Automotive Manufacturing: Employment

John Hayes Excerpts

Wednesday 7th May 2025 Westminster Hall

[Antonia Bance (Tipton and Wednesbury) (Lab)]

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

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

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

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

We know there is more to do to increase the uptake of electric vehicles, whether that be on consumer demand or the charging infrastructure we need. More broadly, I hope that the industrial strategy, when we see it, takes action on the issues that have held back advanced manufacturing: skills, access to finance—particularly in the supply chain and for smaller manufacturers—and energy costs. I was absolutely appalled to hear Nissan tell the Business and Trade Committee two weeks ago that its plant in Sunderland is its most expensive in the world, because of the energy costs. It will be great to hear the Industry Minister’s thoughts ahead of the industrial strategy, although I know she will have more to say in the coming months.

Let me turn now to tariffs. This morning, I talked to Richard Parker, our Mayor of the West Midlands, and his team. They have produced research by Steve Rigby, which my hon. Friend the Member for Wolverhampton North East touched on, showing a £6.2 billion hit to the west midlands economy from the US automotive tariffs if nothing changes—the biggest regional hit in the country. Some 52% of firms in our local manufacturing base are warning about profits because of the tariffs.

JLR alone accounts for 4% of UK goods exports. We need a deal, and soon. I thank the Prime Minister, the Chancellor, the Business Secretary and the Industry Minister for their calm approach to the negotiations. That is right, but we must get a deal; otherwise, that impact will be coming down the road in my constituency and in all our constituencies in terms of jobs and the critical research and development that will help us navigate the transition that we need to electric cars and net zero. When it comes to a deal, fast is better than perfect: that is the message from the west midlands automotive industry to my colleagues in the Government.

I would like to hear from Ministers what options they intend to explore to help the industry, and especially the employment base in the automotive industry supply chain in my constituency, if—God forbid—we get no deal. The Chair of the Business and Trade Committee set out a number of options in a letter to Ministers earlier this week. It would be good to hear what consideration is being given to things such as a reduction in employer costs, help with energy costs, domestic sales subsidies for EVs, an increase in research and development tax credits, and help with cash flow, particularly for the smaller companies in the supply chain, which tell me time and again that they need that.

Then, of course, there is the £2 billion that was allocated in the Budget to the automotive industry’s transition, which we will hear more about in the industrial strategy. It would be good to know whether that can be used to help in the event that there is no deal and there is a prolonged period of tariffs. But that money is necessary for the transition—for research and development, and for moving our workforces to the new industry’s new production techniques and requirements—so it will have to be replaced in time.

My colleagues in Government know how urgent this issue is and have been working at pace to get the deal that our automotive sector needs. They have the support of all of us in this House, and I urge them to continue that work for this vital sector of the UK economy, of which we are so proud.

[Sir John Hayes (in the Chair)]

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

--- Later in debate ---

[Clive Jones]

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

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

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

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

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

What contingency planning is in place to protect UK manufacturers and exporters if President Trump’s damaging tariffs remain in place? What action is being taken to reduce the UK’s industrial energy costs to ensure a level playing field with our global competitors? What is the status of the £200 million that was announced in the autumn Budget for charging infrastructure but is in limbo? What is the status of the rapid charging fund, which has delivered ultra-rapid en-route hubs across the country? Will the UK formally seek to accede to the Pan-Euro-Mediterranean convention to provide manufacturers with a more flexible and reliable origin framework?

[Sir John Hayes (in the Chair)]

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