[Sir Alan Meale in the Chair]
It is a great privilege to have secured this debate about the United Kingdom’s automotive industry. I hope that we will approach it in a consensual manner, discussing some of the successes we have had and how we move the industry forward. I think hon. Members are here not just because we understand how important the UK automotive industry is to our whole economy, but because we have a passion for the automotive sector itself.
I am a great fan of the BBC’s “Top Gear”. It is one of those programmes that is on every Sunday, and I dedicate myself to watching it. I am not sure whether you, Sir Alan, have the same enthusiasm for the programme, but I certainly do. One of the finest episodes I ever saw was in the most recent series, where the last part of the episode was dedicated to celebrating the UK’s automotive industry and everything we produce here, whether it was a Dennis or Leyland truck; a product from JCB or Caterpillar; a Norton or a Triumph motorcycle; one of many family cars that are produced in the UK by Toyota, Nissan or Honda; or some of the luxury cars that are envied the world over—Bentley, Rolls-Royce, Aston Martin, Jaguar and Land Rover.
The episode also celebrated our success in Formula 1, for which we are producing the finest racing cars in the world—from Petronas, Red Bull and McLaren to Williams and Lotus. The Italians hold nothing on us, as we beat them consistently. Quite simply, we produce the best in Britain, and a lot better than what is produced in Italy.
I do not want this debate to be about how we produce better things than the Italians, the French or the Germans, as it could go on for many more hours than the hour and a half that we have been allotted. Many people have a livelihood in the automotive sector. Some 731,000 people are involved in the wider automotive sector, while 146,000 are directly employed in automotive manufacturing. The industry expects the sector to grow, not by 5,000 or 10,000 jobs, but in the region of 100,000 extra jobs by 2020.
We are producing more and more. Often we look back to the ’50s and ’60s as the heyday of automotive production, but we are rapidly gaining ground. Last year, 1.5 million cars were produced in the UK. Production is forecast to be up to 2 million by 2017—more cars produced in Great Britain than ever before. Those are high-value cars, which make a difference to our balance of trade. Some 10% of all the things that we export from this country are automotive products.
We are the second largest exporter of construction equipment in the world. We are leading the field—for example, with JCB, which is based in Staffordshire—in developing technology and world-leading products. If we go to building sites in China, Russia, India and Brazil, we can see British products digging the foundations for their economies.
Does my hon. Friend agree that it is not just about British products going abroad, but about overseas companies seeking to come to Britain to make use of our expertise? For example, Nissan recently announced its largest investment outside Sunderland—a new £6 million investment with ADV in my constituency. That sort of confidence from overseas companies coming to the UK is vital.
My hon. Friend is absolutely correct. Much of our success has depended on learning from foreign businesses. They invest in the UK because they see that we have the right environment and structures to succeed.
Since 2010, £7 billion has been invested in the automotive sector, growing success and bringing jobs to the UK. My constituency of South Staffordshire has been incredibly fortunate to benefit from that investment; Jaguar Land Rover has announced a £500 million investment to build a new engine manufacturing facility on the i54 South Staffordshire site, creating 1,400 jobs directly and another 3,500 jobs across the UK in our supply chain.
I am sure that the hon. Gentleman recalls that one of the starting points for the turnaround of the motor car industry was when Tata took over Jaguar—before the 2010 election, by the way. I remember meeting Tata at the time, along with the trade unions.
We once tried to get Nissan to invest in Coventry airport and turn it around for car production. We did not get the grants at the time, which is why Nissan went to Sunderland instead. Nevertheless, we welcome any increase in production and manufacturing generally, but most importantly in Coventry and the midlands. The motor car is a big thing; Coventry was once known as the motor car city.
The hon. Gentleman is absolutely right. Let us not forget that the west midlands are the beating heart of the automotive industry in this country. The west midlands are what drive the automotive industry and have the most to gain from an expanding automotive industry. Almost one third of those employed in the industry live and work in the west midlands. That is why many hon. Members from the west midlands are present for today’s debate. We know that it is important to our constituencies and our region to drive economic growth and success. We have to be committed, both as a Government and as constituency Members of Parliament, in order to support businesses, whether foreign or domestic, to invest.
While much has been done, there is much more to do. The hon. Member for Coventry South (Mr Cunningham) pointed to the success of Jaguar Land Rover, much of which is down to research and development and which, importantly, leads to excellent products that people want to buy.
I congratulate my hon. Friend on securing this debate and on all the work that he has put in to ensure that JLR’s move to South Staffordshire will be a great success.
Does my hon. Friend agree that one of the areas in which the UK has a tremendous competitive advantage, based on excellent, top-quality R and D, is the development of engines? We have engine plants all over the country, including in my constituency—although not for the automotive industry—Perkins Engines, which makes the largest engines. It is vital that long-term investment in research and development in an area in which we have such a competitive advantage continues to grow.
My hon. Friend is absolutely right. He is right to point out the valuable work that Perkins Engines does to supply the heavy construction sector. We are seeing a build-up of expertise in engine design and manufacture, not just in the west midlands but right across the UK. That can be seen not just in JLR’s investment in its new plant or in Perkins’s work, but in BMW, which produces many of its engines in Hams Hall, and in Ford, as a third of its cars, which are produced across the globe, have engines manufactured in the UK. That is why it is vital that the Government keep their commitment to invest in research and development, whether through the Technology Strategy Board or the regional growth fund.
I am pushing for the Government to support and commit to the regional growth fund, and I hope the Minister will reassure us on that. I seek real Government commitment to help British industry and automotive production so that the technology and research and development bases may grow and develop. It is vital that R and D is based here in the United Kingdom, because if we can get businesses to invest in R and D in the UK, they will often base their manufacturing here, too.
I congratulate the hon. Gentleman on securing this debate. An important driver in the west midlands, and certainly in Coventry and Warwickshire, is the university of Warwick, where a lot of research and development and business innovation take place. Many companies, including companies from Germany, are investing because of that research and development, which helps the economy not only of Coventry and Warwickshire but of the west midlands. That is vital.
The hon. Gentleman is correct. The finest engine ever produced is being designed and engineered at Whitley in his constituency and will be built in my constituency by Jaguar Land Rover. Having that research and development based here in the United Kingdom is vital when businesses decide whether to invest in manufacturing in this country. Sadly, we do not have enough manufacturing, and we need more, which is why I urge the Minister to do all he can to start a dialogue with manufacturing companies, whether it is Nissan, Toyota, Honda or any of the many others, to carry out more research and development here in the UK. Some of the greatest automotive designers have come out of British design schools, and some of the best technical expertise comes out of British universities, but we have to leverage that much more.
