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Dagenham Diesel Engine Production

Volume 639: debated on Friday 27 April 2018

Motion made, and Question proposed, That this House do now adjourn.—(Chris Heaton-Harris.)

It is good to see you, Mr Deputy Speaker.

I rise to make the case for modern diesel engine production at the Ford Dagenham plant and to support the men and women who work there. The Dagenham plant has a proud history. It was built in 1929 and proved vital to our war effort. The factory was turned over to producing Bren gun carriers, vans, Army trucks and winches. It produced 34,000 Merlin aero engines and 95% of British tractors.

Post-war employment at the plant peaked at some 40,000 workers in 1953. The plant doubled its capacity in 1959, becoming the biggest factory in Europe. Unfortunately, vehicle assembly stopped in 2002, by which point nearly 11 million cars, trucks and tractors had been built at the plant. The decision was made to diversify into diesel technology—this move was very much in line with Government industrial and environmental strategy at the time. The Dagenham Diesel Centre, where the engines are both designed and manufactured, was opened by Tony Blair in 2003. Today, Dagenham produces 1 million engines annually, which is more than 50% of Ford’s global diesel requirement. The engine plant and the diesel centre cover some 2.5 million square feet. We have nearly 1,800 engine plant employees, plus 650 in transport operations and 600 other contractors —this makes more than 3,000 in total.

I congratulate the hon. Gentleman on securing this important debate, and what he is saying rings a bell. In Solihull, we have just lost 1,000 diesel engine jobs. Does he agree that cleaner diesels are much less polluting than petrols and that the potential targeting of these vehicles by some councils with so-called “pollution charges” is wrong-headed?

I support precisely what the hon. Gentleman has said; indeed, I was going to mention those 1,000 job losses and cover some of the issues he has raised in my remarks.

The number of 3,000 at the Dagenham plant sits alongside 1,500 UK engineers dedicated to the development of Ford’s latest and future clean powertrain technology. The total turnover stands at some £1.75 billion. Dagenham is a strong export story for this country, as 89% of these engines leave our shores, and customers include Jaguar Land Rover, Peugeot, Citroen and Fiat. In 2014, Ford invested £490 million in the next generation of clean diesel engines, specifically designed to meet the new Euro 6 emissions standards. The engines will also satisfy Transport for London’s ultra-low emissions zone. All Dagenham diesel engines will comply with the next phase of Euro 6 emissions standards—these will include “real driving emissions” requirements, not factory-based testing. Put simply, the plant is at the cutting edge of diesel technology and produces engines that comply with the most stringent emissions standards on the planet.

Today, however, there is a crisis of confidence in diesel vehicles and diesel technology, with many arguing that we are witnessing the demonisation of the technology. In the current climate, there is little or no separation between old and new diesel technology: between dirty engines and state-of-the-art diesel technology. If this is allowed to continue, it will have disastrous consequences. Yesterday, it was widely reported that the number of cars built in UK factories in March fell by some 13%. The current debate—or, rather, panic—lacks both facts and nuance. The danger is that this will lead to unfair criticism of the engines built in Dagenham; will threaten many thousands of high-quality jobs in my constituency, and in others across our economy and our country; and will undermine the managed transition to 2040 and a world beyond the combustion engine.

So today I speak up on behalf of Dagenham diesel engine production. Over the past months, I have been in talks with the company, the unions the Mayor’s office and council leaders, and we all stand united on the need for new arguments for modern diesel—to push back against some of the current hostility to this technology—and to make the case for the Dagenham plant and the managed transition to 2040. This is not about defending the indefensible in terms of the older engines, which, paradoxically, the present debate might simply ensure stay on our roads for longer; it is about arguing for the most efficient modern diesel technology. Today I am just asking the Government to join this new partnership to push back against the demonisation of diesel.

In truth, Volkswagen has not done us many favours. Diesel appears to have become a dirty word since it emerged that Volkswagen had cheated regulators and misled customers by using software to suppress nitrogen oxide emissions during testing. In 2015, VW admitted it had fitted “defeat devices” in some 11 million of its cars worldwide, with about 1.2 million of those being in the UK. This cost Volkswagen £22.5 billion. What worries me is the collateral damage now being played out across the whole sector.

