The UK’s car industry risks falling behind other countries if the Government does not adopt a “coherent, modern industrial strategy”, Labour has said.
Shadow business secretary Jonathan Reynolds’s warning came as analysis by the Labour Party showed that a third less vehicles are being made in the UK now than in 2010.
Mr Reynolds opened a Labour-led debate in the Commons by calling on ministers to “adopt an active industrial strategy to build the battery factory capacity needed to secure the automotive sector for decades to come”.
He said: “I would simply say that all countries do need an industrial strategy, and if we go back to the example of Nissan, that was part of an explicit strategy even by Margaret Thatcher’s government to attract foreign automotive expertise to the UK.
“The absence of any coherent modern industrial strategy is hurting investment into the UK. Other countries are simply pushing ahead, recognising that the challenges we are facing have to be met nationally by governments with some skin in the game.”
He added: “I feel it is not so much that the Conservative Party has turned up to a gunfight with a knife, it is that they are not even showing up to the fight at all.
“What we need is a plan of action, and that is what we have developed and that is what we want to get the chance to do should we form the next government.”
Figures from the International Organisation of Motor Vehicle Manufacturers showed that the UK industry produced a total of 1,393,463 vehicles in 2010.
In 2022, this had fallen to 876,614, a decrease of 37%, according to Labour.
The party claims its plans for the sector would create 80,000 jobs, power two million electric vehicles and add £30 billion to the UK’s economy.
Mr Reynolds also told the Commons: “Support for the automotive sector is not nostalgia, and many of the plants that we will talk about in the day today are the lifeblood of their communities, providing good work and good wages.
“But just as with some other crucial industries, steel would be another good example, I get no sense that securing the long-term future of the sector and managing the transition to a low-carbon economy are priorities for this Government.”
Business minister Nusrat Ghani said Mr Reynolds had delivered a “disappointing speech”, saying: “When we had an opportunity to praise, to promote and protect the automotive sector, all we heard was the automotive sector being talked down for the last 10 or 15 minutes.”
She added: “Just today we heard about the Renault Group and Geely having chosen the UK as the headquarters of a new company developing ultra-low-emission engines, potentially investing billions of pounds into the UK.
“This shows you not only the confidence but the commitment that the automotive sector has to the UK.”
The EU’s rules of origin are due to be introduced in January 2024, which stipulate that 45% of an electric vehicle’s parts must be sourced in the UK or from elsewhere in Europe, otherwise an export tariff of 10% would be imposed.
Labour MP Mike Amesbury (Weaver Vale) said manufacturers face a “cliff edge” in January, asking: “What’s the Government going to do about it? It’s desperate in terms of those jobs in our communities.”
Ms Ghani said: “We are working very hard negotiating with the EU, but fundamentally working with our partner-representative groups within the EU so they can be lobbying as well. This isn’t just an issue that we face here in the UK – it’s a European issue.”
Labour MP Justin Madders (Ellesmere Port and Neston) asked if the Government has formally requested reopening the rules of origin for 2024.
Ms Ghani replied: “The Government is working hard to share the challenges that will be faced by all manufacturers in Europe, not just the UK, when it comes to importing and exporting vehicles.”
The minister later outlined that the UK has an innovation strategy which seeks to boost private sector investment across the country and create the “right conditions for all businesses to innovate and give them the confidence to do so”.