One of the UK automotive industry’s great weaknesses is our supply chain. Although we have a very developed assembly sector, the supply chain is incredibly weak. The industry runs a trade deficit of close to £7 billion in components that have to be imported, which is not good enough. We need to make progress by encouraging businesses to invest in the UK from abroad, but we also need to strengthen our supply chain’s domestic infrastructure. We need to help small businesses to grow so that they can become medium-sized businesses. We need medium-sized businesses that are already supplying the automotive industry to grow into large businesses, and we need to support them as they take their first steps towards investing in research and development. If our automotive sector does not have a developed supply chain, it will become much more difficult for the sector to develop the new products that it needs to succeed. Let us not be so naive as to think that large automotive companies do all their product development purely by themselves; they do it hand in glove with their supply chain, working incredibly closely to ensure that the components, parts and products are in place for them to deliver new models.
The hon. Gentleman raises some interesting points. Talking about the supply chain—I will leave the automobile industry aside for a moment—unless companies such as Rolls-Royce get their spare parts on time, they cannot finish their engines on time, which often results in a financial penalty. That illustrates the point that it is vital that we get the supply chain right, whether we are talking about the automobile industry, manufacturing in general or companies such as Rolls-Royce.
The hon. Gentleman makes another strong point. When the disaster happened in Japan, many Japanese companies that produce large numbers of automobiles here in the UK were badly hit by disruption to their supply chain. There is a real benefit, not just to the British people but to companies based here in the UK, in having more of the supply chain on our doorstep. We need to do all we can not just to encourage small and medium-sized businesses but to encourage foreign businesses to invest in the UK.
I would like the Government to consider more closely how to give foreign investors greater reassurance that, if they invest here in the UK, they will have the support they need, whether through the regional growth fund or some other mechanism. That would help the UK to attract such investment. The Government must consider how we can reassure companies that we will give them training and skills support so that they have the right work force to deliver and manufacture their goods here in the United Kingdom. Education and skills are vital to this high-tech industry. Although we are making up ground, we still lag a little behind other countries. Every automobile manufacturer always says that its area of greatest concern is whether the skills will be in place for the next generation of workers.
I congratulate my hon. Friend on securing this debate. Will he join me in congratulating automobile companies such as Ford, which already has 68 advanced apprentices in engineering and 15 higher apprentices in engineering? Ford is going further this year and has committed to an additional 50 apprentices in both engineering and craft at the higher level.
I congratulate companies such as Ford on their work. In the run-up to 2018, the automotive sector hopes to take on 7,600 new apprentices and 1,700 new graduates. The sector is a growth area for young people, which is one reason why I am championing a £5 million investment in an engineering studio at my local high school in Codsall. Such a studio will concentrate on training the engineers and designers of the future so that South Staffordshire can provide the very best work force to Jaguar Land Rover and the aerospace sector and companies can grow with the best talent.
My hon. Friend makes a valid point. At the weekend, I took my two daughters to the Enginuity museum at Ironbridge near Telford. We saw a cross-section of a Mini. Although the design is amazing and out of this world, it is all pulleys and levers. Now, much of a Mini’s design is down to electronics. We must not forget how high tech or capital-intensive the automotive industry is, but it is about getting the skills and technology in line, and the Government have an important role in ensuring that that happens. Let us not forget that if youngsters and people of all ages do not have the skills, and if we do not support companies constantly to skill up and improve their work force so that they can move forward, we will lag behind.
I am conscious that other people want to take part in this debate. In summary, I seek assurance from the Minister that the Government are committed to ensuring that the regional growth fund continues to deliver jobs and investment not just for the west midlands but for the whole country. The fund has already achieved a great deal, but it can do more. Let us not kid ourselves, because the automotive sector is one of the most international industries in the world. The sector can move to virtually any country. We would be very naive to think that countries such as Germany, Italy, France, Spain, Portugal, India, China, Russia, Brazil and the United States are sitting back and not being proactive in attracting investment, because those Governments are going out to seek and deliver investment. I want to see the Government continuing to do that, ensuring that it is clear to everyone not only that we have the most skilled work force and the best designers in the world and produce the best cars, but that we are the best place to produce them.
Order. Before we continue, I have permission from the Speaker to impose time limits on speeches if necessary. Seven Members have indicated that they want to speak, and we need to give a proper opportunity for the Minister and the shadow Minister to respond. I will impose a five-minute limit on speeches, which includes any interventions. It is up to individual Members to decide if they want to give way.
I congratulate the hon. Member for South Staffordshire (Gavin Williamson) on securing this debate, and I join him in his paean of praise for all sectors of the UK automotive industry and his ambition for its future. He referred to Jaguar Land Rover; its success is great news. I am pleased about the part that Unipart, which is based in my constituency, has played in that success. On the important point he made about the supply chain, he might be aware that Unipart’s after-market logistics were, with Jaguar Land Rover, the overall winner at the independently assessed European supply chain excellence awards last year, reflecting innovation, delivery and collaborative commercial success over many years. We have examples of excellence in this country that can be built on and emulated.
I take this opportunity to praise the achievement of the 4,000-strong work force at Cowley and BMW’s investment of £1.75 billion in the UK, which has made possible the continuing stunning success of the Mini. It is a very good example of what can be achieved by British manufacturing in the most competitive markets, so long as there is the right investment, the best design and engineering, a skilled and committed work force and a management adept at securing continuous improvement in product quality and responsiveness to customers. Whenever I visit the plant, I am struck by just what a staggering logistical accomplishment it is to manufacture a car these days. The Mini has 3,600 parts, arriving from several suppliers in different parts of the UK and abroad, with countless variations per model, five different models going down the line at the same time and the right parts arriving in the right place in the right order at the right time. I cannot help thinking that if Government policy, and IT projects in particular, were delivered as well as car production, we would all be a lot better off.
Partnership with trade unions is important. Industrial relations at Cowley have been transformed since BMW took over. That is not because the union is weak or has caved in—it has not—nor just because BMW’s ownership and management are so much better than what went before, although they certainly are. That transformation has happened because there is a constructive partnership, with real commitment to and a mutual interest in success. Negotiations are sometimes hard, but the outcomes are good. A recent example was Unite’s success in securing agreement that 1,000 agency workers on temporary contracts would become eligible for permanent contracts, giving a massive boost to security and well-being for the workers concerned and their families. The Mini plant is not only a premium employer locally, but is leading the way in training, with £1 million invested in its Oxford training school and 95 apprentices. It is important for the future of the plant that we nurture the skills and application needed to sustain advanced manufacturing success.
Across the industry, the quality of apprenticeship training remains too variable. The Minister should look, through the Automotive Council, at how we can achieve a standard automotive framework with high levels of quality assurance. We also need to sustain a competitive business environment, simplify energy efficiency regimes and keep business rates down. Through that, we can build on the Mini’s fantastic success, with 2.4 million models produced and 80% of production exported to 108 different markets. That represents a massive contribution to the UK balance of payments, exemplifying UK manufactured export achievement at its best, and is a performance the country needs to emulate more generally.
