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UK Car Industry
17 May 2023
Lead MP
Nusrat Ghani
Debate Type
Ministerial Statement
Tags
EconomyTaxationClimateBusiness & Trade
Other Contributors: 20
At a Glance
Nusrat Ghani raised concerns about uk car industry in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
The automotive industry is a vital part of the UK economy, contributing to levelling up, net zero and advancing global Britain. Despite challenges from COVID and supply chain issues, the sector is recovering. In 2022, Nissan's Qashqai was the best-selling car in the UK, produced in Sunderland. The Government supports international investment in future technologies through initiatives like the Automotive Transformation Fund, with £1.4 billion committed for innovative projects. Significant investments include £1 billion from Nissan and Envision for an electric vehicle manufacturing hub in Sunderland; £100 million from Stellantis for Ellesmere Port; and £380 million from Ford to Halewood for EV components.
Justin Madders
Lab
Ellesmere Port and Bromborough
Question
The warnings from Stellantis are deeply concerning for constituents' livelihoods. Despite efforts to secure electric vehicle production, there is frustration over complacency from the Government. Urgent action is needed: increase UK-manufactured parts, update trading relationships with the EU, and ensure a proper industrial strategy.
Minister reply
The automotive industry employs 166,000 people, with major manufacturers like Jaguar Land Rover, Nissan, Toyota and BMW. The Government supports investments through initiatives like the Automotive Transformation Fund and the Advanced Propulsion Centre. Regular reviews of EU-UK trade agreements are conducted by the Foreign, Commonwealth and Development Office.
Question
A proposed gigafactory at Coventry Airport adjacent to the Battery Innovation Centre is vital for the west midlands in transitioning to electric vehicles. Will the Government provide support?
Minister reply
The proposal is fantastic and supports reliable supply chains. The Minister is keen to support investment and would meet with the MP to discuss further.
Jonathan Reynolds
Lab Co-op
Stalybridge and Hyde
Question
I thank my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) for securing this urgent question on an area of fundamental importance not just to his constituency, but to the prosperity of the whole country. For months now, Labour and industry have been warning the Government that this cliff edge was coming. It is a statement of the blindingly obvious that the lack of battery-making capacity in the UK, combined with changes to the rules of origin, was a car crash waiting to happen. Without domestic batteries, there will be no domestic automotive industry in the UK, yet the Government have no strategy to bring in the investment and infrastructure needed, and the rules of origin just make that even more compelling.
Minister reply
It is good to hear that the Opposition are expecting businesses to make decisions on promises that may or may not come down the line, and on promises of sums of money that have been allocated and reallocated a number of times by the Labour party. Figures from the Society of Motor Manufacturers and Traders show British commercial vehicle production grew by 39% in 2022, with exports surging by 63%. The Government are determined to make the UK the best location for export-led automotive manufacturing through programmes like the Advanced Propulsion Centre, Faraday battery challenge, and 'Driving the electric revolution'.
Question
To secure the future of our vital automotive sector, we need to manufacture batteries in the UK. The industrial strategy established the Faraday challenge to build on our cutting-edge research capability. While the strategy is vital and must be refreshed and continued, it is necessary but not sufficient; we need activism. When Mrs Thatcher lured Nissan and Toyota to this country, she travelled to Japan to make the case for locating here. Does that level of activism exist in the Government, and will the Minister commit to ensuring that we have those investments from companies around the world in the UK?
Minister reply
I believe my right hon. Friend was Secretary of State for Business, Energy and Industrial Strategy when the decision on the Faraday battery challenge was taken. He made sure £211 million of funding was in place to develop efficient batteries. Meetings are constantly taking place with companies based in the UK and overseas at Secretary of State level to ensure that the UK is seen as an attractive place to manufacture cars.
Question
The Minister is sticking her fingers in her ears and burying her head in the sand on this question. The Government were told time and time again about the rules of origin issues, and the car industry seems to be another casualty of the Government’s damaging Brexit. Increasing the uptake of low-emission vehicles is vital to meeting our net zero goals, but the UK’s disastrous trade deals are making the domestic manufacture of those vehicles impossible. Has the Minister made an estimate of how many job losses it would lead to if Stellantis closed its UK factories as a result of Brexit?
Minister reply
I would not expect anything less than a rerun of the conversation on Brexit. Confidence in the UK automotive sector and supply chain means that Stellantis has invested more than £100 million in the Vauxhall plant in Ellesmere Port, transitioning it to become the first mass-market all-electric plant in the UK from 2023. The production of electric units will go up for both private and commercial use.
