3.16 pm
Caroline Nokes (Romsey and Southampton North) (Con): I appreciate the opportunity to speak in the debate, which I had not intended to do, but with the slight west midlands bias I thought that I might divert attention back down to the south-east and speak about a specific aspect of the automotive industry and the impact that it has had on my constituency.
I imagine that the instant inclination is to think that I will talk about Ford, and of course it was a huge loss to Southampton when the Transit plant closed last year. In fact, the Transit had been made in Southampton for my whole life and, historically, there were always adverts in the local paper claiming Southampton as the home of the Transit. I pay tribute to the hard work of Ford to ensure that an automotive base remains in the city, as well as a level of employment in my constituency that, at the time of the original announcement to close the plant, we had not expected. One hundred and thirty-four jobs remain in the city, but much of the focus has moved to the port and to the export of vehicles through Southampton docks.
Even at the height of the recession, when economic conditions were difficult, we saw significant expansion in Southampton, particularly of multi-deck car parks. Massive numbers of cars from all the main manufacturers that have been mentioned this afternoon are exported through the port of Southampton—at the moment the figure stands in the region of 0.5 million vehicles every year. We rightly regard the port as one of the significant economic drivers of our entire region. I was privileged to be there yesterday at the opening of the new Southampton container terminal, SCT 5, and there was no doubt that the emphasis was on the automotive sector and its contribution to jobs in the city and to the export of cars through Southampton.
Ford did a fantastic job locally, in partnership with the university, on the Ford scholarships, providing 10 scholarships a year of £10,000 to young people seeking engineering jobs in the automotive industry. Significantly, 50% of the scholarships have gone to women. I notice that the debate has been all-male so far this afternoon, but there is role for women in the automotive industry. I remember the chairman of Ford telling me several years ago that some of the attitudes towards women that he encountered in Westminster would not be tolerated on his factory floor. He is absolutely right; Ford has been a trailblazer in ensuring that the automotive industry is one in which there is an equal place for women. I congratulate Ford on that, as I congratulate my hon. Friend the Member for South Staffordshire (Gavin Williamson) on securing the debate.
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3.18 pm
Mr Iain McKenzie (Inverclyde) (Lab): It is a pleasure to serve under your chairmanship today, Sir Alan. I, too, congratulate the hon. Member for South Staffordshire (Gavin Williamson) on securing the debate.
Today in the UK, we produce more than 0.5 million vehicles and 2.5 million engines each year, of which we export some 80%. That equates to a vehicle rolling off the production line every 20 seconds, making us the 14th largest producer in the world. Of course, as we have heard, the west midlands dominates the car manufacturing industry in terms of employment, but UK manufacturing industry as a whole employs about 2.6 million people, which is 8% of all jobs. Sadly, only 2,000 people now work directly in the automotive industry in Scotland, but I am old enough to remember the heady days of manufacturers such as Rootes and Chrysler just up the road from my constituency in Linwood. What plans do the Government have to encourage vehicle manufacturers to locate elsewhere in the UK and to take advantage of Government help north and south of the border and the skills that still exist in those areas of the country?
We should not forget that there are also jobs in the supply chain. More than 2,000 UK companies regard themselves as automotive suppliers, and they employ about 82,000 people. The UK automotive supply chain generates £4.8 billion of added value annually, with an estimate now of a possible further £3 billion if the opportunities are taken. They should be taken, because about 80% of all components required for vehicle assembly operations can be procured from UK suppliers. I repeat my question to the Minister about how he is encouraging sourcing from UK suppliers.
What will build the future of the automotive industry in the UK? It can probably be summed up in a few words: innovation and quality in design. Innovation means product improvements, and challenging accepted practices, processes and design limitations. This country has been a trailblazer of vehicle innovations that pushed boundaries and showed our competitors a clean pair of heels. In the past those innovations included transverse engines, limited-slip differentials and independent suspension, as well as numerous safety features and a reduction in weight by using new metals to build our engines. I could go on—I am an old mechanic and I could spend hours reciting British vehicle innovations.