The new model of the new Mini went on sale last month and is showing every sign of carrying that success forwards, with more than 4,000 UK orders taken even before it was in showrooms. Obviously, as with every other car Britain is looking to export, what we most want is sustained world economic growth in demand, but through this recent difficult period, the Mini has shown what is possible. I thank the work force for all that the success of the Mini means to Oxford, and our partners in both the Mini production triangle at Swindon, where the body panels are made, and the engine plant at Hams Hall, which enabled Mini engine production to be repatriated from Brazil. I also thank BMW for the sustained investment and its commitment to the future, which can keep Plant Oxford and all its workers in my constituency at the forefront of automotive success for years to come.
I am delighted to congratulate my hon. Friend the Member for South Staffordshire (Gavin Williamson) on securing this debate, and I am also pleased to follow the right hon. Member for Oxford East (Mr Smith). I worked for MG Rover, which was one of the most iconic firms in the country, between 1997 and 2004. When I suggested to the work force that I wanted to become a Member of Parliament, they took it with much hilarity. As I did not make it in 2001 or 2005, they were partly right. I did say, however, that if I ever got to this place, I would be delighted to speak on behalf of our manufacturing community and, in particular, our automotive sector.
It was interesting to hear from the right hon. Member for Oxford East about the success of the Mini, which was one of the reasons for the demise of MG Rover—it did not have the good fortune of manufacturing the Mini at its plant—but I congratulate him on his particular success. I am delighted to see the hon. Member for Birmingham, Northfield (Richard Burden) here. He was the first Member that I debated against, when I was working at the MG plant.
As co-chair of the all-party manufacturing group and the Member for Warwick and Leamington, I am aware of the importance and enduring heritage of manufacturing and the automotive sector supply chain, which runs through the whole west midlands, as my hon. Friend the Member for South Staffordshire said. I am also very much aware of the need to re-shore manufacturing and encourage the export of British-made goods. The trend of re-shoring is growing, I am pleased to say. A recent report from the EEF found that one in six firms has brought part or all of its production back to UK suppliers. The Minister has encouraged and achieved action on reduced operating costs, affordable finance and investment. Britain has the most productive automotive sector in Europe and in 2012, as has been recognised, we exported more vehicles than ever before.
Until recently, it was often assumed that manufacturing cars in Britain was a thing of the past, but new technology and a renewed focus on research and development in recent years has turned that around. The national automotive innovation campus at the university of Warwick is one example of that renewal. An investment of nearly £100 million over 15 years will provide an unparalleled centre for research and innovation, which Members will recognise as a magnet to bringing manufacturing home. Over more than 30 years, the Warwick Manufacturing Group has been a clear example of how collaboration between universities and industry can benefit both sectors and provide a strong foundation for practical and innovative research. Making cars more efficiently has been a defining feature of the past decade and has widespread positive benefits. Improvements to manufacturing processes have reduced energy use by 43% and water use by 48%.
Another key Government focus, on skills and apprenticeships, is also having a significant positive impact on the manufacturing and automotive industries. Developing a more skilled work force starts in schools, where a variety of schemes are in place to encourage the uptake of STEM subjects and to encourage career paths through apprenticeships. The Government’s introduction of employer-led and designed apprenticeships is important and allows skill development to be tailored to the needs of the sector.
My constituency has a proud tradition of manufacturing, and I am particularly pleased that the automotive business, both locally and in the wider economy, has improved greatly over the years. We must ensure that Britain continues to build on the momentum of recent years and continues to be the home of a thriving automotive sector.
It is a pleasure to serve under your chairmanship, Sir Alan.
I received an e-mail on Sunday from a young man from Castle Vale who was desperate because he has been out of work for two years—one in four young people in my constituency are out of work—and he said, “Jack, can you help me to get into Jaguar Land Rover?” For him, times are bleak, but Jaguar Land Rover’s remarkable transformation and success story over the past five years offers hope.
The future looked bleak when Ford was in control. When I was elected in 2010, the assumption was that the Jaguar plant would close. Mercifully, Tata, an excellent company, took over and brought in two outstanding Germans, Carl-Peter Forster, managing director and group chief executive officer of Tata, and Ralf Speth, the new CEO, to have a fresh look at the business together with the remarkable Lord Kumar Bhattacharyya. I remember meeting them within days of the general election, as they were having a fresh look at the fortunes of Jaguar Land Rover, and two points stick out in my mind.
First, the people brought in by Tata said that notwithstanding the run-down of the automotive industry in the west midlands, there were great residual strengths. There are both primes and component companies, from GKN on the one hand to Jaco-Sumal, which employs eight engineers just off Erdington High street, on the other. There are logistics companies, research and development facilities and universities, such as the university of Warwick. That goes all the way down to the midlands’ world-class games industry, with which the automotive industry wants to collaborate on the next generation of in-car entertainment. Secondly, they said that they welcomed the Labour Government’s commitment to an automotive sector strategy and the incoming Government’s commitment to continuity of policy.
Over the past four years, what we have seen is nothing short of a remarkable transformation. Jaguar Land Rover is now one of the jewels in the crown of British manufacturing. Like my right hon. Friend the Member for Oxford East (Mr Smith), I want to pay tribute both to the company and the work force. It is sometimes popular in this place to knock Unite, which does get it wrong from time to time, but its role in the transformation of the automotive industry and in what happened at Jaguar Land Rover has been nothing short of outstanding.
I have two points about what the next stages should be. First, I hope that the Government back Jaguar Land Rover’s skills bid. The hon. Member for South Staffordshire (Gavin Williamson), whom I congratulate on securing the debate, was right to focus on skills. JLR wants 5,000 more people in its factories and 20,000 in its supply chain. It is already running into skills bottlenecks and is therefore crucially working with its supply chain, but it needs Government support if it is continually to ramp up the necessary skills.
Secondly, just when we are seeing a major transformation of the industry into a world-class success story, it is crucial that we do nothing to put it at risk. The continuing uncertainty over our membership of the European Union is damaging to the automotive sector. Inward investment is key to the success of the sector, but key to inward investment is our continuing membership of the European Union. The problems within the Conservative party over membership of the EU do not help to secure the industry’s medium to long-term success.
In conclusion, we are rightly celebrating a success story, but we must sadly mourn the fact that Dunlop Motorsport is leaving these shores after 125 years of production in our country. It is a bitter irony that just when automotive industry is increasingly onshoring its supply chains, Goodyear, which is based 3,500 miles away in Ohio, is offshoring. Having said that, the main emphasis today has rightly been on celebrating and building on the success stories, but the Government’s role is crucial.
It is a pleasure to follow my fellow Birmingham Member of Parliament and hon. Friend the Member for Birmingham, Erdington (Jack Dromey) and the hon. Member for Warwick and Leamington (Chris White), whom I have known for many years—I remember well that first debate. I also congratulate the hon. Member for South Staffordshire (Gavin Williamson) on securing the debate. He started off his remarks by talking about “Top Gear”, and I think I may be the only Member in this debate who has actually been on the programme. I appeared on a feature looking for the fastest political party, and the good news, at least for the Opposition, is that I soundly beat the Conservative candidate, but the rather bad news is that I was beaten by the Legalise Cannabis Alliance, so I do not necessarily talk about that too much.
