Honda in Swindon

Part of the debate – in the House of Commons at 1:23 pm on 19th February 2019.

Alert me about debates like this

Photo of Rebecca Long-Bailey Rebecca Long-Bailey Shadow Secretary of State for Business, Energy and Industrial Strategy, Member, Labour Party National Executive Committee 1:23 pm, 19th February 2019

I thank the Minister for advance sight of his statement. This morning’s news is absolutely devastating for the 3,500 workers in Swindon, their families and the wider community. It is absolutely devastating for the businesses in Honda’s supply chain and the tens of thousands of workers employed in them. It is a devastating blow to the automotive sector, to UK manufacturing in general and, indeed, to our entire economy.

A worker employed at Honda in Swindon for 24 years summarised the situation last night when he said that the Government are “completely incompetent”. I could not agree more. Honda’s decision is a damning indictment of the Government’s failure to support car manufacturing and ensure business confidence, with regard both to Brexit and to their so-called industrial strategy. Before Members on the Government Benches become too agitated, let me say that I understand that Honda’s CEO said this morning that the decision was unrelated to Brexit. However, the company’s statement specifically says that it wants to

“focus activity in regions where it expects to have high production volumes”,

especially of electric vehicles. The logical question is this: why does Honda no longer believe that the UK will have high production volumes, and why does it no longer have the confidence to invest here to make it so? As the Secretary of State has said, it will in future be exporting to the EU from Japan rather than from Britain.

The reason why the likes of Honda and Nissan began producing in the UK in the first place was that it was a good place to locate their manufacturing, so something must have changed. Could it be the Government’s botched Brexit causing chaos and uncertainty and undermining business confidence? The Secretary of State also alluded to the EU-Japan trade deal, which imposes zero tariffs at a time when we do not know what our tariffs will be. The likes of Airbus, Nissan, Ford and Jaguar Land Rover have all halted investment or slashed jobs as a direct result of that uncertainty. Nissan reversed its decision to build the X-Trail here only two weeks ago, JLR has slashed 4,500 jobs, and Ford has cut 1,000 jobs. Over the weekend, the senior vice president of Airbus said that a no-deal Brexit would be “catastrophic”, adding:

“We will have to look at future investments... There’re many other countries that dearly love aerospace.”

In fact, Honda itself warned last year that leaving the EU without a deal would cost the company tens of millions, so there can be no doubt that the Government’s reckless threats of no deal and prolonged uncertainty are having an impact on business decisions in the here and now, even if that is not in the top line of a press release. No deal must therefore be taken off the table and a firm commitment to a customs union and single market deal agreed.

Honda has also said that global trends and the move to electric vehicles were a factor in its decision. Could it be that the Government’s failure to support the transition to electric vehicles through their industrial strategy has augmented Honda’s decision? It wants to expand its electric vehicle production, which is something we all want, but we need that production to be here in the UK now, not used as a reason to close down plants in the wake of Brexit.

The UK has a world-class automotive sector and could be a world leader in electric vehicles, at the cutting edge of electric vehicle technology and research, but the Government have failed to invest to support the transition. I will give just one example. The Treasury pledged last year to support the switch to zero-emission vehicles with a £400 million fund for charging infrastructure, giving manufacturers the certainty to invest in production. Half of the money was to come from the taxpayer, with the rest matched by the private sector. However, one year on, the money that it was promised would be raised from the private sector has not been secured and no money from the fund has been invested.

The automotive sector is the jewel in our manufacturing crown. It supports highly paid, highly skilled jobs, it contributes enormously to our economy, and it has been an exemplar of the kind of industry that we need in the UK. But its future is in jeopardy, as has been shown so clearly in the decisions of recent weeks. Can the Secretary of State commit now to taking a no-deal Brexit off the table, agreeing a customs union deal and working with manufacturers and unions to support the transition in the market before it is too late? Can he offer Honda any incentives or reassurances that its investment here would be secure? After all, he did offer Nissan a sweetheart deal. Or is he happy to let yet another industry, and the communities who rely upon it, fall by the wayside on the Conservatives’ watch?