follow the contributions that have been made—very welcome they are too. You may recall, Madam Deputy Speaker, that this debate follows an urgent question that was tabled by the Labour party some months ago regarding the state of the automotive sector, at which Labour Members were mortified to discover that vast numbers of investments were already under way. It is unfortunate that the hon. Member for Sefton Central (Bill Esterson) talks about being let down. If this country, this economy and this industry are feeling let down, why is it that there has been this astonishing succession of investments? That speaks not to people feeling let down, but to confidence and investment in the future.
We celebrate BMW Group’s announcement that it will invest £600 million in the production of two all-new electric Mini models, supporting the full transition to electric vehicle production by 2030. We welcome that, as do both Members of Parliament for Oxford, the hon. Member for Oxford West and Abingdon (Layla Moran) and the hon. Member for Oxford East (Anneliese Dodds). We are very pleased to have their support, as well as that of Members across this House. We welcome the fantastic investment that Stellantis has made in Ellesmere Port, as has the hon. Member for Ellesmere Port and Neston (Justin Madders), although he could not avoid being gloomy about that aspect of the tremendous investment that is taking place. That makes the plant the first all-EV facility in the UK, and one of the first in Europe.
As we heard the determination to be gloomy from the other side of the House, we were noticing at the same time the £4 billion-worth of new gigafactory investment from Tata Group; Nissan and Envision’s announcement a couple of years ago of £1 billion to create an EV manufacturing hub in Sunderland; the £227 million invested in Halewood; Bentley committing £2.5 billion to make the transition to zero-emission vehicles at its Crewe plant; and JLR’s investment of £15 billion over five years into its industrial footprint towards electrification. If everything is as disastrous as the Opposition suggest, how can there be this constant succession of new private-sector investments? That is the question. The truth of the matter is that over the past two years, the UK’s automotive sector has been boosted by over £6 billion-worth of business investment that will drive the transition to zero-emission vehicles, with funding for manufacturing and crucial components as well. That investment reflects confidence.
We know that that transition is important. Cars and vans account for a huge proportion of domestic UK transport emissions, and it is therefore important to address that. Over £2 billion has been spent to support the transition, and the Government are continuing to invest. There are now more than 1.2 million plug-in vehicles in the UK—a 45% increase over the past year. Again, that does not speak to decline; it speaks to rapid growth and acceleration. Some 58% of those vehicles are battery electric vehicles; in August 2023, 20% of new cars in the UK were battery electric vehicles, so again, that is a sign of confidence and growth, and rightly so. That puts the UK’s automotive industry at the forefront of new low-carbon technology, creating thousands of new jobs and providing certainty among manufacturers and infrastructure investors. Some 65% of vehicle manufacturers in the UK car market have already committed to making the transition to zero-emission cars by 2030, and all major manufacturers have committed to selling 100% zero-emission vehicles by 2035.
Several Members have raised the question of EV infra- structure and charging roll-out. It is understood on all sides of this House that the roll-out of electric vehicles needs to be supported by a robust and widespread public charging network, and that network continues to grow. To date, the Government and the industry have supported the installation of over 48,000 publicly available charging devices—again, an increase of 43% over the past year—which includes nearly 9,000 rapid devices. My hon. Friend the Member for Rugby (Mark Pawsey) rightly highlighted service areas, and I was delighted to hear his excellent description of the very rapid scale-up of the motorway service area at junction 1 of the M6; that was a very interesting and important intervention. He will know that over 96% of service areas in England now have charging available, and there are hundreds of chargers across the motorway service area network. Of course, a lot of that comes through private investment. The Chancellor recently opened the UK’s largest electric vehicle infrastructure charging site to date in Birmingham, which includes 180 charging devices.
My hon. Friend the Member for Meriden (Saqib Bhatti) and the hon. Member for Bath (Wera Hobhouse) both raised the question of standards, and rightly so. As they will know, the Government are investing £381 million through the local electric vehicle infrastructure fund to deliver tens of thousands of local charge points, and the rapid charging fund will do the same thing to future-proof electrical capacity at strategic locations. Alongside that, we have laid consumer regulations that will ensure that pricing information and payment methods are simplified, that charge points are reliable and that public charge point data is freely available, addressing many of the issues that have rightly been raised about standards, interconnection and transparency. The Government worked with the national disability charity Motability and the British Standards Institution in order to develop those standards, which has made an important difference to their quality.
We must not think just about cars, or even just about cars and vans, but about heavy goods vehicles as well. It is well understood that the UK is seeking to make a transition to zero emission in this area as well, as part of our wider ambition. To support that, there is an HGV and infrastructure demonstrators project that will showcase zero-emission hydrogen fuel cell and battery electric HGV technology at scale in UK fleets, and the Government have already tested such vehicles. Those demonstrators build on the £20 million investment made in 2021-22. In a slightly different context, I was absolutely delighted to welcome the first JCB hydrogen digger, a magnificent piece of kit that is emblematic of the innovation we have seen in the sector.
It is also important for me to mention, because we have touched on it, the work we are doing in the area of connected and automated mobility. Some £600 million of joint public and private investment has been placed in that sector since 2015.
John Redwood
At the moment, if a new EV is added to the charging system, it will be a gas power station that has to fire it up, so it is not a net zero product. When will we be in a position to have enough renewable power so that, if an electric car is added, it will be recharged with renewable power?
Jesse Norman
An economist of my right hon. Friend’s distinction will know that it is futile to predict the activity of private markets, because they so often move faster than we would imagine. A classic example of that is the way in which electrification has moved up the range and weight curves over the past few years. It is certainly true that at the moment, electric vehicles rely on fossil fuels for part of their charge, meaning that they are less green than they will be when those fossil fuels are removed from our electrical charging system. Nevertheless, those vehicles remain significantly lower-emission over their life cycle than equivalent petrol and diesel vehicles, including the production and disposal of batteries.
Capacity-building projects for important areas of our connected and autonomous vehicle supply chain are already starting to take place. This country remains one of the first to explore the business case for connected and autonomous mobility as a mass-transit solution. Connected and autonomous mobility will be the future; it will be an electric future, a zero-emission future, and one that is powered by the investments and leadership being provided now, with the private sector, by this Government.
Question put and agreed to.
Resolved,
That this House has considered the UK automotive industry.
Madam Deputy Speaker (Dame Eleanor Laing)
Yes, it would be impossible to manage an electric car without Moto Rugby.