Thank you, Sir Alan; it is much appreciated.
As my hon. Friend the Member for Birmingham, Erdington said, ask anyone in the automotive industry what they want from Government and two words will come up time and time again: continuity and predictability. It is not always exciting for politicians, because we all love to blame everything that goes wrong on the other side and to corner the market in everything that goes right for our side, but the automotive sector does not work that way. The reality is that all major political parties underestimated the importance of manufacturing for too long, but that has now turned around.
The automotive industry has been a trailblazer, with great partnerships within the industry, which my hon. Friend the Member for Birmingham, Erdington and my right hon. Friend the Member for Oxford East (Mr Smith) discussed, but also with the Government and with Parliament. The industry forum that thrived under the previous Government was a building block of that success, as was the creation of the Automotive Council, which creates road maps for future issues facing the industry, such as skills and the low-carbon agenda. Other hon. Members have referred to the figures that highlight the automotive industry’s success story. Despite your offer that I can speak for longer, Sir Alan, I will not repeat them, but suffice it to say that some of the figures are startling.
I want to discuss something that the hon. Member for South Staffordshire mentioned, namely the role of the motorsport and performance engineering industries in the automotive sector. Eight of the 11 Formula 1 teams are based in the UK. Lewis Hamilton won the Malaysian grand prix on Sunday, which was very good, and the results state that he was driving a Mercedes, which he was, but that Mercedes was built in Brackley. The factory in Brackley has been Honda, Brawn and Mercedes, but it has always been British. Motorsport companies are involved in so much more than what many people usually think of as motorsport, such as the fantastic work being done in a range of areas at the McLaren Technology Centre by McLaren Applied Technologies. How many people know that the skeleton sled on which Lizzy Yarnold did so well at the winter Olympics was designed by McLaren here in the UK? Williams Advanced Engineering’s centre is also doing much great work, and companies such as Prodrive and Cosworth are also involved in state-of-the-art work.
The UK, however, is the home of motorsport not only in Formula 1, but in so many other ways. The national and grassroots series are among the building blocks that make our motorsport and performance engineering industries as world-class as they are. The premier national racing series is the British Touring Car championship, the opening round of which was on Sunday. The main sponsor of the series is Dunlop Motorsport. Why therefore is Dunlop Motorsport, as part of that cluster, turning its back on the home of motorsport? When the Minister responds, will he update the House? I know that approaches have been made on the matter from both sides of the House. My hon. Friend the Member for Birmingham, Erdington and I have worked hard on the issue, and it needs to be said to Dunlop that it has still not answered satisfactorily the questions that have been put to it, and that the reasons it has given for doing what it seems intent on doing have not been convincing. It will be bad for motorsport, for the cluster and for Dunlop if it goes ahead with what it is doing.
I mentioned the British Touring Car championship. Two of the races on Sunday were won by Hondas built in the UK. The road car, the Civic, is also built in the UK. Despite the success of the automotive industry, we sometimes find things that are not great, and it is worth pausing for a moment to reflect on the fact that just in the past week Honda has had to cut back on some shift working at Swindon, which is something to be mourned by all of us. If we ask the people at Honda why that is, they say that it is about the market for their cars, and crucially the European market. Europe is still the largest export market for UK vehicles.
In my constituency, Shanghai Automotive still produces MGs and has its European technical centre there as a base, a foothold and a bridge into Europe. The hon. Member for South Staffordshire was right that the automotive industry needs reassurance, but it needs reassurance that we will not play fast and loose with our membership of the European Union. That is important not only to the motor companies exporting into Europe. Jaguar Land Rover, for example, has fantastic export achievements in other parts of the world, but ask it and those who want to export to the United States about the European Union and they will also say that continued membership is vital to them, apart from anything else because of the free trade agreements and other ongoing negotiations. I accept that the Conservative party might have one or two problems, looking at its flank with the UK Independence party, but frankly the interests of Britain are more important. Continued membership of the EU and reducing the uncertainty about our membership are very important.
On the supply chain, the hon. Member for South Staffordshire was right that one way in which we can and should do more is by ensuring that its component sections—the original equipment manufacturers—in the UK are firmed up and developed. About two years ago, KPMG produced an important report for the Society of Motor Manufacturers and Traders which showed that about £3 billion-worth of opportunities are being missed in the supply chain. That is why it is important for us to do more.
Some good things are going on: the Automotive Investment Organisation, headed by Joe Greenwell, formerly of Ford of Britain, has been set up to attract vital foreign investment, which is good news; the advanced manufacturing supply chain initiative has been established, which is good news; and the advanced propulsion centre is being established, which is important to ensure that there are opportunities for small and medium—and not so small and not so medium—companies in the development of ultra-low-emission vehicles and so on.
We need a sustainable framework, however, which is why the hon. Member for South Staffordshire was right to stress the importance of predictability and speed of action by things such as the regional growth fund. I believe that it was a mistake to get rid of the regional development agencies. We may disagree about that, but they at least provided a framework for making decisions and ensuring that those decisions were carried through. All too often, things are too hand-to-mouth at the moment. I hope that the Minister will address that issue, because the automotive industry is very much the jewel in our industrial crown.
Many other sectors in the UK and beyond are asking, “How did you do it in automotive?” They want to copy things such as the Automotive Council or the partnership. That is good news, but we must not rest on our laurels. There is a huge skills agenda to be developed and so much more yet to be done with the supply chain to ensure that we achieve our potential.
In conclusion, I hope that the Minister will say a few words about Dunlop, because that is still not a done deal and we still need to apply pressure. I hope that he will join me in applauding the work of the Automotive Council. I also hope that he will say a little more about the advanced propulsion centre; about how the UK will accelerate on the ultra-low-emission vehicle agenda, because we are lagging behind other countries in the take-up of such vehicles; and about what we can do to better address the concerns expressed by the industry about skills and the supply chain.
I appreciate the opportunity to speak in the debate, which I had not intended to do, but with the slight west midlands bias I thought that I might divert attention back down to the south-east and speak about a specific aspect of the automotive industry and the impact that it has had on my constituency.
I imagine that the instant inclination is to think that I will talk about Ford, and of course it was a huge loss to Southampton when the Transit plant closed last year. In fact, the Transit had been made in Southampton for my whole life and, historically, there were always adverts in the local paper claiming Southampton as the home of the Transit. I pay tribute to the hard work of Ford to ensure that an automotive base remains in the city, as well as a level of employment in my constituency that, at the time of the original announcement to close the plant, we had not expected. One hundred and thirty-four jobs remain in the city, but much of the focus has moved to the port and to the export of vehicles through Southampton docks.
