12:50 Jonathan Reynolds (Labour)

I agree with part of what the hon. Gentleman has said. I agree about the whole-system analysis: many parts of the decarbonisation journey that industry will need to take on will be a much bigger question than simply unplugging one form of old fossil fuel technology and plugging in another. For instance, the steel industry will have to think about scrap if it is to make the conversion to electric arc furnaces; and if we are to move towards synthetic fuels, we will clearly have to look at where the feed stocks are coming from.

However, one of the most defining features of the past 13 years—I say this without any kind of partisanship—has been a series of very ambitious targets from this Government in areas that relate to decarbonisation, but with no real means to deliver them. That target is then pulled away, and confidence in the British state to decarbonise falls apart. I am thinking particularly about the famous “cut the green crap” comments from the former Prime Minister, David Cameron, regarding home insulation. When we talk about changing existing Government policy, we should not underestimate just how little confidence the international business community has in this Government’s promises at times. Broadly, the approach has been very ambitious targets but with no means to actually deliver them, which undermines the case.

My hon. Friend is making a very effective speech. As he is talking about targets, will he come on to the roll-out of charging points? My constituency has three motorways in it and incredibly high levels of pollution. We need to remove all the barriers, both to net zero and to reducing that pollution. Does my hon. Friend agree that constituencies in the north such as mine need that situation addressed? It is shameful that, as I understand it, more chargers were installed in Westminster this year than across the whole of the north of England. We in the north have those issues of pollution, and we need to move faster in addressing them. My hon. Friend may be planning to come on to that point, but it is an important one.

We know that a breakthrough is needed, and we would use our plans to make Brexit work to ensure that the rules of origin work for British manufacturers. We cannot achieve a compromise without working with our partners in Europe, and I believe that only Labour can be that good-faith partner. Our plan to invest in battery capacity, alongside compromises on the rules of origin, is the sensible way forward to meet our climate objectives and trade obligations and retain our industrial base.

We will make the UK a clean energy superpower by 2030, with net zero carbon electricity lowering costs for the UK car industry by no longer leaving UK industry prone to the volatility of international gas prices, alongside better grid connections and planning reform to ensure that “made in Britain” does not become a thing of the past. That is the prospectus for action we need. Right now, this country needs some optimism. The mantra of this Government—that this is as good as it gets—is as depressing as it is wrong.

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13:12 Nus Ghani (Conservative)

This is a positive news story, and any opportunity we have to speak about the automotive sector should be positive, not negative or all about political point scoring. This is a serious topic and a serious industry. I know the hon. Gentleman is keen to be very ideological within the Westminster bubble, but I would suggest he steps a little outside it. I know my hon. Friend the Member for South Derbyshire (Mrs Wheeler), who is a champion for Toyota, which has the largest manufacturing plant in her constituency, would welcome a visit by Labour Members so they can see how the sector is booming just in her constituency. There are over 2,000 people working at the plant in South Derbyshire and involved in the supply chains, and 80% of the cars manufactured are exported to Europe. Exports are up, by the way, which I will get on to. Toyota continues to innovate and it is at the forefront of producing hybrid cars. It has been cutting emissions for over a decade and takes net zero seriously, having energy from solar panels all around the plant. The point she would want to make is, “Get out of the Westminster bubble, visit South Derbyshire, see what is happening at Toyota”—and at many other firms, as I will go on to say—“and you will see the work is going well.” Our job is to protect, promote and praise, not to talk the sector down.

This Government have a strong mandate to reach net zero and the consultation has just taken place on said mandate. The right hon. Member will know that I have been spending a lot time with the automotive sector, including taking delegations to meet the Minister of State, Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who will be overseeing that. My job—I also chair the Automotive Council—is to champion business, and on occasion to try to remove all the barriers it needs removed for it to manufacture more and export more. I know that the Transport Minister will be speaking more about that later.