Quality in design is what makes products timeless. Anyone who thinks of iconic cars of the past will recognise that British design is there. Hon. Members have spoken fondly today of the forerunners of the small family cars we see so much of today, such as the Mini, whose subframe chassis allowed the first transverse engine, with new positioning of the gearbox. That was a revelation. The Hillman Imp, built in Linwood in Scotland, had a cutting-edge rear-mounted aluminium alloy engine. With its less than 1-litre engine size it produced the same power as a much larger vehicle by cleverly optimising a 9:1 swept volume ratio. That gave sports car performance to a small family saloon. Further up the market range are classics such as the E-Type Jaguar, which is still one of the most iconic sports cars around. With its limited slip differential it was the forerunner of the 4x4. The weight that heavy goods vehicles can now carry is the result of our development of the air braking system.
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Unfortunately, we lost our way for a while and stopped pushing at the design boundary and quality mark. The world overtook us. Most significantly, at first, the Japanese took quality to a new level. However, the way of thinking I have described is being revived by manufacturers in the UK, including Jaguar Land Rover and Nissan, not to mention bus and truck builders. The vehicles they are developing and the innovative designs they are offering are the reason why they are winning markets. That is why I firmly believe we need to plan for manufacturing; the resurgence cannot be left to chance, or to peter out. We need to plan for continued success and maximise benefit around the country. The Government need to encourage more research and development and put their foot on the accelerator.
We need small and medium-sized firms to be a critical part of the supply chain. How do the Government intend to promote a fully integrated UK supply chain and green procurement? We need to overcome supply and demand problems in relation to products and skills, and we need to tackle the culture that refuses to take pride in professions such as engineering and prevents good manufacturing firms from coming to schools to talk to young people. We need high-skill jobs; we need to win the race to the top; and we need many more apprenticeships like the one I served. We need to move up the chain of employment and skills.
Any plan should include green jobs in the automotive industry. We need to design cleaner factories and vehicles, along with cutting-edge production flow and quality assurance techniques, to embrace fully the culture of right first time and defect-free manufacturing. We need procurement that sources around the country to create jobs, but we also need to reduce lead times and promote a just-in-time procurement practice that complements a constant-flow production strategy. We need to end the competitive strategies that value low wage costs over a trained work force. For the consumer, price is not the only factor when purchasing.
As we have heard, one of the most important issues for the industry and the country is the debate about the UK’s membership of the EU. Ahead of the European election, the Society of Motor Manufacturers and Traders wants to ensure that its voice is heard in the automotive sector. Given that we are a significant part of a global industry, and that 80% of all cars manufactured in the UK are exported, the SMMT has commissioned a report, to be published tomorrow, that will provide an economic assessment of the value of the EU to the UK automotive industry.
Labour is clear that business is the solution, not the problem. A plan for manufacturing, with business working in partnership with the Government, is central to building an economy that works for everyday working people, resolving the cost-of-living crisis, delivering jobs that pay a wage people can live on and ensuring that we can pay our way in the world. All that can be made in Great Britain.
3.26 pm
Mr Iain Wright (Hartlepool) (Lab): It is a pleasure to serve under your chairmanship again, Sir Alan. I thank the hon. Member for South Staffordshire (Gavin Williamson) for securing the debate. It has given us a welcome opportunity to discuss what he rightly said is a hugely important part of the British economy.
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I think that the hon. Gentleman began by mentioning Italy; he also mentioned the importance of the west midlands for the UK automotive industry. That is true, but in God’s own country, the north-east of England, a single Nissan plant produces more cars than the entire Italian car industry. That is a remarkable achievement and shows how the British car industry has been transformed. Forty years ago, it was a symbol of industrial decline, inferior products, obsolete manufacturing processes, poor industrial relations and a lack of competitiveness. The sector has undergone a remarkable and welcome transformation in fortunes in the past seven or eight years. As the hon. Gentleman said, the task for all of us is to maintain that competitive edge for the UK automotive sector, with an emphasis on high productivity, high skill levels and innovation, with the aim of raising living standards for all within the industry.
