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Car Production: Solihull

Volume 652: debated on Wednesday 16 January 2019

Motion made, and Question proposed, That this House do now adjourn.—(Mike Freer.)

Thank you, Mr Speaker. We finally move to the main business of the day. Obviously, it is a great pleasure to follow the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Surrey Heath (Michael Gove), and I am sure that my speech will be just as resounding as his. That fantastic oration is not at all a hard act to follow.

I secured this debate prior to the announcements of job reductions at Jaguar Land Rover in the west midlands. We have unfortunately seen a slow trend over the past year, with a drip, drip of job losses in the Jaguar Land Rover group, but the announcements that have just been made are much more substantial and have brought forward the Jaguar Land Rover development partnership. I know that my right hon. Friend the Member for Meriden (Dame Caroline Spelman) is playing a leading part in that, as well as in the work being done in the House to promote the needs of the UK car industry, and of Jaguar Land Rover in particular. I am sure that all hon. Members, including the hon. Member for Coventry South (Mr Cunningham), will join me in wishing that organisation great success.

I believe that in order to take the right action to support the British car industry, and the towns and families that depend on it, politicians must have an accurate understanding of the real drivers behind the current challenges, and not allow this issue to get caught up in the arguments over Brexit, for example. I therefore want to use my speech to set out why Jaguar Land Rover is so important to Solihull and the wider west midlands economy and the real reasons behind its current difficulties. I shall also set out my recommendations for what Ministers can do to support this crucial industry.

Solihull is rightly proud of that the fact that it is one of Britain’s great manufacturing towns. It is home to some of our country’s most popular global brands and, as I said in the House the other day, it is one of only a few constituencies to enjoy an actual trade surplus in goods with the European Union. As a consequence, thousands of local residents are employed in those industries, including at the JLR plant at Lode Lane, and they have played a big role in shaping the character of our town.

I congratulate the hon. Gentleman on bringing forward this debate and I understand his reasons for doing so. It is also good to see other Members with a particular interest in the matter here in the Chamber. A similar situation in Northern Ireland is the Bombardier issue. Does he agree that consideration must be given to bringing work back from foreign plants—such as Slovakia in the case of Jaguar Land Rover—and to keeping jobs here in the United Kingdom? This is what should be happening with Bombardier. Does he agree that the Government should be looking at incentives to encourage the retention of jobs in the big manufacturing bases here in the United Kingdom?

I thank the hon. Gentleman for his intervention. The way to bring jobs into the UK is to create a business environment in which investment can flourish, and that is basically the point of my speech.

I congratulate the hon. Gentleman on securing this timely debate. He is right that not a lot can be said about the meetings we have had with Jaguar Land Rover, because that information is confidential, but Jaguar Land Rover is in a totally different situation from Bombardier. We want to support the hon. Gentleman, as he knows, in ensuring that Jaguar Land Rover goes on to create more jobs, and I am sure that he will want to touch on the question of the supply line. I have had a number of letters from small companies that are a bit concerned about the situation, although we have had some reassurances and there will be further discussions. I wish the hon. Gentleman all the best.

I thank the hon. Gentleman for his intervention. I wonder whether he has seen my speech, because I am just about to mention Jaguar Land Rover’s successes, which are manifest. I mentioned employment at the start of my speech, and the reality is that we have gone back to the situation that we were in in 2016.

I congratulate my hon. Friend on securing this important debate. I have a feeling that I know what he is going to say, and he will have huge and strong support from my constituents in the royal town of Sutton Coldfield due to Jaguar Land Rover’s critical importance in our region.

I thank my right hon. Friend for his intervention. I know for a fact that many people who work at Jaguar Land Rover live in his constituency, and the royal town of Sutton Coldfield is a close partner with Solihull in many respects, so I welcome his comment.