The sector is indeed a jewel in the crown of our economy. It is vital, because of where it is based across the country, to supporting the levelling-up agenda, net zero and advancing global Britain. Our automotive industry employs 166,000 people, adds over £70 billion to the UK economy and is our second largest exporter of goods. The UK is proud to be home to major global manufacturers such as JLR, Nissan, Stellantis, Toyota, BMW and Ford. But that is not the whole of the UK’s automotive eco-system: we have a lot more to be proud of, from our luxury and performance sector, including Rolls-Royce, Bentley, Aston Martin, McLaren and Lotus, to heavy goods vehicles and buses, such as Leyland Trucks, Wrightbus, Alexander Dennis and Switch, as well as the future of mobility, encompassing connected and autonomous vehicles. Those manufacturers are supported by a diverse, resilient and growing UK supply chain that spans a wide range of components and includes companies such as Bosch, NSK, Meritor and Swindon Pressings. These are valued partnerships, and the sector knows that my Department for Business and Trade is the Government’s first port of call to help businesses grow and flourish, and to create jobs, apprenticeships and opportunities around the country.

I put on record my thanks to Graham Hoare, the current co-chair, Mike Hawes, Neville Jackson, Ian Constance, Markus Grüneisl, Paul Willcox, Murray Paul, Adrian Hallmark, Michael Leiters, Tim Slatter, Alan Johnson, Richard Kenworthy and many other indispensable members of the Automotive Council. I thank them for all the work they do, considering how challenging times have been not just for us but for our counterparts in Europe. I recently spoke at the Society of Motor Manufacturers and Trader’s parliamentary reception, and I welcome its “Manifesto 2030” with its five key priorities: green automotive transformation strategy, net zero mobility, green skills, made in Britain, and powering UK clean tech. There is a lot that we agree on, and I look forward to working with the sector to try to protect and strengthen the whole automotive industry. Car companies want to innovate, and we want to support them to do so. That is why the Government have an overarching goal of making the UK a global hub for innovation, as alluded to by the my hon. Friend the Member for Bosworth.

In embracing that innovation—this is further to my intervention on the shadow Minister—the UK is a leader in the development of the synthetic fuel sector. By that, I do not mean fuels made from feedstocks; I mean green hydrogen merged with atmospheric carbon capture, whereby what comes out of the tailpipe is the same volume of carbon that is then recaptured to make the next load of fuel. With whole system analysis, that will be shown to be net zero, but the zero tailpipe mandate gets in the way of that. Does the Minister agree that, to embrace this innovation properly and to give an eclectic future to the automotive sector, we need to embrace those innovators as well?

Those headwinds have been felt across the globe, and where the UK sector has been impacted, it has not been uniquely impacted. The entire automotive sector is midway through a once-in-a-lifetime shift away from the internal combustion engine towards zero-emission vehicles. That is good not just for our net zero ambitions; it also has the potential to provide wider economic and social benefits. Of course, our competitors know that too, and the race to secure zero-emission manufacturing capacity across the world is fierce. Some countries seem willing to spend eye-watering amounts. We will be offering targeted investment in the future of the auto manufacturing sector. That means focusing on exactly where we know we are ahead of the game internationally, offering targeted and measured support that reflects the size and scale of our outstanding automotive sector.

Some mention was made of R&D support, and I will share all the work we have done. Our R&D and capital programmes delivered through the Advanced Propulsion Centre and the automotive transformation fund are positioning the UK as one of the best places in the world to design, develop and build zero-emission vehicles. They are working together to support the creation of an internationally competitive electric vehicle supply chain. In the coming months, after engagement with industry, the Government will build on those programmes to take decisive action and ensure future investment in the manufacture of zero-emission vehicles, as part of our commitment to building a cleaner, greener, more sustainable Britain fit for the world of the future, not the world of the past that the hon. Member for Stalybridge and Hyde is fixated on.