Even at the height of the recession, when economic conditions were difficult, we saw significant expansion in Southampton, particularly of multi-deck car parks. Massive numbers of cars from all the main manufacturers that have been mentioned this afternoon are exported through the port of Southampton—at the moment the figure stands in the region of 0.5 million vehicles every year. We rightly regard the port as one of the significant economic drivers of our entire region. I was privileged to be there yesterday at the opening of the new Southampton container terminal, SCT 5, and there was no doubt that the emphasis was on the automotive sector and its contribution to jobs in the city and to the export of cars through Southampton.
Ford did a fantastic job locally, in partnership with the university, on the Ford scholarships, providing 10 scholarships a year of £10,000 to young people seeking engineering jobs in the automotive industry. Significantly, 50% of the scholarships have gone to women. I notice that the debate has been all-male so far this afternoon, but there is role for women in the automotive industry. I remember the chairman of Ford telling me several years ago that some of the attitudes towards women that he encountered in Westminster would not be tolerated on his factory floor. He is absolutely right; Ford has been a trailblazer in ensuring that the automotive industry is one in which there is an equal place for women. I congratulate Ford on that, as I congratulate my hon. Friend the Member for South Staffordshire (Gavin Williamson) on securing the debate.
It is a pleasure to serve under your chairmanship today, Sir Alan. I, too, congratulate the hon. Member for South Staffordshire (Gavin Williamson) on securing the debate.
Today in the UK, we produce more than 0.5 million vehicles and 2.5 million engines each year, of which we export some 80%. That equates to a vehicle rolling off the production line every 20 seconds, making us the 14th largest producer in the world. Of course, as we have heard, the west midlands dominates the car manufacturing industry in terms of employment, but UK manufacturing industry as a whole employs about 2.6 million people, which is 8% of all jobs. Sadly, only 2,000 people now work directly in the automotive industry in Scotland, but I am old enough to remember the heady days of manufacturers such as Rootes and Chrysler just up the road from my constituency in Linwood. What plans do the Government have to encourage vehicle manufacturers to locate elsewhere in the UK and to take advantage of Government help north and south of the border and the skills that still exist in those areas of the country?
We should not forget that there are also jobs in the supply chain. More than 2,000 UK companies regard themselves as automotive suppliers, and they employ about 82,000 people. The UK automotive supply chain generates £4.8 billion of added value annually, with an estimate now of a possible further £3 billion if the opportunities are taken. They should be taken, because about 80% of all components required for vehicle assembly operations can be procured from UK suppliers. I repeat my question to the Minister about how he is encouraging sourcing from UK suppliers.
What will build the future of the automotive industry in the UK? It can probably be summed up in a few words: innovation and quality in design. Innovation means product improvements, and challenging accepted practices, processes and design limitations. This country has been a trailblazer of vehicle innovations that pushed boundaries and showed our competitors a clean pair of heels. In the past those innovations included transverse engines, limited-slip differentials and independent suspension, as well as numerous safety features and a reduction in weight by using new metals to build our engines. I could go on—I am an old mechanic and I could spend hours reciting British vehicle innovations.
Quality in design is what makes products timeless. Anyone who thinks of iconic cars of the past will recognise that British design is there. Hon. Members have spoken fondly today of the forerunners of the small family cars we see so much of today, such as the Mini, whose subframe chassis allowed the first transverse engine, with new positioning of the gearbox. That was a revelation. The Hillman Imp, built in Linwood in Scotland, had a cutting-edge rear-mounted aluminium alloy engine. With its less than 1-litre engine size it produced the same power as a much larger vehicle by cleverly optimising a 9:1 swept volume ratio. That gave sports car performance to a small family saloon. Further up the market range are classics such as the E-Type Jaguar, which is still one of the most iconic sports cars around. With its limited slip differential it was the forerunner of the 4x4. The weight that heavy goods vehicles can now carry is the result of our development of the air braking system.
Unfortunately, we lost our way for a while and stopped pushing at the design boundary and quality mark. The world overtook us. Most significantly, at first, the Japanese took quality to a new level. However, the way of thinking I have described is being revived by manufacturers in the UK, including Jaguar Land Rover and Nissan, not to mention bus and truck builders. The vehicles they are developing and the innovative designs they are offering are the reason why they are winning markets. That is why I firmly believe we need to plan for manufacturing; the resurgence cannot be left to chance, or to peter out. We need to plan for continued success and maximise benefit around the country. The Government need to encourage more research and development and put their foot on the accelerator.
We need small and medium-sized firms to be a critical part of the supply chain. How do the Government intend to promote a fully integrated UK supply chain and green procurement? We need to overcome supply and demand problems in relation to products and skills, and we need to tackle the culture that refuses to take pride in professions such as engineering and prevents good manufacturing firms from coming to schools to talk to young people. We need high-skill jobs; we need to win the race to the top; and we need many more apprenticeships like the one I served. We need to move up the chain of employment and skills.
Any plan should include green jobs in the automotive industry. We need to design cleaner factories and vehicles, along with cutting-edge production flow and quality assurance techniques, to embrace fully the culture of right first time and defect-free manufacturing. We need procurement that sources around the country to create jobs, but we also need to reduce lead times and promote a just-in-time procurement practice that complements a constant-flow production strategy. We need to end the competitive strategies that value low wage costs over a trained work force. For the consumer, price is not the only factor when purchasing.
As we have heard, one of the most important issues for the industry and the country is the debate about the UK’s membership of the EU. Ahead of the European election, the Society of Motor Manufacturers and Traders wants to ensure that its voice is heard in the automotive sector. Given that we are a significant part of a global industry, and that 80% of all cars manufactured in the UK are exported, the SMMT has commissioned a report, to be published tomorrow, that will provide an economic assessment of the value of the EU to the UK automotive industry.
Labour is clear that business is the solution, not the problem. A plan for manufacturing, with business working in partnership with the Government, is central to building an economy that works for everyday working people, resolving the cost-of-living crisis, delivering jobs that pay a wage people can live on and ensuring that we can pay our way in the world. All that can be made in Great Britain.
It is a pleasure to serve under your chairmanship again, Sir Alan. I thank the hon. Member for South Staffordshire (Gavin Williamson) for securing the debate. It has given us a welcome opportunity to discuss what he rightly said is a hugely important part of the British economy.
I think that the hon. Gentleman began by mentioning Italy; he also mentioned the importance of the west midlands for the UK automotive industry. That is true, but in God’s own country, the north-east of England, a single Nissan plant produces more cars than the entire Italian car industry. That is a remarkable achievement and shows how the British car industry has been transformed. Forty years ago, it was a symbol of industrial decline, inferior products, obsolete manufacturing processes, poor industrial relations and a lack of competitiveness. The sector has undergone a remarkable and welcome transformation in fortunes in the past seven or eight years. As the hon. Gentleman said, the task for all of us is to maintain that competitive edge for the UK automotive sector, with an emphasis on high productivity, high skill levels and innovation, with the aim of raising living standards for all within the industry.