Today, there is a real danger that Britain’s auto industry is on a cliff edge, with collapsing sales of diesel and the loss of thousands of manufacturing jobs and dealerships. Consumer confidence is vital and Government have a key role to play in that. In Dagenham, for example, plans to recruit for 150 new jobs in 2017-18 were shelved due to the fall in demand. Over the past few weeks we have heard more bad news, with Vauxhall revealing plans to slash UK dealerships, Nissan preparing to cut hundreds of jobs due to falling demand, and, as we have heard, Jaguar Land Rover cutting 1,000 jobs as it seeks to offset falling diesel sales. European diesel share continues to decline, now at 33% of sales compared with 50% in 2011.

I congratulate the hon. Gentleman on securing the debate, which is very relevant to me. In my constituency, we have a large company called Delphi Diesel Systems, and we will lose 500 jobs in Sudbury. It points to precisely what he is talking about—the forecast falling demand in Europe because of the much tougher measures that are being introduced. To an extent, I accept some of that, but my concern is that if that is going to happen, we need to see the strongest possible strategy from the Government—much of which we will see, I think—to support the new technology and ensure that investment goes into plants such as his and mine and those all around the UK.

That shows the cross-party agreement on some of the points I am making today. The trouble is that in the UK, Germany, France and Spain—the markets where anti-diesel rhetoric is highest—diesel consumption is declining fastest. Sales of diesel cars have slumped as regulators and politicians announce plans for bans, levies and additional taxes in many cities.

In truth, we in Dagenham fear that diesel has become a bit of a political football. In 2001, Gordon Brown introduced a new system of car tax aimed at protecting the environment—a sliding scale to make it cheaper for cars with lower CO2 emissions. That helped stimulate a dash for diesel after its introduction in 2001 and its extension in subsequent years. There are now some 12 million diesel cars on British roads, while back in 2000 there were only 3 million.

In recent years, diesel has accounted for around half of the new car market. In 2000, by comparison, only one in seven new cars was a diesel model, yet following a 2017 BBC report on the dangers of diesel, the Environment Secretary jumped into the debate to make political capital:

“The dash for diesel was pursued under a Labour government…This is yet another example of a Conservative government having to clean up Labour’s mess…We are taking action…ending the sale of new diesel and petrol cars and vans by 2040.”

Political game playing should have no role, given the challenges facing the sector, as reflected in the comments made by colleagues across the House today.

Since the 2015 VW revelations, cities have taken the lead over national Governments. Berlin banned the oldest, highest-polluting diesel cars from its centre, Paris, Madrid, Mexico City and Athens have said they plan to ban diesel vehicles from city centres by 2025, and Sadiq Khan ordered the replacement of the capital’s diesel bus fleet and enforced a £10 toxicity charge, or T-charge, on the highest-polluting cars as of October. The measures are part of a wider plan to create an ultra-low emissions zone in central London from April 2019. I do not dispute the push back against older diesel vehicles—it has to be the right way to proceed—but the danger is that we throw the baby out with the bathwater and fail to challenge the wholesale demonisation of the technology.

The hon. Gentleman is being very kind in giving way. He talks about older diesel, but actually this is about very recent diesel—my own diesel, for instance, is from 2013. It has fallen in value by 70%, which will probably mean that it is more sensible to run it into the ground, effectively meaning that a more polluting car will stay on the road.

That is precisely the point that I will make, and I totally agree with the hon. Gentleman about the paradoxes that create incentives to retain older, dirtier diesel technology on our roads, resulting in great harm to our economy, possibly to our future consumers, and to British workforces.

Given all this, what do we actually know? Overall, the CO2 emissions of a diesel car tend to be lower, diesel fuel contains more energy per litre than petrol and diesel engines are more efficient than petrol engines, especially in rural environments. Modern Euro 6 diesel cars are the cleanest in history: they capture 99% of particulates and emit 84% fewer NOx emissions than in 2000. So, we know that new diesels do not compare to the older ones.

We also know from data from the Society of Motor Manufacturers and Traders that average CO2 emissions from cars sold in 2017 were higher than in 2016, reversing a near 20-year decline. They blame that increase on the demonisation of diesel since 2015, which means that we cannot take for granted the progress made in reducing CO2 emissions since 2000. We are heading in the wrong direction, as diesel sales have fallen by 37% since last year.

Mike Hawes, SMMT chief executive, criticised the autumn Budget, which increased taxes on sales of new diesels. He commented that people were concerned about these tax increases and were

“holding off buying new diesel cars because of the confusion and that means older, dirtier diesels are staying on the roads.”

That is precisely the point made by the hon. Member for Solihull (Julian Knight).

