Economy: Automotive Industry — Question for Short Debate

Part of the debate – in the House of Lords at 8:27 pm on 19th January 2009.

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Photo of Lord Cotter Lord Cotter Spokesperson for Innovation, Universities and Skills, Spokesperson for Business, Enterprise and Regulatory Reform, Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson 8:27 pm, 19th January 2009

My Lords, we have had a timely debate today, as there is no question but that the automotive industry is highly important. I pay tribute to the noble Lord, Lord Harrison, for calling this debate and particularly for referring to the importance of the small business sector. Of course the automotive industry is important as an exporter—it accounts for 11 per cent of this country's exports—but it is also important in that we are talking not only about big companies but about the small businesses that feed them. The success or failure of the automotive companies therefore impacts throughout the country. For example, Jaguar Land Rover employs some 15,000 people but reckons to support a further 60,000 jobs through suppliers and dealerships.

Coincidentally, just this last Saturday I helped to launch a community bus—called Bluey—in my village, Congresbury. That minibus has a number of components, such as a lift for a wheelchair, raised and lowered steps and so on. An automotive vehicle is made up of a number of components and provides jobs elsewhere.

So what to do? The Government have today announced a further initiative to try to get credit and lending flowing. I hope that this time the banks will respond fully and with openness and that they will take the action that we are looking forward to them taking.

In this connection, we have all been dismayed by some parts of the financial sector, but Jaguar Land Rover says that its managers will not receive any bonuses this year. I hope that the financial sector will bear that in mind, because the way things have happened there has been outrageous.

As has been mentioned, there is an important opportunity to encourage environmentally friendly vehicles—good for the environment, of course, but good for us for export. There is a possibility of increasing loans to carmakers, as referred to by the noble Lord, Lord Harrison, from the European Investment Bank, according to the European Union Industry Commissioner. Money should be used from that source and others for investment and restructuring rather than just for keeping the operation going. I hope that we may have a response and clarification from the Minister on that.

We could put into the melting pot the suggestion that vehicle scrapping should be encouraged to give the opportunity for older vehicles to be put to one side, if you like, and to encourage the take-up of fuel-efficient technologies to renew our fleets.

Returning to today's Statement, I know that the Finance and Leasing Association has expressed hopes that its sector will get practical encouragement. Has that been taken into account? We all look forward to hearing the Minister's response to our debate today, an important debate at this crucial time for the economy of this country.