JLR faces serious challenges, but it is important not to allow them to eclipse what is still an encouraging picture overall. In 2010, it employed just 12,000 people in the UK. However, even after the latest reductions, it will still employ over 38,000 workers across the country, including 10,000 in Solihull—a more than threefold increase nationwide. The past eight years have also seen substantial revenue growth, from £6 billion a year to £25 billion a year—a more than fourfold increase. Over the past five years, JLR has invested some £80 billion in the UK, which is basically the same as the defence and education budgets put together. It is an enormous investment, and a further round of investment was announced alongside the job news last week.

Overall, the UK continues to enjoy the most productive automotive manufacturing sector in Europe, and productivity remains about 50% higher than the British manufacturing average. In short, Solihull remains a great place for British manufacturers and exporters, and I will do everything I can to help them succeed as part of the new Jaguar Land Rover development partnership, to which I will return later.

We must ensure that the details of this important issue are not confused or obscured. There is no doubt that our relationship with the European Union is a matter of serious concern to JLR and every other manufacturer that depends on international just-in-time supply chains, but JLR’s management has been clear that the driving forces behind the current reductions are twofold: a serious fall in demand in China and a slump in demand for diesel cars in the aftermath of the Volkswagen emissions scandal. Exposure to downturns in foreign markets is part and parcel of being an exporter, but the second reason—the fallout from the VW emissions scandal—is a problem made in Wolfsburg that is threatening jobs and investment in the UK.

For years, Governments of both parties encouraged Britons to buy diesel and, by extension, encouraged British car makers to service that need. According to Professor David Bailey, more than 90% of JLR’s domestic sales are diesels. But after Volkswagen was found to have been fiddling its emissions scores, we suddenly saw a scramble to be seen to crack down on diesel, which has had predictable results. Jaguar sales are down 26% so far this year, and that pattern has been repeated across the UK car industry, where overall diesel registrations have plunged by a third since January to March 2017.

Respected economists from the Centre for Economics and Business Research have shown that such policies are hugely detrimental to the economy. Many such policies also fail to account for the huge differences between old-fashioned diesel engines and so-called cleaner diesel alternatives of the sort manufactured by Jaguar Land Rover in my constituency. Those cars are just as clean as petrol alternatives. In fact, What Car? recently named a diesel as its car of the year, saying that it combined the low CO2 for which diesels are known with lower NOx output than many petrol alternatives. What is worse—this is perverse in many respects—many people are now switching to petrol without realising that they could be buying a more polluting vehicle than the diesel that they could have bought instead, perhaps at a good discount.

I congratulate my hon. Friend on securing this debate. He is doing a great job of trying to rehabilitate the truth about new diesel engines, which will help to justify the huge investment that both JLR and the Government have put into developing them. I hope that this debate will help to disabuse people of the myths about the differences between petrol and diesel.

I was recently diagnosed as asthmatic, which, for someone who cycled up mountains less than two years ago, is a frightening and life-altering experience in many respects. I am very conscious of the fact my right hon. Friend raises, but we need to get it right so that we do not end up ensuring that older polluting diesels are kept on the roads longer because people are afraid to change them as they will lose money. We need to encourage people to transition to new technology, but at the same time, we need to fill that gap with cleaner diesel until the capacity is there.

I thank the hon. Gentleman for bringing this important and timely debate before us. Having worked with him and other colleagues on the automotive industry and Jaguar Land Rover, I know he shares my passion.

I think the hon. Gentleman agrees with me that the transition he describes is critical and that the Government must work with manufacturers to ensure that we get a co-ordinated, managed transition away from diesel and petrol towards cleaner fuels. Will he speak about diesel taxation and how we should not penalise consumers but support them in the transition? That would particularly help Jaguar Land Rover.

The hon. Gentleman has put his thoughts on the record. He is correct about the transition, and we cannot ask car manufacturers to move at pace to those new technologies and then take EU policy that could potentially damage the income streams that allow them to invest. We need to be nuanced and thoughtful about that while protecting our environment.

My hon. Friend is making some excellent points. Jaguar Land Rover has invested a huge amount of money in south Staffordshire, on the border with Wolverhampton, precisely to build those engines at its engine plant. That has brought huge numbers of excellent job opportunities to both Wolverhampton and Staffordshire. Will he join me in paying tribute to its foresight on those clean engines?