As has been mentioned, there has been great news recently, including the launch of the new Quashqai by Nissan at its plant in Sunderland, the new factory being built by Jaguar Land Rover in Wolverhampton, and the new Mini in Oxford, but there has been bad news too, with the recent announcements at Honda. Anne Snelgrove, whom you will remember from her time in this House, Sir Alan, has been championing the issue in Swindon.
Last month, my hon. Friend the Member for Streatham (Mr Umunna), the shadow Business Secretary, framed the challenge facing the British economy, terming it Agenda 2030. It has four clear pillars: active government investing for the long term; liberating the talents of all; solving tomorrow’s problems today; and an outward-looking, open approach to the world, not isolation. I want to base my discussion of how we can maintain the comparative advantage of the UK automotive industry on those four pillars.
As for an active industrial strategy, it is, as my hon. Friends the Members for Birmingham, Erdington (Jack Dromey) and for Birmingham, Northfield (Richard Burden) said, vital that the Government provide long-term policy certainty and predictability which transcend electoral and political cycles and align more closely with industry’s investment and process cycles. We should be thinking not only about next year or the next five years, but the next 15, 20 or 30. That is why my hon. Friend the Member for Streatham chose the title Agenda 2030. It is five years this month since the Labour Government published “New Industry, New Jobs”, with an emphasis on activism and targeted investment. A grant was provided to Nissan to support a new battery plant and the manufacture in the UK of the Nissan Leaf. The scrappage scheme helped maintain the industry at a time of acute falling demand. More importantly, as we have heard today, the Automotive Council was set up to lay the foundations for a long-term partnership between the industry and the Government and to build long-lasting capabilities and create supportive policies for the automotive industry; it is something that we strongly support. We remain committed to the long-term continuation of the Automotive Council as the key institution for driving strategy, collaboration and innovation in the sector. As we have heard today, we cannot achieve that without the pride, professionalism and commitment of the industry’s work force.
My right hon. Friend the Member for Oxford East (Mr Smith) mentioned Cowley, and my hon. Friend the Member for Birmingham, Erdington mentioned Jaguar Land Rover. As my right hon. Friend the Member for Oxford East said, trade unions often get a raw deal in the media and the House. However, we must give Unite credit for playing a leading and proactive role in the automotive industry in general. I am pleased that it did so much great, proactive work to ensure the next generation Astra will be built at Vauxhall’s Ellesmere Port plant. I hope that the Minister agrees that the collaborative approach of the industry, the work force and the Government is the model we should take forward for the long term.
To ensure the UK’s automotive industry achieves its potential, we must address the issues surrounding the supply chain. The Automotive Council estimated that an additional £3 billion per annum could be provided in the UK’s automotive supply chain—a 40% increase on current levels of UK-based supply chain activity. Reshoring is an exciting opportunity. KPMG estimates in its excellent report from about 18 months ago, “Capturing opportunity”, that supply chain opportunities could result in tens of thousands of additional jobs in the UK automotive supply chain by 2017. The prize of more and better-paid jobs, additional industrial capability and renewed competitiveness is huge, and we must grasp it. That is why the Labour party asked Mike Wright of Jaguar Land Rover to undertake an independent review of the manufacturing supply chain to ensure that it is as collaborative, co-ordinated and competitive as possible.
Will the Minister update the House on what he is doing to bring more of the global supply chain in the sector to the UK? How many firms in the automotive industry have received funding from the advanced manufacturing supply chain initiative? Does he plan to put AMSCI’s funding on a more permanent footing to give industry the long-term ability to plan for the future?
As the Minister knows, access to finance remains a problem in the supply chain. Firms often require funding to purchase tooling to complete an order, but they are not paid by the customer until the products are shipped, which puts immense pressure on their cash flow and undermines the potential of the UK automotive supply chain. We need the banking system to work with and for British industry, especially the excellent and promising automotive industry. Far too often it does not. The automotive industrial strategy states:
“The Automotive Council will…work with the financial services industry to develop long-term investment finance products that meet the needs of the automotive industry”.
Will the Minister update the House on progress with that? What has been the flow of finance to the automotive supply chain, and what else will be done?
I mentioned the potential to create tens of thousands of additional jobs, which brings me to the second pillar of Agenda 2030: skills. Every right hon. and hon. Member mentioned skills in their contribution, and they are a massive issue in the automotive industry, and in manufacturing in general. It will make or break the potential of our country’s automotive industry in the next 20 or 30 years. The automotive industrial strategy states that the pipeline for new entrants into the industry narrows too early, with too much leakage at important points. In addition, I am struck that in several of the automotive industry’s bright spots, such as my region of the north-east, as well as the west midlands, unemployment is appallingly high. The unemployment rate in Birmingham, Erdington is the 53rd worst in the country and in Birmingham, Northfield it is the 59th worst. My hon. Friend the Member for Birmingham, Erdington said that one in four young people in his constituency are jobless. We need to marry up skills and potential with the potential work force of the future.
My hon. Friend the Member for Inverclyde (Mr McKenzie) talked about the cost-of-living crisis. It is more fundamental than simply prices versus wages; it is about how our kids get decent jobs, a high standard of living and a good career. A co-ordinated industrial strategy should link education policy and curriculum content with the automotive industry’s needs. Will the Minister update the House on how the skills road map for the sector is progressing? How will it improve skills and ensure there are more opportunities and fewer vacancies in the industry? The strategy states that 7,600 apprentices and 1,700 graduates will be recruited in the period 2013-18—the hon. Member for South Staffordshire mentioned those numbers. How is that progressing? What are the Government doing to promote better collaboration between firms in the industry to address the sector-wide problem of skills?
The third pillar of Agenda 2030 is solving tomorrow’s problems today, or the importance of innovation, which my hon. Friend the Member for Inverclyde discussed in his strong contribution. In a debate last month on the automotive industry in the other place, it was said that the chief executive of Jaguar Land Rover expressed the view that the most important thing to his company was innovation. We have a lot of so-called “sticky” technologies and comparative strengths that we need to enhance. This country is particularly strong in designing, producing and manufacturing engines. I am pleased to see the hon. Member for Romsey and Southampton North (Caroline Nokes) in the Chamber. She mentioned Ford. It should be a source of enormous pride to us that one in three engines produced by Ford globally are produced in the UK. We must continue to be strong in engine technology. Will the Minister tell us what progress is being made in setting up the advanced propulsion centre?
This morning, I met Air Products, a firm that is a leading player in the hydrogen industry. It is normally a business-to-business firm in the chemicals industry. What is the Minister doing with the Automotive Council to develop capability and infrastructure for hydrogen fuel cell technology in cars? How successful has the planned collaboration been between the Automotive Council and the Engineering and Physical Sciences Research Council? Will the Minister update us on the work that the Automotive Council has done to identify evolutionary and disruptive technologies that will have an impact on the UK automotive industry and which could hinder progress or provide benefits to our comparative advantage?
