Vauxhall at Ellesmere Port and Battery Manufacturing Strategy

Tuesday 2nd March 2021

(1 month, 2 weeks ago)

Lords Chamber

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Department for Business, Energy and Industrial Strategy

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Monday 1 March.

“The Government are absolutely committed to ensuring the future of manufacturing at Ellesmere Port and to secure the jobs and livelihoods of the workers at the plant. Since I was appointed Business Secretary last month, I have held a number of meetings with both Vauxhall and its new parent company, Stellantis, to support the company to make a positive investment decision. Only last week, I also held a constructive meeting with the general secretary of Unite, Mr Len McCluskey. Over the coming days and weeks, I, fellow Ministers and officials at BEIS will continue this intensive dialogue with the company.

More widely, the Government are continuing their long-standing programme of support to keep the British automotive sector at the forefront of technology and maintain its competitiveness, building on the work that my right honourable friend did through the automotive sector deal.

It is my priority as Business Secretary to ensure that the UK continues to enjoy the benefits from our transition to ultra-low and zero-emission vehicles by continuing to build an agile, innovative and cost-competitive supply chain, which we need to secure vital international investment. With that in mind, we remain dedicated and absolutely committed to securing UK battery manufacturing. As part of the Prime Minister’s 10-point plan, we have already announced £500 million to support the electrification of vehicles and their supply chains, and other strategically important technologies, through the automotive transformation fund over the next four years. We continue to work with investors through the automotive transformation fund, and to progress plans for manufacturing the batteries that we will need for the next generation of electric vehicles here in the UK.

The Government and industry have jointly committed almost £1.5 billion through the Advanced Propulsion Centre and Faraday battery challenge to support the research, development and manufacture of zero and low-emission technologies. Between 2013 and 2020, the Advanced Propulsion Centre has funded 67 collaborative R&D projects, creating and safeguarding nearly 47,000 jobs, with projected CO2 savings of 244 million tonnes.

I repeat: we are 100% committed to making sure that the UK continues to be one of the best locations in the world for automotive manufacturing, and we are doing all we can to protect and create jobs while securing a competitive future for the sector here in the UK in particular, including at Ellesmere Port.”

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab) [V]
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My Lords, the Ellesmere Port plant is a major employer, and letting it wind down would have devastating consequences, with 1,000 highly skilled jobs lost in the local community. The Government must do all they can to secure the future of the plant, and it is worth reminding ourselves that the automotive sector has had no sectoral support during the pandemic.

To achieve net zero and sustain our automotive industry, we need a plan and action and investment. As such, will the Government bring forward ambitious investment in electric vehicle technology, including the electric battery supply chain, in tomorrow’s Budget—so that manufacturers have the long-term confidence that they need to build new electric models in the UK and so that we can move forward and secure the future of Ellesmere Port as a major automotive producer?

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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I assure the noble Lord that we are doing all that we can to ensure that Ellesmere Port has a bright future. The automotive industry in general is an essential part of the Government’s plans for green growth, levelling up across our country and driving emissions to net zero. As the noble Lord will be aware, as part of the Prime Minister’s 10-point plan, the Government brought forward the phase-out date for new petrol and diesel cars and vans to 2030, and, by 2035, all new cars and vans must be fully zero-emission at the tailpipe.

Lord Fox Portrait Lord Fox (LD)
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My Lords, I am on the executive of the All-Party Parliamentary Motor Group. In his Statement, the Secretary of State boasted that some £1.5 billion of joint funding had gone to the APC and the Faraday battery challenge. To put that into context, that is about a tenth of what the French Government are putting into this sector. The fate of Ellesmere Port will be decided in days, but the Government have had years to get ready for moments like this. Everyone knew and knows that we need significant battery manufacturing capacity in this country. The Faraday challenge has been running for eight years, so what has stopped a battery gigafactory being built already?

Lord Callanan Portrait Lord Callanan (Con)
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Ultimately, of course, these are commercial decisions for the companies involved, but we are working closely with a number of people interested in establishing gigafactories. We have announced £500 million as part of our wider commitment of up to £1 billion to support the electrification of vehicles and their supply chains, including developing gigafactories in the UK.

Baroness Altmann Portrait Baroness Altmann (Con) [V]
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My Lords, I congratulate the Government on their aim to ban sales of new internal combustion engine cars from 2030. What specific plans do they have to invest in the production of electric vehicles and batteries to ensure that the UK remains competitive globally in manufacturing? Does my noble friend see a role in this for regions such as the north-west, where Vauxhall is sited?

Lord Callanan Portrait Lord Callanan (Con)
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I agree with my noble friend that it is very important that we see a future for these industries. As I have said, we are doing all that we can to help—I outlined our financial commitment in my answer to the noble Lord, Lord Fox. I come from the north-east, so I want to see it do well along with the north-west, and I repeat my earlier answer that we are doing all that we can to secure the future of the Ellesmere Port facility.

Baroness Boycott Portrait Baroness Boycott (CB) [V]
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My Lords, like everyone, I welcome the introduction of full electric vehicles, but the Secretary of State said:

“We want to see a circular economy for electric vehicles.”—[Official Report, Commons, 1/3/21; col 33.]

However, he also said, “If we attain that”. Can the Minister give us an assurance that the Government are looking into how this can be achieved? A recent report by the Transport and Environment Committee found that it is eminently feasible to have batteries that are one-fifth lithium and nickel and 65% cobalt, coming from recycled sources, by 2035. Will the Government put some sort of target into legislation as a statement of intent to drive the industry to do just that?