I have spoken previously about the Advanced Propulsion Centre, because it does fantastic work in driving technology forward. It was founded in 2013 as a £1 billion joint venture between the automotive industry and the Government to help the industry meet the challenges of innovation and decarbonisation. It facilitates funding to UK-based research and development projects developing zero-emission technologies. The programme helps accelerate the development, commercialising and manufacture of advanced propulsion technologies in the UK. So far, it has supported 199 projects involving 450 partners. It is estimated to have supported more than 55,000 highly skilled jobs and is projected to save more than 350 million tonnes of CO 2 —the equivalent of removing the lifetime emissions of 14.1 million cars.

The Minister of State at the Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire, will touch on a few issues about the zero-emission vehicle mandate, so I will quickly touch on rules of origin. To support the transition, we must not only champion innovation but address all barriers to trade with partners and markets all over the world. Our closest trading partner is of course the EU, with whom we share not only climate goals and a trajectory towards electrification, but deeply integrated supply chains. More than 50% of cars manufactured in the UK and exported are destined for EU consumers. For those reasons, I am working closely with the industry to address its concerns about planned changes to the rules of origin for electric vehicles in the trade and co-operation agreement between the UK and EU.

We are home to more than 25 manufacturers that build more than 70 different vehicles in the UK, all of which are supported by 2,500 component providers and some of the world’s most skilled engineers. It is incredibly important to reflect how difficult it has been for the automotive sector globally, but of course we have huge success stories here in the UK. In 2022 we exported vehicles to more than 130 different countries and built more than three quarters of a million cars, with the onwards trajectory rising year on year. This is a healthy sector going above and beyond not only to reskill and upskill, but to meet net zero targets.

The Government are supporting the UK automotive industry, and the sector is a stalwart example of innovation and dynamism to the rest of the world. It is a great sector to get into, whether someone joins it as an apprentice or even by taking on a regular job. Of course, there is more to do. There are more opportunities to secure as we transition to zero-emission vehicles and we realise the potential of connected and autonomous mobility. We have already achieved a great deal in partnership with this fantastic sector, but we are determined to do more. We work with the sector—we do not sit in Westminster coming up with plans that we then U-turn on—and that has given the sector the confidence it needs to continue to invest in the UK. The job of those representing the sector is to praise, promote and protect, not to talk the sector down.

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14:00 Luke Evans (Conservative)

I am here to talk about the positive side of the automotive industry. In the east midlands, we are very proud of what we have to offer in the manufacturing industry. It has been through a tough time for the past 50 or 60 years, but we are making real progress. Only recently, Bosworth was noted as a net zero hotspot and described as

“connected areas with concentrated net zero activity, where businesses create jobs and add to the local hotspot’s economy”.

That all sounds very good, but when I ask my constituents whether they are aware of what is going on in our constituency, they do not really know what MIRA is. That is part of why I am so pleased to speak in this debate, because actually the UK is fantastically good in this space. It is not just about creating jobs—at MIRA, someone can go from being an apprentice all the way through to a PhD level qualification on cyber-security in cars. It is also innovating for the future to get to net zero and create energy security. It has been partnered by local enterprise partnerships, investment zones and the Midlands Engine to help drive investment, change policy and bring inward investment from the international community.

I want to mention two other businesses. Flying Spares, based in Market Bosworth, is a second-hand remodelling firm for cars such as Rolls-Royces. If someone need a part, it will ship it anywhere across the world. That is an innovative way of creating longevity and helping achieve net zero by recycling our high-end products. JJ Churchills is a fantastic advanced manufacturing aeronautical and defence agency, which employs 110 people, with high-end apprenticeships, in the middle of the countryside. This is happening right in my constituency—it is 85% rural, yet I have businesses like that.

A fundamental point has not been concentrated on enough. I am danger of straying into the territory of my Department, the Department for Energy Security and Net Zero, but the hon. Member for Worsley and Eccles South (Barbara Keeley), who is no longer in her place, raised the subject of infrastructure. It does not matter what we are discussing, be it wind, EVs, power generation or gigafactories; unless we sort the grid out there will be a fundamental difficulty. I believe that, broadly speaking, the UK is five years ahead in delivering on net zero. The problem is that so many companies are coming forward that they simply cannot be connected. I ask the Minister to speak to his colleagues in the Government to make sure that we deal with infrastructure. I know a report is coming out this month on the grid and how we can take it forward.