As has been mentioned, there has been great news recently, including the launch of the new Quashqai by Nissan at its plant in Sunderland, the new factory being built by Jaguar Land Rover in Wolverhampton, and the new Mini in Oxford, but there has been bad news too, with the recent announcements at Honda. Anne Snelgrove, whom you will remember from her time in this House, Sir Alan, has been championing the issue in Swindon.
Last month, my hon. Friend the Member for Streatham (Mr Umunna), the shadow Business Secretary, framed the challenge facing the British economy, terming it Agenda 2030. It has four clear pillars: active government investing for the long term; liberating the talents of all; solving tomorrow’s problems today; and an outward-looking, open approach to the world, not isolation. I want to base my discussion of how we can maintain the comparative advantage of the UK automotive industry on those four pillars.
As for an active industrial strategy, it is, as my hon. Friends the Members for Birmingham, Erdington (Jack Dromey) and for Birmingham, Northfield (Richard Burden) said, vital that the Government provide long-term policy certainty and predictability which transcend electoral and political cycles and align more closely with industry’s investment and process cycles. We should be thinking not only about next year or the next five years, but the next 15, 20 or 30. That is why my hon. Friend the Member for Streatham chose the title Agenda 2030. It is five years this month since the Labour Government published “New Industry, New Jobs”, with an emphasis on activism and targeted investment. A grant was provided to Nissan to support a new battery plant and the manufacture in the UK of the Nissan Leaf. The scrappage scheme helped maintain the industry at a time of acute falling demand. More importantly, as we have heard today, the Automotive Council was set up to lay the foundations for a long-term partnership between the industry and the Government and to build long-lasting capabilities and create supportive policies for the automotive industry; it is something that we strongly support. We remain committed to the long-term continuation of the Automotive Council as the key institution for driving strategy, collaboration and innovation in the sector. As we have heard today, we cannot achieve that without the pride, professionalism and commitment of the industry’s work force.
My right hon. Friend the Member for Oxford East (Mr Smith) mentioned Cowley, and my hon. Friend the Member for Birmingham, Erdington mentioned Jaguar
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Land Rover. As my right hon. Friend the Member for Oxford East said, trade unions often get a raw deal in the media and the House. However, we must give Unite credit for playing a leading and proactive role in the automotive industry in general. I am pleased that it did so much great, proactive work to ensure the next generation Astra will be built at Vauxhall’s Ellesmere Port plant. I hope that the Minister agrees that the collaborative approach of the industry, the work force and the Government is the model we should take forward for the long term.
To ensure the UK’s automotive industry achieves its potential, we must address the issues surrounding the supply chain. The Automotive Council estimated that an additional £3 billion per annum could be provided in the UK’s automotive supply chain—a 40% increase on current levels of UK-based supply chain activity. Reshoring is an exciting opportunity. KPMG estimates in its excellent report from about 18 months ago, “Capturing opportunity”, that supply chain opportunities could result in tens of thousands of additional jobs in the UK automotive supply chain by 2017. The prize of more and better-paid jobs, additional industrial capability and renewed competitiveness is huge, and we must grasp it. That is why the Labour party asked Mike Wright of Jaguar Land Rover to undertake an independent review of the manufacturing supply chain to ensure that it is as collaborative, co-ordinated and competitive as possible.
Will the Minister update the House on what he is doing to bring more of the global supply chain in the sector to the UK? How many firms in the automotive industry have received funding from the advanced manufacturing supply chain initiative? Does he plan to put AMSCI’s funding on a more permanent footing to give industry the long-term ability to plan for the future?