Question
Many of my constituents work at the Vauxhall Luton van factory, which makes the incredibly successful Vivaro, so this issue really matters to them and to me, and it matters for our industrial future. Will the Minister flesh out in a little more detail the plan to get more battery manufacturing capacity here in the United Kingdom? When will there be announcements?
Minister reply
I thank my hon. Friend for that incredibly sensible question. We have programmes like the automotive transformation fund, Faraday project, and Envision, working with other investors to establish gigafactories in the UK. The integrated review published an updated report on critical minerals to ensure we are not relying on a particular nation but can diversify.
Darren Jones
Lab
Bristol North West
Question
The story overnight came from written submissions to my Committee’s inquiry on the future of battery manufacturing in the UK. The Minister will know two things: that she and her departmental officials are in ongoing negotiations with other car manufacturers in the UK beyond Stellantis, and that all the car companies are raising exactly the same issues and are asking for a step up in activity from the Government and an end-to-end industrial strategy to show that the UK is serious about the future of UK production of electric vehicles.
Minister reply
I am grateful to the Chair of the Select Committee. I was once on his Committee. Overnight, I went through the transcript and some of the submissions to that inquiry, including a submission from Nissan stating: “The UK has strong promise as an EV battery production location due to strong demand, a skilled workforce, and attractive manufacturing sites.” We are working with those in the sector regularly, dealing with challenges such as the Inflation Reduction Act or gigafactories.
Question
Manufacturing and industry in this country are an ecosystem, and when we start to lose chunks of it, that not only devastates communities but affects wider supply-chain businesses. The Minister will know that steel is crucial to car manufacturing. Can she reassure me and my constituents that she is considering those supply-chain businesses and doing everything she can to ensure that we have a level playing field in this country, not just for the steel industry but for manufacturing more widely?
Minister reply
My hon. Friend is once again the lady of steel, raising the topic on behalf of the whole industry across the UK. She will know about our recent work to look at procurement and the whole lifecycle of supply chains, and to ensure that we are doing everything we can in the UK. We have provided billions of pounds-worth of support for energy costs and now there is a huge amount of support for decarbonisation.
Ian Lavery
Lab
Blyth and Ashington
Question
Recharge Industries, the organisation that bought out Britishvolt, is committed to building a gigafactory on the Britishvolt site in Cambois in my constituency. However, there is a huge issue with Northumberland County Council relating to a buyback proposal on the land of the proposed gigafactory. Will the Minister please intervene to facilitate discussions between all parties to ensure that we are not let down again at the site in Cambois, and that Recharge Industries gets every support it needs from the Government to build that gigafactory and bring 9,000 jobs to the north-east?
Minister reply
We are pleased that Britishvolt has been successfully acquired. We know that investment supports high-quality jobs in industries of the future, and we are determined to ensure that the UK remains one of the best locations. I will commit to meeting the hon. Member this week so that he can ensure that the information I am getting from my officials is absolutely correct.
Rachel Hopkins
Lab
Luton South and South Bedfordshire
Question
I am very proud to have the Vauxhall van plant in my constituency. Will she accept an invitation to Luton South to visit the Vauxhall van plant and speak with workers there, and their representatives, to see how Government decisions impact on people’s lives?
Minister reply
We are very much aware of how this impacts on people’s lives. I co-chair the Automotive Council, so I know how incredibly important it is that we are sensitive to the needs of the industry while delivering on our other ambitious targets, including net zero. Of course, if the opportunity arises, I would be more than happy to visit the hon. Member’s manufacturing site when she is available.
Sarah Olney
LD
Richmond Park
Question
In a written answer to me in November last year, the Minister said: “The Government is committed to securing investment into the automotive sector, which will play an important role in levelling up across the UK and driving down emissions to net zero by 2050.” In the light of that, today’s intervention by Stellantis is extremely worrying. If the Government cannot get an agreement to keep the current rules until 2027, what assessment have they made of the effect that the 10% tariff will have on the UK car manufacturing industry?
Minister reply
The hon. Member’s premise is wrong. I can list all the investments that have taken place in the sector, including £100 million from Stellantis in Ellesmere Port, £380 million investment in Halewood, and a £1 billion investment in the north-east hub between Nissan and Envision.
Question
Stellantis’ warning that it might be forced to close its UK factories will be greeted with dread by the large number of my constituents who work in the Vauxhall car plant in Ellesmere Port, where I myself was employed for many decades. The automotive sector now faces an existential threat as a result of the Government’s recklessness in setting such ambitious rules of origin targets, with no clear plan on how they would be delivered. With 800,000 jobs hanging in the balance, can the Minister confirm that the Government are prepared to sober up, get real, and work with the EU to revisit the rules of origin requirements in the trade and co-operation agreement?
