My Lords, when I think of all Britain’s success stories over the years, it is hard to look at our domestic automotive industry without a great sense of pride. I draw the House’s attention to my interests as set out in the register, particularly in early-stage battery technologies.
The United Kingdom has been blessed with industry pioneers: Frederick Bremer built the country’s first four-wheeled petrol engine car; Herbert Austin, a Member of your Lordships’ House, led the UK in capturing global market share; Michael Stanley Whittingham won a Nobel Prize for the development of lithium-ion batteries in this country; and Andy Palmer launched the world’s first mass-market electric vehicle. But sadly, our domestic auto industry has been in a steady, gradual decline.
We used to be the world’s largest car exporter and the world’s second-largest car producer, but last year we made just 930,000 cars—fewer than Slovakia, the Czech Republic, Canada and Indonesia. We now make less than 1% of the cars in the world, yet the industry still supports the jobs and livelihoods of more than 800,000 people. All the great names of British auto making have been acquired by foreign competitors. While we welcomed the foreign investment, it also means that key decisions happen in overseas boardrooms, with distinct corporate cultures and ultimately competing priorities to those of UK plc.
It is no accident that Governments in the largest economies around the world have gone to great lengths to support their auto industries. During the 2008 financial crisis, the Japanese, German, French and US Governments all stepped in and recognised the importance of their car industries to their economies and the shadow they cast on associated industries. The industry does not just make cars; it makes skilled people who end up in aviation, logistics, academia, engineering, construction and elsewhere. In 1939, the car industry was able to pivot its manufacturing capability to drive the war effort, and in 2020 it was the car makers that pivoted to create ventilators in our moment of need.
We have an opportunity now to revive the car industry. It is transforming itself with the deployment of electric vehicles. We have a chance to retool, re-evaluate and recreate a new supply chain that includes the mass production of batteries. Chief among our needs is attracting four to six battery manufacturers to the UK instead of the EU. Duty regulations mean that batteries must be made in Europe by 2026, yet almost all cell makers are setting up in the EU simply because they can access bigger grants in lower-cost countries and in a political environment that makes EV batteries a project of strategic importance.
The gracious Speech highlights levelling up, economic growth and net zero, all themes in which the auto industry can play a starring role. But we cannot level up unless there is a level playing field, and that is what the Government need to deliver to our car industry.
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