Nick Molden, chief executive of testing company Emissions Analytics, agreed that, rather than impose higher taxes on new cars, the oldest cars and dirtiest diesel cars should be targeted instead. His company’s real-world driving tests has shown that some of the newest diesels produced less pollution overall than petrol vehicles. He said:

“The most efficient diesel engines continue to improve while some of the worst remain on the market, meaning the confusion for consumers increases rather than diminishes. Diesel sales are falling as a result, and this may lead to cities and governments over-compensating and restricting diesels more than is justified by our evidence. The danger is that motorists who bought genuinely clean diesels—together with the manufacturers who made them—suffer the consequences of the general confusion and loss of confidence.”

I know that the Government recognise the need to act quickly to improve the UK’s air quality, but they must also accept that we cannot do so at the expense of increasing our carbon dioxide emissions. Surely, therefore, the most effective way to achieve both aims is by encouraging consumers to adopt new technologies or to update to the cleanest specifications. Clearly modern diesel has a role to play here, and, with help, we can get the old diesels off the road. For example, Ford’s “new for old” scrappage scheme enables drivers to trade in any passenger car or commercial vehicle registered before 1 January 2011. It guarantees to take every pre-2011 vehicle off the road permanently by scrapping them.

Modern Euro 6 diesel cars are the cleanest in history, and the latest generation of diesel engines have a crucial role to play in improving air quality and reducing CO2 emissions, particularly in the commercial vehicle market. London is facing a challenge in its air quality, and it is here in London that we make the latest Euro 6 diesel engines—just down the road in Dagenham. These engines comply with the world’s toughest ever real driving emissions standards. Recent correspondence with the Mayor of London has confirmed that he gets this and that he supports the modern case for Dagenham.

Dagenham-built engines are powering the UK’s best-selling and cleanest ever Transit commercial vehicles and developing the next generation of commercial vehicles. Today I make the case for Dagenham modern diesel technology. We have to push back against the demonisation of diesel. As have I said, the Mayor of London is responding positively, and I ask for the Government’s support in making the case for Dagenham diesel. To date they have been too quiet, thereby endangering the country’s industrial performance and the lives of my constituents. This is about planning for the future. The combustion engine will not last forever. I want to help transition the Dagenham plant to embrace future technologies, but to do so we require stability today and in the near future, and that has to be based around the most efficient diesel technology ever produced.

Speaking of the future, Ford has announced a global investment of some $11 billion to produce 40 different types of electrified vehicle by 2022. We all need to secure Dagenham’s future by transitioning into new technologies—a future beyond both petrol and diesel. To do that, we need to resist the wholesale demonisation of technologies and make the case for modern diesel.

Let me put this simply. We have made significant progress recently in reducing CO2 emissions. The danger is that, in the current climate, we will panic, hit the rewind button, ignore the facts, harm our economic base and undermine a successful transition to the technologies of the future. Dagenham has as much of a role to play in our industrial future as it has in our past, and the Government have a role in helping to secure that future. I ask for their help today.

May I start by congratulating the hon. Member for Dagenham and Rainham (Jon Cruddas) on securing a really important debate, the subject of which is very much front and centre of the discussions that we are having with industry and with colleagues across the parties? We are all trying to deal with the conundrum of how we move to a lower-emission, cleaner-air future without causing harm to an industry that, as we know, has been hugely successful.

I share in and amplify the tribute that the hon. Gentleman paid to the men and women of the Dagenham plant. The industry employs 170,000 people, who have delivered a highly productive sector and good industrial relations. Its exports in 2016 were the highest we have ever seen, and of course we absolutely want that to continue. As the hon. Gentleman said, Ford has been a good partner to the UK through times of peace and war, and remains an absolute cornerstone of our automotive landscape.

I also pay tribute to my hon. Friend the Member for Solihull (Julian Knight), who spoke up for his constituency, my hon. Friend the Member for South Suffolk (James Cartlidge), with whom I have discussed this issue many times, and my hon. Friend the Member for Daventry (Chris Heaton-Harris) who cannot speak here, yet speaks up so eloquently for his constituents in Daventry. A really important group of people have come together today.

I want to provide some reassurances and a sense of where we are going in the future. This is a concerning time. Auto companies right across the country ask us, “What does this future transition look like?” Of course, the engines made at the plant in the constituency of the hon. Member for Dagenham and Rainham are almost all destined for export; they go into Transits that I believe are assembled in Turkey. There is a Europe-wide question about the future.