Minister reply
Stellantis gave evidence to the Select Committee on a number of issues, and it seems peculiar that just one particular point has been raised. The confidence that the hon. Member can give his constituents is that Stellantis has invested over £100 million in the UK—that is the confidence that employees have as well.
Sharon Hodgson
Lab
Washington and Gateshead South
Question
As the Minister will be aware, Sunderland is home to Nissan—it is in my constituency—and there are thankfully already shovels in the ground for the Envision AESC’s battery gigafactory. The sustainability of other UK manufacturing operations is at massive risk because the Government are incapable of seeing through any strategy. When will the Government renegotiate the trade and co-operation agreement?
Minister reply
The hon. Member is absolutely right: there is a fantastic project with Nissan and Envision that will support 6,200 jobs in that supply chain, with more than 900 new Nissan jobs and 750 new jobs at the Envision gigafactory.
Nia Griffith
Lab
Llanelli
Question
The transition to electric vehicles means not only new battery and engine factories, but significant investment in car component factories such as Gestamp in my constituency. What are the Government going to do to reduce energy costs both now and in the long term, provide a coherent industrial vision and strategy, and real incentives for companies such as Gestamp to invest their new lines here in the UK?
Minister reply
Those are the exact conversations that we have been having with manufacturers in the UK. We are putting together a response collectively for all the manufacturers within the UK. It is important to note all the support we have given to energy-intensive industries, including the energy bill relief scheme and now we have the supercharger coming down the line as well.
Matt Western
Lab
Warwick and Leamington
Question
Never has an industrial strategy been more needed, and never have a Government been found more wanting. We currently have only 2.5 GW of production with Envision. The Chancellor’s speech to the automotive industry last May was brief and disrespectful, affecting international investment as countries like the US, Germany, France, and Spain offer better incentives. I urge the Minister to convene a cross-party meeting with the Automotive Council to address this crisis.
Minister reply
The Government have identified five key growth sectors for the UK including advanced manufacturing, and announced £500 million per year for research and development support. We are addressing supply chain challenges through the Automotive Council and integrated review processes. I will ensure cross-party meetings can occur if requested.
Kerry McCarthy
Lab
Bristol East
Question
The UK has the largest queue to connect to the grid of any European country, hindering car manufacturing industry investment. Grid connectivity issues like National Grid’s delays are deterring companies from setting up new plants here. What conversations is the Minister having with colleagues to resolve these issues?
Minister reply
Conversations are ongoing with DEIS (now part of DESNZ) and National Grid to ensure faster grid access for advanced manufacturing sites, supporting industry needs.
Dave Doogan
SNP
Angus and Perthshire Glens
Question
The Minister should address the lack of conventional traction battery manufacturing capacity in the UK now rather than future exotic technologies. What will be done to attract automotive FDI to Scotland?
Minister reply
Up to £1 billion is committed for R&D and capital investments in strategically important parts of the electric vehicle supply chain, including £620 million already committed. The Faraday battery challenge supports new technology but also skills frameworks ensuring job opportunities spread across the UK.
Andrew Gwynne
Ind
Gorton and Denton
Question
Levelling up requires an industrial strategy matching historical skills to new job opportunities. Oldham Batteries in Tameside closed in 2002, but those skills remain relevant today. How will future job opportunities match existing skills?
Minister reply
The Faraday battery challenge continues with a focus on the national electrification skills framework ensuring these jobs are spread across the UK including regions like Denton and Tameside.
Ruth Cadbury
Lab
Brentford and Isleworth
Question
Inadequate road infrastructure hinders private and commercial EV adoption. Will mandated regional targets be implemented to ensure all parts of the country get necessary charging infrastructure?
Minister reply
I have raised infrastructure needs with a delegation from car firms at the Department for Transport, working closely with stakeholders to accelerate fast-charging point rollouts.
Shadow Comment
Justin Madders
Shadow Comment
The warnings from Stellantis threaten jobs in Ellesmere Port and the wider automotive sector. Despite efforts to secure electric vehicle production, there is frustration over complacency from the Government. Urgent action is needed to increase UK-manufactured parts and update trading relationships with the EU to reflect supply chain difficulties. The US and EU are investing heavily, leaving the UK behind. Without a proper industrial strategy and updated trade agreements, the car industry risks decline.
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