I certainly will, and I know the impact that investment has had on my hon. Friend’s local community and on the wider west midlands economy. Those jobs are fantastic. The pay is much higher than the national average wage, which creates jobs in the local economy through the multiplier effect. They are jobs that we have to keep and develop. The key word is “transition.”

I am conscious of time. Sorry.

Jaguar Land Rover has announced that all new models will be electrified from 2020, and I have no doubt that other manufacturers will follow suit. It is a simple fact that we do not yet have the infrastructure to handle a wholesale shift towards electric vehicles in the near future.

As I told the House during the passage of the Automated and Electric Vehicles Act 2018, the current capacity for public charging points does not come close to that provided by traditional filling stations. It will take time to put the necessary infrastructure in place and, until it is ready, our environmental goals are best served by encouraging motorists to switch to cleaner, modern vehicles of all types before we get rid of the internal combustion engine by 2040.

As the MP for a car-making town, and as a former chairman of the all-party parliamentary group for fair fuel for UK motorists and UK hauliers, I am grateful for the Government’s proactive approach to the sector. The previously mentioned sector deal is welcome, and I am proud to have the opportunity to serve on the new JLR development partnership, which will give the company, firms in its supply chain, trade union officials and others the opportunity to liaise directly with the Business Secretary, the Mayor of the West Midlands and other local politicians.

I also note the £500 million investment in the new advanced propulsion centre, which is intended to research, develop and industrialise new low-carbon automotive technologies, and in other initiatives such as the Faraday battery challenge and the supplier competitiveness and productivity programme. The car industry has proven itself more than willing to collaborate with Ministers in this field, match-funding not just the advanced propulsion centre but also another £225 million for R&D investment.

We face a period of economic uncertainty, especially for exporters, as we negotiate our future relationship with the European Union and start to pursue our own independent trade policy. It is vital to the wellbeing of constituencies such as mine and the entire British economy, not to mention the Government’s own long-term environmental and technological ambitions, that we do everything we can to offer stability and certainty to companies such as Jaguar Land Rover. Only then will they be able to make the investment needed to protect jobs, drive growth and make our eventual transition to electric cars a reality.

I congratulate my hon. Friend the Member for Solihull (Julian Knight) on securing this debate, although I must confess I am a little disappointed because, when I came into the Chamber, I saw lots of people, who I thought had come to listen to this debate. I thought, “Perhaps it is because of Jaguar.” Jaguars are known as “supertoys” by many people. Members may aspire to owning them and I can strongly recommend them. I have had a little indication that Madam Deputy Speaker may have a product manufactured by this company. So if representatives from the company are listening, I can say that we do have her endorsement.

And indeed myself, although not at taxpayers’ expense. In addition, it is not a “supertoy”; it is a more modest model.

Tonight’s subject is very important and I wish to thank other Members who have contributed. Jaguar Land Rover has an excellent group of MPs in the area, and I was pleased to meet them last week to discuss the announcement that was made. [Interruption.] I see the hon. Member for Warwick and Leamington (Matt Western) shaking his head. I do hope I have not affronted him if I have not met him—most Members were there. If I have, I really apologise and I will make sure he is always invited.

If the hon. Gentleman was not invited, I would like to apologise to him. This was all done at the last minute. I will meet him whenever he likes, either informally or in a meeting with officials. The point I was making is that JLR is a cross-party matter, and it is treated in that way by the Government and by the company.

In the time we have, I wish briefly to outline the steps the Government have taken since JLR announced last Thursday that it will reduce its global workforce by about 4,500 people. I will then move on to address the arguments put forward by my hon. Friend the Member for Solihull. As he highlighted, the UK automotive industry remains one of our great success stories, and global demand for UK designed, engineered and manufactured vehicles is strong. Our industry is regarded internationally as very productive. Our industrial strategy builds on these strengths and invests in the future, to put the UK at the forefront of the next generation of electric and autonomous vehicles. JLR is a key part of our automotive manufacturing base, supporting high-quality jobs, both directly and across the automotive supply chain.