The fourth pillar of Agenda 2030 is being outward-looking and open. It is clear from today’s debate that the House wants to encourage inward investment, so original equipment manufacturers and tier 1 and tier 2 automotive manufacturers base their European operations in the UK. The domestic market is important, but that springboard to a European marketplace of half a billion customers is the key selling point for reshoring and encouraging inward investment. As my hon. Friend the Member for Birmingham, Northfield said, internal wrangling and navel gazing will not help potential investment into the UK. We may lose our competitive edge if we do not address the policy certainty issue about European issues.
Will the Minister address directly the point made by the head of Nissan late last year, when he said bluntly that the car maker may have to evaluate its UK operations if Britain pulls out of the EU? Does that not concern him? Has he seen the report on UK jobs supported by exports to the EU published this week by the Centre for Economics and Business Research, which shows that 4.2 million jobs—particularly those in the north and in the motor trade—are associated with the demand in exports to the EU? It is vital that we remain part of the EU to ensure that manufacturers can base their operations in the UK.
I congratulate all hon. Members who have spoken today. It is clear that the automotive industry is a massive success for British manufacturing. It is a great case study in how industry, the work force and the Government can work together for the long term, with an emphasis on innovation, productivity, competitiveness and exports. We cannot be complacent in the fiercely competitive world in which we live. We must work together for the long term to maintain and strengthen the enviable comparative advantage of the automotive industry in the UK. I look forward to working with all hon. Members to meet that challenge.
Thank you for the way you have chaired the debate, Sir Alan, and for allowing me a reasonably generous time to respond to the points that have been made. I congratulate my hon. Friend the Member for South Staffordshire (Gavin Williamson) on securing this debate on a subject about which he feels passionately. He made an excellent speech, and I want to echo his comments about the Jaguar Land Rover decision to invest £500 million in a new engine plant in his constituency. That is very welcome news indeed and will bring a massive boost to the area and the supply chain, creating some 1,400 jobs. I am pleased that JLR is already making good progress in recruiting to fill those positions. I am also pleased that the Government are able to support that investment with a £10 million grant.
Various points were made by several hon. Members in excellent speeches. I will touch on as many as I can in addressing the three themes that have emerged today: the supply chain and the need to continue to strengthen it; skills and the need to continue to attract people, including women, into the industry; and what we are doing to advance our enormous strengths in innovation, technology and design.
Our economy is growing now, and the automotive sector is contributing hugely to that growth. Last year, turnover in the automotive industry reached an all-time record, exceeding £60 billion, and was up 9% on the previous year. We have overtaken France, and the UK is now the third largest car producer in Europe, just behind Germany and Spain, producing more than 1.5 million vehicles in the UK in 2013. We have the most productive automotive workers in Europe.
Last July, with the industry we set out a long-term strategy—some hon. Members today reinforced the need for that strategy—for growth and sustainability for the automotive sector in our automotive industrial strategy, which will help to keep Britain at the forefront of the global auto market. We are working closely with the industry, through the Automotive Council and the strategy, to remove barriers to growth when we find them, and to create opportunities across the sector.
An excellent example is the co-operation between the Government and industry on an advanced propulsion centre over the next 10 years and investment of £1 billion from both the Government and the industry to help to research, develop and commercialise the next generation of low-carbon technologies, ensuring that the UK stays at the forefront of the design, development, manufacture and use of ultra-low emission vehicles and in so doing helping to secure up to 30,000 jobs.
The Automotive Council met last week to review developments since the publication of the industrial strategy last year. The advanced propulsion centre is progressing ahead of schedule with a senior team in place and two funding competitions well under way, covering innovation and the centre’s location. The council heard that the first successful collaborative research and development projects will be announced later this month with significant public support. A decision on the location of the centre will be made by the executive in the summer.
On the supply chain, the automotive investment organisation reported good progress with early wins and numerous investment opportunities in the pipeline. On skills, the council noted a successful skills bid to the advanced manufacturing supply chain initiative, and continuing progress on the industry employer ownership pilot bid.
Will the Minister clarify a couple of points about the advanced propulsion centre, particularly the competition around the development of ultra-low emission vehicles? I understand that the budget for that development is £500 million, but it is projected that only £230 million will be spent in this Parliament and there is a question mark about whether any roll-over is anticipated. Will he clarify exactly how much of that £500 million will be spent and how?
I am certainly happy to write to the hon. Gentleman about that. The Government have committed our side of the £500 million funding, but we cannot commit expenditure through and beyond the next Parliament. Perhaps the hon. Gentleman will allow me to write to him about that specific point.
Although there has been recent growth and expansion in the centre, and a lot of positive news, we should not become complacent. There is much more to be done to ensure that the growth we have seen in recent years is sustainable, particularly in building the capability and capacity of the supply chain, and I will turn to that now.
My hon. Friend the Member for South Staffordshire is right in saying that there is much more to do to strengthen the supply chain. Currently, only about 40% of the components of a UK-built vehicle come from a UK supplier, so there is clearly an opportunity for us to capture more of the supply chain. Through the strategy and the council, the Government and industry are working together to boost the competitiveness of the UK’s supply chain growth. We are investing some £129 million to strengthen advanced manufacturing supply chains that will create around 1,400 jobs, and we are supporting a Society of Motor Manufacturers and Traders-led project with £13.4 million of funding to help to improve the competitiveness and capability of 38 automotive supply chain companies.
The sector is also benefiting from Government funding worth more than £56 million for a total of nine AMSCI bids across four rounds of the competition. Between them, the projects aim to create more than 3,700 jobs and to safeguard a further 3,800 jobs. The Automotive Council has identified a potential £3 billion of opportunities for UK-based vehicle and engine manufacturers, where components are currently sourced from overseas.
The sector has also been successful in gaining funding from the regional growth fund, and has secured some £236 million in awards from that funding in rounds 1 to 4. To marry the opportunity with investor appetite, the automotive investment organisation, to which several hon. Members referred, aims to double the number of jobs created or secured in the automotive supply chain through foreign direct investments over the next three years to 15,000, and is currently on target to achieve that. It has had some early wins and has many investment opportunities in the pipeline.
The hon. Member for Inverclyde (Mr McKenzie) asked about the supply chain and what I have been doing to help to promote supply chain events. I have attended and spoken at events in London, Detroit and Milan for suppliers in the Po valley, and I have done the same in Tokyo and Nagoya, where tier 1 and 2 component suppliers already have some interest in the UK. I have been working very hard with UK Trade and Investment, and now the automotive investment organisation, to persuade suppliers to increase their presence in the UK and to do more closer to the prime producers.