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14:13 Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)

The hon. Member is absolutely right. As a Parliamentary Private Secretary at the Department for Energy Security and Net Zero, I am acutely aware of those issues. I know that the Government put in place a Minister for the grid to look at that side of things. I believe that very soon a report will come out, which I am hopeful will answer the UK’s questions about connecting to the grid.

The real issue is, as my hon. Friend the Member for Stalybridge and Hyde said, that we need to get British industry working, and we need to work together to move forward. That can be done by the engineering and manufacturing sector. Green energy relies on the engineering and manufacturing sector. We do not want to have to import wind turbines; we can make them in the UK. We can make solar energy and hydrogen energy in the UK, and so we should. Let us enable the people in our industry to move forward on these issues. Let us support our industry and move forward.

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14:21 Nia Griffith (Labour)

Manufacturers have pointed out time and again that the UK has much higher energy prices than our competitor countries. This affects not only energy-intensive industry but all manufacturing. The solution is clear, and Labour has plans to implement it. We on the Labour Benches recognise the real urgency of the need to invest significantly in renewable energy. That is precisely what we would prioritise so that we could slash bills for industry and households while creating jobs—as well as, of course, tackling climate change and ensuring our energy security so that we are never again held to ransom by a foreign despot increasing gas prices. Instead, we have seen the Conservative Government ban the expansion of wind energy in England and take a half-hearted approach to lifting the ban, stalling on solar and, quite frankly, desperately underperforming on the roll-out of renewable energy over the past few years.

In addition, we need adaptation and transformation right across the industry. That is why we in the Labour party have set out our plan to implement a proper industrial strategy and establish an industrial council to provide long-term stability of policy. We have also set out our UK version of the US Inflation Reduction Act: our green prosperity plan. Our national wealth fund will, when needed, provide the finance to invest in the transformation of our automotive industry to produce EVs, which are an important part of our plans to get to net zero. We will boost UK battery capacity with the part-financing of eight additional gigafactories and accelerate the roll-out of charging points to give providers confidence to charge their EVs.

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14:30 Sarah Owen (Labour)

Under Labour leadership, battery-making capacity in the UK would boom. We would support the creation of eight new gigafactories, with this all laid out and costed in our green prosperity plan. The new factories would allow for our home-grown automotive businesses to source their auto parts within the UK. That would be huge for businesses such as Comline in Sundon Park. Crucially, with these new gigafactories, we would introduce about 80,000 new British jobs. I know how much that would mean to my constituents, from youngsters getting apprenticeships to older people knowing they do not need to worry about redundancy before retirement. With eight new gigafactories, we would also power 2 million electric vehicles, which is so crucial for working towards our commitment to net zero. All of that would bring in an additional £30 billion to our economy. It sounds like a good deal to me.

We are committed to building strong economic foundations that businesses need to succeed, including through reforms to the apprenticeship levy and business rates to give firms flexibility where they need it, and making the UK a clean energy superpower by 2030 with net zero carbon electricity, lowering electricity costs for the car industry. That is the leadership and the strategy that the automotive industry has been crying out for, and that is what a Labour Government would provide.

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14:45 Rachel Hopkins (Labour)

Labour will accelerate the roll-out of charging points and give confidence to motorists to make the switch, with binding targets for electric vehicle chargers. Our plan includes measures to make the UK a clean energy superpower by 2030, with net zero carbon electricity, lowering electricity costs for the UK car industry. I look forward to supporting Labour’s business team to make this a reality, so that the young people in Luton South see a positive future ahead of them, with good, skilled jobs for the long term.

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14:54 Ian Lavery (Labour)

I will not get into the football analogies that have been drawn on today. I am pleased that my hon. Friend has visited my constituency and seen for himself the potential that Energy Central has in Northumberland. Whether it is the two interconnectors or the Catapult facility in Blyth for renewable energy, we have a lot going on in the Blyth estuary region and, of course, in Wansbeck.