As the Minister knows, access to finance remains a problem in the supply chain. Firms often require funding to purchase tooling to complete an order, but they are not paid by the customer until the products are shipped, which puts immense pressure on their cash flow and undermines the potential of the UK automotive supply chain. We need the banking system to work with and for British industry, especially the excellent and promising automotive industry. Far too often it does not. The automotive industrial strategy states:
“The Automotive Council will…work with the financial services industry to develop long-term investment finance products that meet the needs of the automotive industry”.
Will the Minister update the House on progress with that? What has been the flow of finance to the automotive supply chain, and what else will be done?
I mentioned the potential to create tens of thousands of additional jobs, which brings me to the second pillar of Agenda 2030: skills. Every right hon. and hon. Member mentioned skills in their contribution, and they are a massive issue in the automotive industry, and in manufacturing in general. It will make or break the potential of our country’s automotive industry in the next 20 or 30 years. The automotive industrial strategy states that the pipeline for new entrants into the industry narrows too early, with too much leakage at important points. In addition, I am struck that in several of the automotive industry’s bright spots, such as my region of the north-east, as well as the west midlands, unemployment is appallingly high. The unemployment rate in Birmingham, Erdington is the 53rd worst in the country and in Birmingham, Northfield it is the 59th worst. My hon.
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Friend the Member for Birmingham, Erdington said that one in four young people in his constituency are jobless. We need to marry up skills and potential with the potential work force of the future.
My hon. Friend the Member for Inverclyde (Mr McKenzie) talked about the cost-of-living crisis. It is more fundamental than simply prices versus wages; it is about how our kids get decent jobs, a high standard of living and a good career. A co-ordinated industrial strategy should link education policy and curriculum content with the automotive industry’s needs. Will the Minister update the House on how the skills road map for the sector is progressing? How will it improve skills and ensure there are more opportunities and fewer vacancies in the industry? The strategy states that 7,600 apprentices and 1,700 graduates will be recruited in the period 2013-18—the hon. Member for South Staffordshire mentioned those numbers. How is that progressing? What are the Government doing to promote better collaboration between firms in the industry to address the sector-wide problem of skills?
The third pillar of Agenda 2030 is solving tomorrow’s problems today, or the importance of innovation, which my hon. Friend the Member for Inverclyde discussed in his strong contribution. In a debate last month on the automotive industry in the other place, it was said that the chief executive of Jaguar Land Rover expressed the view that the most important thing to his company was innovation. We have a lot of so-called “sticky” technologies and comparative strengths that we need to enhance. This country is particularly strong in designing, producing and manufacturing engines. I am pleased to see the hon. Member for Romsey and Southampton North (Caroline Nokes) in the Chamber. She mentioned Ford. It should be a source of enormous pride to us that one in three engines produced by Ford globally are produced in the UK. We must continue to be strong in engine technology. Will the Minister tell us what progress is being made in setting up the advanced propulsion centre?
This morning, I met Air Products, a firm that is a leading player in the hydrogen industry. It is normally a business-to-business firm in the chemicals industry. What is the Minister doing with the Automotive Council to develop capability and infrastructure for hydrogen fuel cell technology in cars? How successful has the planned collaboration been between the Automotive Council and the Engineering and Physical Sciences Research Council? Will the Minister update us on the work that the Automotive Council has done to identify evolutionary and disruptive technologies that will have an impact on the UK automotive industry and which could hinder progress or provide benefits to our comparative advantage?
The fourth pillar of Agenda 2030 is being outward-looking and open. It is clear from today’s debate that the House wants to encourage inward investment, so original equipment manufacturers and tier 1 and tier 2 automotive manufacturers base their European operations in the UK. The domestic market is important, but that springboard to a European marketplace of half a billion customers is the key selling point for reshoring and encouraging inward investment. As my hon. Friend the Member for Birmingham, Northfield said, internal wrangling and navel gazing will not help potential investment into the UK. We may lose our competitive edge if we do not address the policy certainty issue about European issues.