As my hon. Friend noted, last Thursday, Jaguar Land Rover confirmed that it is offering voluntary redundancy packages to its UK workforce, to reduce the headcount. As this is a voluntary redundancy programme, the company cannot give any figures on the number of Solihull workers who might be affected. However, JLR has made it clear to us, in a call that the Secretary of State and I had with its chief executive just before the announcement, that those working on production lines are not part of this programme; this predominantly relates to marketing and management staff. I do not make light of that; these people will be made redundant—we hope it will be with their agreement—and what job they do does not particularly matter. He also stressed to us that the apprenticeship programme, which has been supported so well by my hon. Friend and other local MPs, will continue, as will graduate recruitment and the recruitment of specific staff that the company needs.

The decision to offer these redundancies is the next phase of a £2.5 billion “Charge and Accelerate” turnaround plan, which the company announced last September. As I say, I have spoken several times to the chief executive and he has explained how these redundancies will streamline the business and help to ensure the company’s long-term health for the future. As I say, I do think a lot of every member of staff and their families, who face an uncertain time. I assure the House that we are working closely with colleagues throughout the west midlands to offer whatever support we can.

We are also working to support the company itself. We have a long-standing relationship with the firm and its parent company in India. Since the turnaround plans were announced last September, we have worked even more closely with the company in support of its long-term strategy as it invests and transitions to autonomous, connected and electric vehicles.

First, one of the important factors here is that the development of the electric vehicles takes place at Whitley in Coventry. Secondly, the Minister might want to think about whether a scrappage scheme would help the situation. I do not know—it would have to be put to the company—but it struck me as something that we should perhaps think about and explore to help the company. Thirdly, as my hon. Friend the Member for Warwick and Leamington (Matt Western) said, there is the issue of taxation. Lastly, when we talk about the labour force, it is important to remember that a lot of the labour force bought houses, certainly in my constituency and others, so we have to do as much as possible to help them if they run into difficult situations with, for example, mortgages.

I thank the hon. Gentleman for his intervention. He was at the meeting last week and I know that, like other Members, he spends a lot of time with Jaguar. Let me go through his points briefly. I must confess that I have not thought about a scrappage scheme, but I am happy to do so now, as he suggested. I will come to the matter of taxation and the electric vehicles later in my speech.

I was just about to confirm that Andy Street, the Mayor of the West Midlands Combined Authority, and the Secretary of State convened the Jaguar Land Rover development partnership, which brought together the company and local MPs, including my hon. Friend the Member for Solihull, whom I thank for having come at short notice. Other local MPs were invited and I hope that, although I might have missed him out from my meeting, the hon. Member for Warwick and Leamington was not missed out from that one. I was not there, in case there was an urgent question in the House on the subject; somebody had to be here to deal with it. I do not know whether I drew the short straw or the long one, but I intend to be there in future. It is a part of my responsibilities that I look forward to taking up. Also present were trade union representatives, trade bodies, local government and almost anyone who we felt was relevant and could be invited. The partnership is a continuing group. It heard from chief executive Ralf Speth about the significant investment that Jaguar Land Rover continues to make in the UK. He gave many examples of how the company is investing in the future, including in Solihull.

I accept the point that the hon. Member for Coventry South (Mr Cunningham) just made about working families throughout the UK, not just in his Coventry constituency—

The hon. Gentleman certainly did. The lives of people throughout the UK are affected. As my hon. Friend the Member for Solihull said, these are not just jobs: they are well-paid, highly skilled, well-respected jobs, and long should they continue. Jaguar Land Rover seems positive about the future. Last week, I met Steve Turner, one of the trade union representatives, and I have to say, without betraying Steve’s confidence, that I asked him what the management is really like—I have dealt with the chief executive and so on—and he said it is absolutely very good. I believe that, and I think everyone involved has confirmed that, so I am confident for the future.

Let me turn to the specific points. Jaguar has confirmed that the next-generation electric drive units will be produced at the company’s engine manufacturing centre in Wolverhampton, from later this year. The units will be powered by batteries assembled at a new JLR battery centre located at Hams Hall in Birmingham. That clearly reinforces the company’s commitment to the west midlands.