Does the Minister agree that encouraging a green supply chain would enable more manufacturers to source in the UK, and to get round what is always put up as an excuse—the idea that EU procurement legislation does not allow them to source as close to home as they would like?
I will certainly consider that and draw it to the attention of the Automotive Investment Organisation. It is an intriguing thought. We are obviously working closely on procurement issues in preparing to help manufacturers here with negotiations under the transatlantic trade and investment partnership with the United States, and we are looking at EU procurement rules in that context.
We know that the industry has concerns about the skills levels in the supply chain, and we share those concerns. To capitalise on the growth of the major manufacturers in the UK, we must tackle those skills gaps, so that we can build a strong UK supplier network. We are providing significant support through the employer ownership pilot. In the west midlands, for example, £1 million will support the Telford manufacturing partnership, led by DENSO, in assisting in pre-employment activities and in upskilling employees. We are working with the industry through the Automotive Council to ensure that we target the next phase of support where it is most needed.
Apprenticeships are at the heart of our approach to improving work force skills. In 2012-13, we supported over 66,000 apprenticeship starts in the engineering and manufacturing technologies sector subject area. Trailblazers are leading the way in implementing new apprenticeships and in helping to design the first apprenticeship standards.
Please accept my apologies, Sir Alan; I was detained on other parliamentary business, so I arrived late for today’s debate. I apologise to the hon. Member for South Staffordshire (Gavin Williamson). Would the Minister like to congratulate Toyota, which is based in South Derbyshire? It has taken on the challenge of expanding its apprenticeship centre, so that it is producing apprentices for the supply chain as well. It is over-extra-supplying in the apprenticeship area, and that is very important for the future.
Yes. That is a very important approach, and I hope that it will be copied more widely.
The Trailblazer group is chaired by Ian Eva, the apprenticeship manager from Jaguar Land Rover, with the involvement of a number of other companies, including Toyota and BMW. Traineeships are another key strand of our strategy to help unlock the potential of young people who are motivated to work but lack the skills and experience needed to compete for apprenticeships and other jobs. Hundreds of employers are already on board, including household names in the automotive sector, such as Jaguar Land Rover and Nissan.
Yes, I will. We need to drive up the quality of apprenticeships, and that is part of what is called the Trailblazer exercise. Those involved will help to draw up the standards, and ensure that there is a rigorous test at the end of the apprenticeship and that we improve the quality of what is on offer.
I turn to what we are doing to support innovation and technology. Our aspiration is for almost every car and van in the UK fleet to be an ultra-low emission vehicle by 2050, with our industry at the forefront of the design, development, manufacture and use of those vehicles, delivering opportunities and contributing to the decarbonisation of road transport. We have made a commitment of £400 million over this Parliament to making the UK a leading market for ultra-low carbon vehicles, and we announced an additional £500 million of capital funding for the period between 2015 and 2020.
To ensure that we maintain our position at the forefront of that technology, as I have said, we have already agreed the investment in the Advanced Propulsion Centre, and we are supporting further innovation, research and development through an £82 million investment up to 2015 from the Office for Low Emission Vehicles through the Technology Strategy Board.
As my hon. Friend the Member for South Staffordshire said, we have great automotive design capacity in this country. Nissan has a cutting-edge European design centre based in Paddington—London, of course, is one of the creative hubs of the world—but with its sister Nissan technology centre at Cranfield and the largest single production plant at Sunderland, we can be proud to say that the latest version of the best-selling Qashqai has been designed and developed, and is being successfully manufactured, here in the UK.
Nissan is not alone in that. Ford invests some £450 million each year in designing, developing and researching advanced gasoline and petrol engines for its global product range at Dunton. Volkswagen spends £200 million each year at its engineering centre at Crewe, which, of course, designs the interior and exterior of Bentley cars. The scale of JLR’s research and development investment places it in the top 10 of all R and D investment in the UK. Some £2.75 billion was invested in 2013-14.
Let me turn to points that have been raised. The hon. Member for Birmingham, Northfield (Richard Burden), asked me about Dunlop. We have been working closely with Dunlop to see what we can do in Government to secure a better outcome for all parties concerned, particularly the Dunlop workers, given the expiry of the lease next year. The company met the Secretary of State for Business, Innovation and Skills recently. There have also been key meetings at official level. We continue to offer our full support to Dunlop. The company has acknowledged that offer of support and will contact officials once the consultation has concluded.
The hon. Gentleman also asked me about the regional growth fund, which I have referred to. It is true that in the first couple of rounds of the regional growth fund, a proper time scale was not in place. I put that in place for round 3. It is in place for round 4, and it will shortly be put in place when we announce the award winners for round 5, so I think we have a more systematic process for looking at the allocations.
The hon. Member for Inverclyde asked me specifically what we were doing to make sure that all this growth was more evenly spread throughout the United Kingdom. It is fairly spread, certainly across England. I recognise the decline of some elements of the Scottish car industry. Industrial policy, of course, is a devolved matter, so the instruments at our command here—the regional growth fund and AMSCI—are not available in Scotland. It has its own separate instruments, but companies from all over the United Kingdom are represented on the Automotive Council, and we work closely through UK Trade & Investment with counterparts in Scotland.
The hon. Member for Hartlepool (Mr Wright) asked me about a number of points. He referred to the partnership with the unions. I, too, would like to place on record the important part that unions have played in the revival of our automotive industry. We saw that in emphatic fashion in the negotiations over Ellesmere Port; it was the constructive partnership—the agreement on more flexible working practices—that made it able to win investment in the face of a competing bid for Germany. I remind hon. Members that Unite is represented on the Automotive Council. It is right that it has its place there, and I, too, pay tribute to the constructive way in which it has worked on a number of the changes that have taken place in the industry.
The hon. Gentleman asked me about the supply chain, but I think I have answered questions about the efforts that we are making to improve supply chain capabilities right across the world.
Finally, let me say that the United Kingdom is now a competitive place to do business. When we came to office back in 2010, the rate of corporation tax was 28%. Yesterday it was 23%, today it is 21%, and next April it will be 20%. Our labour costs are already among the lowest in western Europe. We have an attractive research and development tax credit regime and the patent box. All those combine to make this country an attractive location for innovative industries such as the automotive sector. With the automotive sector investing over £2.5 billion in our country last year, it is very clear that vehicle makers value the UK as one of the best places in the world to do business. Through the Automotive Council, the Government are working in close partnership with automotive companies to continue to improve the overall competitiveness of the business environment, both domestically and internationally.
Thank you, Sir Alan. It is always a pleasure to speak again and to thank everyone, as you so kindly prompted me to, for their contributions.
The debate has shown that, as I said at the start, we are all passionate about this industry, and we all have a clear idea of some of the challenges to it. I have a great feeling that there is an immense amount of consensus on making sure that the industry thrives in future, so that instead of being the third largest car manufacturer in Europe, we will be the largest, hopefully in the not-too-distant future.