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Will the Minister address directly the point made by the head of Nissan late last year, when he said bluntly that the car maker may have to evaluate its UK operations if Britain pulls out of the EU? Does that not concern him? Has he seen the report on UK jobs supported by exports to the EU published this week by the Centre for Economics and Business Research, which shows that 4.2 million jobs—particularly those in the north and in the motor trade—are associated with the demand in exports to the EU? It is vital that we remain part of the EU to ensure that manufacturers can base their operations in the UK.
I congratulate all hon. Members who have spoken today. It is clear that the automotive industry is a massive success for British manufacturing. It is a great case study in how industry, the work force and the Government can work together for the long term, with an emphasis on innovation, productivity, competitiveness and exports. We cannot be complacent in the fiercely competitive world in which we live. We must work together for the long term to maintain and strengthen the enviable comparative advantage of the automotive industry in the UK. I look forward to working with all hon. Members to meet that challenge.
3.39 pm
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon): Thank you for the way you have chaired the debate, Sir Alan, and for allowing me a reasonably generous time to respond to the points that have been made. I congratulate my hon. Friend the Member for South Staffordshire (Gavin Williamson) on securing this debate on a subject about which he feels passionately. He made an excellent speech, and I want to echo his comments about the Jaguar Land Rover decision to invest £500 million in a new engine plant in his constituency. That is very welcome news indeed and will bring a massive boost to the area and the supply chain, creating some 1,400 jobs. I am pleased that JLR is already making good progress in recruiting to fill those positions. I am also pleased that the Government are able to support that investment with a £10 million grant.
Various points were made by several hon. Members in excellent speeches. I will touch on as many as I can in addressing the three themes that have emerged today: the supply chain and the need to continue to strengthen it; skills and the need to continue to attract people, including women, into the industry; and what we are doing to advance our enormous strengths in innovation, technology and design.
Our economy is growing now, and the automotive sector is contributing hugely to that growth. Last year, turnover in the automotive industry reached an all-time record, exceeding £60 billion, and was up 9% on the previous year. We have overtaken France, and the UK is now the third largest car producer in Europe, just behind Germany and Spain, producing more than 1.5 million vehicles in the UK in 2013. We have the most productive automotive workers in Europe.
Last July, with the industry we set out a long-term strategy—some hon. Members today reinforced the need for that strategy—for growth and sustainability for the automotive sector in our automotive industrial strategy, which will help to keep Britain at the forefront of the global auto market. We are working closely with the
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industry, through the Automotive Council and the strategy, to remove barriers to growth when we find them, and to create opportunities across the sector.
An excellent example is the co-operation between the Government and industry on an advanced propulsion centre over the next 10 years and investment of £1 billion from both the Government and the industry to help to research, develop and commercialise the next generation of low-carbon technologies, ensuring that the UK stays at the forefront of the design, development, manufacture and use of ultra-low emission vehicles and in so doing helping to secure up to 30,000 jobs.
The Automotive Council met last week to review developments since the publication of the industrial strategy last year. The advanced propulsion centre is progressing ahead of schedule with a senior team in place and two funding competitions well under way, covering innovation and the centre’s location. The council heard that the first successful collaborative research and development projects will be announced later this month with significant public support. A decision on the location of the centre will be made by the executive in the summer.
On the supply chain, the automotive investment organisation reported good progress with early wins and numerous investment opportunities in the pipeline. On skills, the council noted a successful skills bid to the advanced manufacturing supply chain initiative, and continuing progress on the industry employer ownership pilot bid.
Richard Burden: Will the Minister clarify a couple of points about the advanced propulsion centre, particularly the competition around the development of ultra-low emission vehicles? I understand that the budget for that development is £500 million, but it is projected that only £230 million will be spent in this Parliament and there is a question mark about whether any roll-over is anticipated. Will he clarify exactly how much of that £500 million will be spent and how?