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15:26 Matt Western (Labour)

We are blessed to have some great companies here, including Jaguar Land Rover, Stellantis, as we have heard, and BMW Mini. Then, of course, we have luxury and performance manufacturers such as Rolls-Royce, Bentley, McLaren, Aston Martin—just down the road from me—and all the other myriad specialist companies, including Lotus, Caterham, Morgan and so on. The sector is even wider if we include the likes of Norton, Triumph—about which we have heard—JCB and Caterpillar, as well the bus and coach manufacturers that have a presence here and in Northern Ireland, such as Wrightbus, which are doing some superb product development and addressing the need to get to net zero.

The sector is so valuable. It can contribute £67 billion in turnover and £14 billion in added value to the UK economy, and it typically invests £3 billion a year in research and development. However, the industry has been so reliant on fossil fuels that the transition to net zero is a critical point in its history. I will outline some of the issues, one of which is the political stability—or the lack of it—to revive and attract the business investment that we need. Of course, I welcome this morning’s announcement by Renault-Geely, but we are really behind the curve. I will also pick up on a few challenges such as the ZEV mandate and the new trading relationship with Europe, including, of course, the rules of origin issue, which is so critical. I will then touch on energy and the other import costs that are a real drag on investment in the UK, as well as the need for an EV and hydrogen infrastructure mandate if we are to get the sector going.

Turning to net zero and the Government’s ambitions with electric vehicles, we need to press on that issue and ramp up battery manufacture. As we have heard, we are way behind compared with other countries, but we also need to support wider adoption of vehicles. The plans we have—offering interest-free loans and potentially trialling a national scrappage scheme—are important. However, as I said, the charging point network for EV is way behind schedule. My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) made the point that more EV charging points are being installed in Westminster than in the north of the country. That is quite a sobering statistic, and where we do have those few chargers, they are all too often poorly maintained. There needs to be a mandate to ensure that that infrastructure is delivered, not just for EV but for hydrogen hubs. We have made something like a tenth of the investment in hydrogen hubs that Germany has, which of course will be aimed at future heavy goods vehicles and other mass transport systems. Until recently, we had 12 hubs; that number has now fallen to six, I think, so we are going backwards when it comes to hydrogen hubs.

I touched on hydrogen; Members have also made points about sustainable fuels, and there is something to be said about what could be done in that sector. The motorsport industry is doing a huge amount of work exploring those technologies, and again, we are very much at the forefront of what can be done in that space—how existing internal combustion engines could be used with that kind of fuel to bring them close to net zero. That innovation is so important, whether it be through motorsport or our higher education institutions. We heard about HORIBA MIRA from the hon. Member for Bosworth (Dr Evans) and we have motorsport valley down the M40, but the Advanced Propulsion Centre at Warwick is also doing some fascinating work, supporting new companies with emerging technologies to make them commercially viable.

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15:41 Louise Haigh (Labour)

In the face of the new geopolitical reality and the approach our global allies are taking, the Government’s current approach is little short of reckless. The Biden Administration are at the forefront of this new economic approach, taking an active role in rebuilding America’s manufacturing base through their groundbreaking Inflation Reduction Act and the CHIPS Act. The European Union, with its Net Zero Industry Act, aims for 40% of its green industry to be based at home, and the Powering Australia plan is set to create 600,000 jobs and spur 76 billion Australian dollars of investment. Yet here in the UK, this Government seem content to settle for less and are resigned to good jobs and green growth continuing to head overseas.

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15:49 Jesse Norman (Conservative)

I thank the hon. Member for Llanelli (Dame Nia Griffith) for her comment. She asked for a renewable energy focus and was right to do so. I hope that I can reassure her by reminding her that National Grid reported that in 2010 less than 20% of our energy was renewable, while in 2022—last year—more than 50% was renewable in five months of the year. That is tremendous progress. She may also be pleased to know that coal, which was used for 43% of electricity generation in 2012, is now at 1.5%. That is tremendous progress on both those fronts.

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