It is right that we are working really closely with the industry through the Automotive Council and the company. The Secretary of State and the Prime Minister have met senior management regularly to understand the future strategic direction that the company sees itself taking in the UK. We want to reassure the company that, as well as the technical transition that I will discuss later, the Government are really working with the industry in a way we have never seen before, through the industry strategy. We are co-investing with industry through, for example, the Faraday challenge to ensure that we take a leadership position in new technology. We are also working out what more we can do on a research and development basis to go forward together.

Ford has demonstrated time and again its commitment to manufacturing in Britain by regularly upgrading its investment. It is quite right that we use opportunities such as this debate to reassure the company and the hon. Gentleman’s constituents that we understand this transition and that we are not trying to demonise diesel. I will explain that a little more later.

We have set out our aspirations in the clean growth strategy for a lower-carbon future and in the clean air proposals that the Secretary of State for Environment, Food and Rural Affairs is bringing forward, because it is clear that we have to tackle this problem in a sensible way. The dash for diesel that the hon. Gentleman mentioned was encouraged by the scientific evidence at the time, but it has resulted in some consequences, particularly in the least well-off parts of the country, where there are unacceptable air quality issues in playgrounds and gardens and on balconies. It is absolutely right that we work out how to create cleaner air for our families and children, and the hon. Gentleman mentioned work that is being led locally on that.

It is right that the Government continue to be on the front foot in their support for ultra-low emissions vehicles. The hon. Gentleman mentioned the Budget, in which the Chancellor announced the plug-in car grant, investments in electric vehicle charging infrastructure and the £246 million that the Government are making available over four years to co-invest with industry so that we can own and create the best manufacturing base for where the world is going, which is towards having a fleet of ultra-low emissions vehicles. This country does not want to be making the last diesel engine ever sold in Europe. We want the men and women of the Dagenham plants and plants around the country to have the investment and skills to lead the manufacturing of a new generation of cars. Of course, we already make one in five electric vehicles sold in Europe.[Official Report, 2 May 2018, Vol. 640, c. 3MC.]

The 2040 target—to have no new vehicles on the roads that are not ultra-low emissions vehicles—was carefully discussed and delivered with the industry to give it sufficient time to adapt and to make the transition calmly. We have committed substantial funds to future technology, but we are equally committing funds to the current technology. For example, we have committed more than £1 billion to the Advanced Propulsion Centre over 10 years. As the hon. Gentleman says—he may be a right hon. Gentleman, so I hope he will forgive me if I have got that wrong—this is about how we adapt to the diesel engines of today. [Interruption.] Well, perhaps he will be a right hon. Gentleman one day.

This is about how we invest, within the guidelines that the EU has rightly brought forward, to create the next generation of much cleaner diesel. The point was made that this needs to be tested in a real-world environment. My concern is that consumers have lost confidence in diesel because they sometimes feel that the companies have not been straight with them about emissions. It is right that we have a medium-term investment strategy to create the lowest possible emissions from diesel engines, but we must also work with the industry to migrate these engines in the future.

Since we put in place the 2040 target and made it clear what we think the direction of travel is, we have had a whole series of positive announcements from auto companies in the UK that are reaffirming their commitment to manufacture here. PSA-Vauxhall said two weeks ago that it is going to reinvest in the Luton plant to build the Vivaro from 2019. Toyota announced in February that it is going to build the next-generation Auris at the Burniston plant. Nissan says that it is going to spend half a billion pounds in Sunderland to secure the future of the factory there. BMW has chosen Oxford as the place where it is going to manufacture its electric Mini.

We have seen a very big and ongoing increase in automotive investment. From working with the industry and representatives of the Automotive Council, it is clear that these companies understand, both in Europe and globally, that the world is going towards a much more low-emissions future, as is absolutely right. I would submit that we are probably one of the most front-footed Governments in working with industry to drive this transition. Again, I refer to the investments we have made through the Faraday challenge and in the Advanced Propulsion Centre.

To give the hon. Gentleman some reassurance, there is no demonising of diesel. There is a calm reflection that ultimately we have to phase out polluting fossil fuels over several decades, giving companies time to plan their models and invest in their production lines. He is right to pay tribute to the workforce—the men and women who work so hard in these factories and have delivered a superb success for British manufacturing —and I join him in doing so. People who say we do not make things here should go and visit the auto plants in his constituency, or the plants in Swindon near mine, to see what the workforce has delivered. We want those jobs to be maintained. We want this investment to continue. Ultimately, we all want that to result in cleaner air for our children and our grandchildren in future.

Question put and agreed to.

House adjourned.