09:30 Mr Peter Bone (in the Chair)

The headwinds are strong and many. As the industry meets the challenges of transitioning to cleaner fuels and to a super-low-carbon future, it has been disrupted by the uncertainty of Brexit and a Government policy that penalises the cleaner diesel-powered vehicles. It is one of the great paradoxes in business that, in seeking to improve air quality, the Government have managed the reverse the progress achieved over many years to reduce carbon dioxide emissions.

Related to all of that is the importance of type approvals, a much overlooked area that can add significant cost. One engine supplier—I will not mention its name—has estimated that, if we do not have harmonisation with Europe, it will cost between £300,000 and £500,000 per vehicle certification. In fact, the CBI noted that the two areas where convergence with the EU is of the greatest importance are the rules that determine how and by whom vehicles can be approved as safe for the road, and the Vehicle Certification Agency maintaining its ability to approve vehicles for the European market. It also mentioned maintaining pan-European rules on carbon dioxide and other air pollutants to ensure that international targets on clean air and climate change are met.

That brings me to diesel. In the early 2000s, the drive to achieve climate change goals led to the rapid uptake of diesel: from 17% of the total car market, it grew to 50% in just eight years. The manufacturers responded. Ford set up its Dagenham diesel centre, which I think employs 3,000 staff and provides for 50% of all of its global diesel production. Then came the Volkswagen dieselgate scandal and subsequently the demonisation of diesel, which has led to a 33% drop in diesel sales so far this year. Once more, manufacturers have sought to respond where they have seen a lack of leadership, in this case perhaps from policy makers. Ford introduced a diesel scrappage scheme, as certain other manufacturers have done, and since September it has taken 21,000 vehicles off the road. The programme has been so successful that it was extended beyond December, when it was due to close, and is still running.

Today’s diesels are the cleanest yet, having the same nitrous oxide and particulate emissions as petrol and 20% lower CO 2 emissions. To put it into context, it would take at least six of today’s new diesel cars to emit the same nitrous oxides as one vehicle put on the road just two years ago. The focus should therefore be on getting older vehicles off the road, not on penalising customers who wish to buy newer, cleaner diesels. Of course, the swing to petrol means a collective failure to meet our carbon dioxide targets. Hon. Members will know that we are now seeing an uptick in carbon dioxide emissions for the first time in 15 years.

The industry also faces the challenge of transitioning to cleaner fuels and a super-low-carbon future, and that is being disrupted by the uncertainty of Brexit and Government policy that seeks to penalise cleaner diesel-powered vehicles. It is currently one of the great paradoxes that, in seeking to improve air quality, the Government have managed to reverse the progress achieved over many years in reducing carbon dioxide emissions. As Mike Hawes, the chief executive of the SMMT, put it:

“The industry shares Government’s vision of a low-carbon future and is investing to get us there, but we can’t do it overnight; nor can we do it alone. The anti-diesel agenda has set back progress on climate change, while electric vehicle demand remains disappointingly low amid consumer concerns around charging infrastructure availability and affordability.

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10:07 Kirstene Hair (Angus) (Con)

Since 2010, employment has risen by nearly 30%, from 126,000 to 162,000 jobs. To put that in perspective, those involved in automotive construction account for approximately 8.1% of all manufacturing jobs in the UK, and according to recent research by Lloyds bank, there is potential for that figure to rise even further. The UK Government are keen to see similar progress on the environment and engagement with alternative fuels, which is one of the most pressing topics facing car manufacturers. As set out in our manifesto, we want a ban on the sale of new petrol and diesel cars by 2040, with the majority of cars and vans on the road in 2050 producing zero emissions. Although that is a considerable step, that commitment does not mean that we are turning our back on existing firms or on what has been achieved in the past. Instead, we wish to work with those organisations and guide them towards new and emerging technological avenues. I am sure all Members will agree on the vital need for such a change for the sake of the environment, but it would be wrong to present it as instantaneous.

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10:16 Sharon Hodgson (Labour)

The UK is in the grip of an air pollution crisis—the Environment Secretary was talking about it this morning—with pollutants responsible for 40,000 premature deaths a year in the UK. I see two problems with the target, however. First, it is not ambitious enough to deal with the environmental issue with sufficient urgency or to ensure that the UK maintains its leadership on electric vehicles. Research shows that bringing the target forward by 10 years could nearly halve UK oil imports, support a larger number of jobs overall in the automotive sector and reduce total cumulative carbon dioxide emissions in a shorter period. Is the Minister’s Department currently considering bringing the target forward?

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10:45 The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)

“Diesel cars have played an important part in reducing CO2 emissions from UK road transport. They can still play a valuable role in further reducing CO2 emissions during the transition to zero emission vehicles.”

We have stated that we will end the sale of new conventional petrol and diesel cars and vans by 2040. That is a general European-wide policy. But we will shortly publish the Government’s “Road to Zero” strategy, which will set out the gradual steps that we will take over the coming years to deliver our mission. The mission is for every car and van in the UK to be effectively zero emission by 2040. I think that will prove to be significantly beneficial to the UK car manufacturing industry.

Consumer incentives will have to be part of the package that we hope will incentivise the shift towards zero emissions. The Government have scaled back both the plug-in car grant and the grant available for the home charging of electric vehicles. Does that not send out a confused signal, if we are trying to encourage people to make that shift?

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10:58 Matt Western (Labour)

The industry has been extremely competitive, but it is being made uncompetitive as a result of contradictory policies from the Government, particularly the decisions of the Chancellor to further penalise a product that is critical to an orderly transition to a zero-carbon future, while achieving the international climate change obligations and reducing CO2. I simply urge the Minister to revisit both those areas urgently. Whether it is diesel or the transition, we are hampering and damaging the most crucial manufacturing industry in this country.

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