Over the past year, Jaguar Land Rover has announced investment in its key plants in Solihull and Halewood, to build the next generation of models, including electric vehicles. For Solihull in particular, in June 2018 the company announced hundreds of millions of pounds of investment in a technology upgrade to accommodate the next generation of flagship Land Rover models. Hopefully—this is certainly the intention—that will future-proof the site.

We are determined to ensure that the UK continues to be one of the most competitive locations in the world for automotive and other advanced manufacturing. My hon. Friend mentioned the automotive sector deal, which was published just over a year ago. The Government are working with industry to invest in the future. This includes a £1 billion commitment over 10 years through the Advanced Propulsion Centre, which is very impressive. Jaguar Land Rover has benefited from this support; most recently as part of a £4.4 million project through the Advanced Propulsion Centre, and a £11.2 million one through the connected and autonomous vehicles intelligent mobility fund.

I now want to turn to other arguments made by my hon. Friend. As he rightly points out, while Jaguar Land Rover has had great success over the past decade, the number of challenges facing the company are significant. Falling sales in China has been a major factor and it has had an impact on many global automotive companies. In addition, the broad trend of declining consumer demand for diesel has had an impact.

I make no apology for the Government’s bold vision on ultra low emissions vehicles, which we set out in our road to zero strategy. I am sure that, in the long run, Jaguar will be a major beneficiary of that strategy, as, of course, will be the environment of this country, Europe and, I hope, the world. We want to be at the forefront of this and aim for all new cars and vans to be effectively zero emission by 2040. Hopefully, by 2050 and beyond, every car will be zero emission. I agree with the critical point made by my hon. Friend: diesel plays an important role in reducing CO2 emissions from road transport during the transition and it will continue to have an important role for years to come. We need to be clear on this point, both in our own minds and in our communication with industry, and I believe that we have been.

The Government’s road to zero strategy is clear that diesel, particularly the new generation of diesel engines, is a perfectly acceptable choice environmentally and economically. For those Members who are not familiar with this document, I suggest that they look at it. There has been much talk of the Government playing a role in destroying diesel and talking it down.

I am really encouraged by what the Minister has said in that regard. The reality is that the collapse in diesel is a Europe-wide issue; we know that. It is just that we need this nuance—this idea that cleaner diesel does play a role—shouted from the rooftops, provided that the industry can show that this clean diesel does not harm the environment.

I do not have it within my power to shout from the rooftops, but I will shout from this Chamber for those people who are listening. The new clean diesels are really, really good. I confess to having a penchant for this particular kind of vehicle.

I thank the Minister for being so generous with his time. Let me return to this important point. He is speaking about shouting from the rooftops. Perhaps the most critical point to shout about is taxation. I appreciate the points that have just been made by the hon. Member for Solihull (Julian Knight). There is a global issue, as we have seen in north America and across Europe, on diesel, but it is in the Government’s gift to change taxation and not to penalise. The maximum vehicle excise duty addition that was put in was £560 on a vehicle.

I am bursting to respond to the hon. Gentleman’s point, but I have two minutes left, Madam Deputy Speaker, and I do not want to torment your time—well, you will not let me; you would tell me not to.

My hon. Friend made the same point. I am pleased to remind the House that, on 19 December, the Treasury published a review of the impact of the worldwide harmonised light vehicles test procedure on vehicle excise duty and company car tax. The review is open until 17 September[Official Report, 21 January 2019, Vol. 653, c. 2MC.]. Officials from the Department have been working closely with Jaguar Land Rover and others to ensure that the industry’s evidence is considered in the review and I look forward to the outcome.

I congratulate my hon. Friend. He really is a major spokesman for the company, together with his colleagues,. This debate is but a small part of the work that he does. My door is always open to him and to the company. I look forward to a great future for Jaguar Land Rover, and I know that the west midlands will be a key part of that.

Question put and agreed to.

House adjourned.