Lord Callanan Portrait Lord Callanan (Con)
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I outlined in previous answers the support that we are giving; we are looking closely at all these matters. I am sure that it is eminently possible to ensure that a circular economy applies to electric vehicles as much as it applies to many other parts of the economy.

Baroness Jones of Moulsecoomb Portrait Baroness Jones of Moulsecoomb (GP)
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Are the Government aware that electric vehicles can only ever be a tiny part of reducing our carbon emissions—and that it would be more effective to stop building new roads and not open new coal mines? If they are worried about jobs, the Government should be starting up thousands of schemes to train people to retrofit insulation in houses and install clean heating systems. Are the Government thinking about this?

Lord Callanan Portrait Lord Callanan (Con)
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I am pleased to tell the noble Baroness that we are already investing millions of pounds in training for green jobs under the Green Homes Grant scheme. We invested about £7 million in a training competition, and there are numerous other government schemes doing precisely what she suggested: the eco scheme, the home upgrade grant, et cetera.

Lord Woodley Portrait Lord Woodley (Lab)
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My Lords, I appreciate the helpful comments that have already been made, but I must ask the Government to leave no stone unturned in keeping this Vauxhall car plant at Ellesmere Port open—it is crucial, as people have said. Finalising an agreement with Stellantis to manufacture not one but potentially two next-generation battery-driven vehicles is crucial, securing, of course, thousands of high-skilled jobs for Ellesmere Port and, indeed, our country. Battery-driven vehicles are the future for this industry, if we are to have any future at all, and I suggest that it would be unforgiveable if the Government missed the opportunity of this investment and of securing these jobs for our country.

Lord Callanan Portrait Lord Callanan (Con)
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I know the noble Lord’s personal commitment to the north-west, and I agree with him about leaving no stone unturned. I assure him that the Government are committed to securing the future of Ellesmere Port. The Business Secretary and his senior officials are engaging frequently with the company to explore ways to ensure that the plant stays open. The noble Lord will understand that, while these discussions are ongoing, I cannot comment further, but we will do all that we can.

Lord Mann Portrait Lord Mann (Non-Afl)
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We have the land and the skilled workforce, and we no longer have the bureaucracy of the European Union restricting state aid to new industries. The Minister talks about the private sector—of course it needs to be there. But should we not be in the lead in the world on electric vehicles, with state money—government money—helping to make sure, as we have done with vaccines, that we are first, not second, third or fourth in this technology? Therefore, should those decisions not be made now?

Lord Callanan Portrait Lord Callanan (Con)
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Those decisions have already been made, and I agree with the noble Lord: it is essential for the future of the industry, and in relation to issues such as rules of origin, that we establish domestic supply chains. I outlined in a previous answer the very substantial investments that the Government are making in this area.

Lord Randall of Uxbridge Portrait Lord Randall of Uxbridge (Con) [V]
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My Lords, I was very pleased to hear my noble friend explaining what Her Majesty’s Government are doing to ensure the future manufacture of electrified vehicles, helping us to meet those net-zero targets. Does he agree that there is a huge opportunity for the manufacture of batteries not just for cars but for larger vehicles, such as buses?

Lord Callanan Portrait Lord Callanan (Con)
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I agree with my noble friend and indeed I would include vans as well. He makes a very good point. Developing a competitive UK electrified supply chain is key to maintaining the success of our automotive industry, which I remind noble Lords is one of the most productive and efficient in the world. Doing this will protect and create thousands of high-quality jobs across the UK.

Lord Austin of Dudley Portrait Lord Austin of Dudley (Non-Afl) [V]
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My Lords, I draw attention to my entry in the register of interests. The electric vehicle revolution can also bring thousands of well-paid jobs to areas such as the West Midlands, but that requires investment in battery technology and mass production. What assessment have the Government made of proposals for a battery plant at Coventry? I commend to the Minister the brilliant work being done in this area by the Warwick Manufacturing Group, where I and many other parliamentarians sit on the voluntary advisory group.

Lord Callanan Portrait Lord Callanan (Con)
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There are a number of good proposals around the country, including from Coventry, for the location of gigafactory investment. Ultimately, of course, the decision will be a commercial matter. Ministers and officials are in close discussion with those developing the Coventry proposals, the Blyth proposals and other factories around the country.

Lord Field of Birkenhead Portrait Lord Field of Birkenhead (CB) [V]
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I thank the Government for their statement. What do the Government need to bring to the table? What does Vauxhall need to bring to the table to ensure that we have in Wirral one of the centres for battery production?

Lord Callanan Portrait Lord Callanan (Con)
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A bid from Coventry, bids from the north-west, a bid from the Wirral as well—we totally understand that. The noble Lord will understand that these are commercial decisions. We are willing to stand behind companies and help them develop their proposals, but there are a number of exciting proposals in different parts of the country. I have outlined the financial support that is available. With regard to the future of Vauxhall, or Stellantis as it now is, we are in discussions with it; my right honourable friend the Secretary of State has had a number of meetings with it, and senior officials are meeting it. Those discussions remain confidential at the moment but we are doing all that we can to assist.

Baroness Fookes Portrait The Deputy Speaker (Baroness Fookes) (Con)
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All supplementary questions have been asked.