It was a pleasure to close the Society of Motor Manufacturers and Traders Summit this afternoon:
No industry better demonstrates the challenges and opportunities facing our country like the automotive sector and I was very grateful to set out my vision for how Labour could be the partenr industry needs to ensure its future can be as bright as it possibly could be
You can read my full speech below:
Thank you so much for this kind invitation to join you today
Now this is my first appearance at SMMT conference,
But I imagine that quite a few MPs turn up at this event and tell you just how much they love cars.
Well, I am going to be no different
Because for me, growing up in the North East in a working class family, cars were never just a means of transport;
Public transport in County Durham in the 1990s wasn’t great. Owning a car, or having a friend who did, was transformative.
Cars, for me, are about that freedom but also aspiration and – crucially – they’re about skilled, well-paid jobs. Many of my school friends went to work in the automotive industry and still do
Now, I’ll confess, having now grown up to have four children, and two dogs, I don’t always get to drive the car I imagined I would as a younger man. But that sense of freedom, and aspiration, still holds true. So when we look to the future of this industry, and the challenges ahead, we’ve got to remember what cars mean to people, because future policy – especially on decarbonisation – will only succeed if it takes this onboard.
What I want to talk to you about today is the bright future I see for the whole automotive industry, the partner I think the industry needs in Government, and why I believe that’s essential to turning around the wider performance of the UK economy as a whole.
Because nothing demonstrates better, the challenges, and opportunities, our economy faces like the automotive industry;
There is an urgent need to decarbonise and a hugely ambitious timescale set to deliver it;
Commodity prices and inflation are impacting not just production but demand;
Supply chains and access to necessary technologies like semi-conductors are under real strain;
And the post-Brexit changes to rules of origin represent substantial further challenges.
Like many rivals and competitors across the world, we’ve got to fight to attract investment and secure the next generation of models are built here. And it is clear to me – particularly when it comes to battery capacity – that your industry cannot overcome these challenges alone. It needs a partner in government
and with all due humility I believe the Labour Party, and myself, are the people best-placed to that partner.
Because if we are to achieve our net zero target it is self-evident that we have to develop, build and sell more electric vehicles. And we surely, need to retain the skilled jobs, and export success stories, that come from having a strong automotive sector.
So it’s fundamental, that we create a domestic battery supply chain with sufficient capacity for us to remain a powerhouse in vehicle production.
But I read the same studies and reports as all of you.
To support the battery production that is needed requires us to build around ten giga factories. That means five up and running by 2030. But that is not the position we are in. And I’m worried we could miss out.
Our analysis shows we could be creating 5000 jobs a year in electric cars. But right now, we’re only creating around a 1000 a year.
I’ve been able to speak to many of you over the last 6 months and I know you are doing and planning some impressive things. But we need more ambition from Government.
So this, is what we will do, under the next Labour Government:
Firstly, we’ll back automotive manufacturers and create jobs by part-financing the creation of three new, additional gigafactories by 2025. We’ll use funding from the Climate Investment Pledge Rachel Reeves announced last year to do this, and it will be fundamental to ensuring Britain’s global leadership in the electric vehicle market;
Secondly, we’ll make electric vehicle ownership more affordable, by offering interest-free loans for new and used electric vehicles to those on low to middle incomes, to remove some of the upfront cost barrier;
Thirdly, we’ll make it easier for people to drive an electric vehicle, wherever they live, by accelerating the roll-out of charging points on streets.
That is what I believe real partnership looks like, with government taking the long-term view, and leveraging in the private investment required to secure good jobs and deliver net zero.
The approach we’re proposing on electric vehicles, is exactly the approach we want to take to the economy as a whole. A partnership that harnesses the dynamism of the market economy, but recognises without an active state creating new markets and opportunities, we risk missing out to our competitors.
I am in a tremendously fortunate position, in that I have pretty much a free reign to visit any business in this country. And I know how good we can be.
I was in Coventry yesterday at LEVC and the Battery Industrialisation Centre. It was brilliant and we have some world class firms, and the best of British industry is as good if not better than anything in the world and a lot of that is in the automotive sector.
But what keeps me up at night, is how, knowing how good we can be, do we face that projection of having the second lowest growth in the G20 next year, second only to Russia? Why has growth, and productivity growth, over the last decade been so poor? Why are taxes at record levels, even though you can’t get a passport or see a dentist?
What we need is a plan to turn that round.
And with respect to the Chancellor who spoke this morning, bringing back imperial measurements, or grammar schools, or threatening a trade war with the European Union, is not the way to do it.
I believe that central to our last decade of poor economic performance, is our poor record on business investment. The fact we have the lowest rate of private investment in the G7 is absolutely what we need to change. To deliver net zero, it’s even more important.
That’s the rationale for Labour’s Climate Investment Pledge, bringing UK public investment to comparable levels to our competitors, in order to derisk and leverage in the private investment we need.
We also plan to scrap business rates and replacing them with a fairer and more modern system and create a modern industrial strategy to provide confidence and consistency for businesses over successive investment cycles.
Now, I know, many of you will have seen various government plans and strategies come and go. The last industrial strategy only lasted two years. I’d be quite sceptical too.
So we plan to learn the lessons of the past and embed that industrial strategy into the UK’s architecture with a reformed Industrial Strategy Council setup on a statutory basis, playing a role comparable to the Bank of England’s monetary policy committee, or the Committee on Climate Change.
That industrial strategy will cover all parts of the economy but recognise that what a sector like the automotive industry requires is different to hospitality or retail.
Decarbonisation must be an essential part of that industrial strategy, but we should be frank and transparent on what that requires – including publishing UK emissions on a consumption, as well as a geographic basis, to ensure essential parts of your supply chain – especially the steel industry – have a strong future here in the UK.
On Brexit, I know that leaving the Single Market has added to the burdens you’re facing. But, I honestly believe that plunging this country into another impasse, where we relive the Brexit debate over and over again, would create the kind of uncertainty and instability, that in itself becomes the problem because it could never end.
So our policy is for trade solutions not constitutional ones.
We’ll get an agreement on veterinary standards, we’ll seek mutual recognition of conformity assessments, we’ll make the deal work far better than it does at present and we’re confident we’ll have the more constructive relationship required with the EU to deliver that.
In conclusion, I hope what I’ve told you today has provided some insight and I hope, some excitement, about what our plans might mean for you.
And I hope that you recognise our desire to engage with you, and develop these plans, is genuine and sincere.
If I was asked to sum up British politics over the last few years, from a business perspective, I would say: “Labour have changed – so too have the Conservatives” The change in Labour, is certainly for the better.
When I’m at one of your factories, I’m always struck by how the workforce, the unions and the management, all say the same thing – you want real long-term commitment to this sector. I get it.
Speaking to the LEVC in Coventry yesterday, it was a pleasure to visit a business and hear the pride, and ambition, of both the management and the workforce, with huge potential for further expansion
Firms like that should have a Government that shares that ambition, and which gets on with the job rather constantly stokes division for its own electoral ends.
What I care about, is:
How do we secure and attract the investment we need for the future?
How do we harness the opportunities net zero will bring?
How do we make the reforms we need to get us where we need to be.
These are the questions that matter.
And I look forward to working with you as we deliver the answers to them and ensure the future for this industry, is as bright, as it possibly could be.
Thank you again for the chance to talk to you today