Michael Fallon: I am certainly happy to write to the hon. Gentleman about that. The Government have committed our side of the £500 million funding, but we cannot commit expenditure through and beyond the next Parliament. Perhaps the hon. Gentleman will allow me to write to him about that specific point.
Although there has been recent growth and expansion in the centre, and a lot of positive news, we should not become complacent. There is much more to be done to ensure that the growth we have seen in recent years is sustainable, particularly in building the capability and capacity of the supply chain, and I will turn to that now.
My hon. Friend the Member for South Staffordshire is right in saying that there is much more to do to strengthen the supply chain. Currently, only about 40% of the components of a UK-built vehicle come from a UK supplier, so there is clearly an opportunity for us to capture more of the supply chain. Through the strategy and the council, the Government and industry are working together to boost the competitiveness of the UK’s supply chain growth. We are investing some £129 million to strengthen advanced manufacturing supply chains that will create around 1,400 jobs, and we
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are supporting a Society of Motor Manufacturers and Traders-led project with £13.4 million of funding to help to improve the competitiveness and capability of 38 automotive supply chain companies.
The sector is also benefiting from Government funding worth more than £56 million for a total of nine AMSCI bids across four rounds of the competition. Between them, the projects aim to create more than 3,700 jobs and to safeguard a further 3,800 jobs. The Automotive Council has identified a potential £3 billion of opportunities for UK-based vehicle and engine manufacturers, where components are currently sourced from overseas.
The sector has also been successful in gaining funding from the regional growth fund, and has secured some £236 million in awards from that funding in rounds 1 to 4. To marry the opportunity with investor appetite, the automotive investment organisation, to which several hon. Members referred, aims to double the number of jobs created or secured in the automotive supply chain through foreign direct investments over the next three years to 15,000, and is currently on target to achieve that. It has had some early wins and has many investment opportunities in the pipeline.
The hon. Member for Inverclyde (Mr McKenzie) asked about the supply chain and what I have been doing to help to promote supply chain events. I have attended and spoken at events in London, Detroit and Milan for suppliers in the Po valley, and I have done the same in Tokyo and Nagoya, where tier 1 and 2 component suppliers already have some interest in the UK. I have been working very hard with UK Trade and Investment, and now the automotive investment organisation, to persuade suppliers to increase their presence in the UK and to do more closer to the prime producers.
Mr McKenzie: Does the Minister agree that encouraging a green supply chain would enable more manufacturers to source in the UK, and to get round what is always put up as an excuse—the idea that EU procurement legislation does not allow them to source as close to home as they would like?
Michael Fallon: I will certainly consider that and draw it to the attention of the Automotive Investment Organisation. It is an intriguing thought. We are obviously working closely on procurement issues in preparing to help manufacturers here with negotiations under the transatlantic trade and investment partnership with the United States, and we are looking at EU procurement rules in that context.
We know that the industry has concerns about the skills levels in the supply chain, and we share those concerns. To capitalise on the growth of the major manufacturers in the UK, we must tackle those skills gaps, so that we can build a strong UK supplier network. We are providing significant support through the employer ownership pilot. In the west midlands, for example, £1 million will support the Telford manufacturing partnership, led by DENSO, in assisting in pre-employment activities and in upskilling employees. We are working with the industry through the Automotive Council to ensure that we target the next phase of support where it is most needed.
Apprenticeships are at the heart of our approach to improving work force skills. In 2012-13, we supported over 66,000 apprenticeship starts in the engineering and
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manufacturing technologies sector subject area. Trailblazers are leading the way in implementing new apprenticeships and in helping to design the first apprenticeship standards.
Heather Wheeler (South Derbyshire) (Con): Please accept my apologies, Sir Alan; I was detained on other parliamentary business, so I arrived late for today’s debate. I apologise to the hon. Member for South Staffordshire (Gavin Williamson). Would the Minister like to congratulate Toyota, which is based in South Derbyshire? It has taken on the challenge of expanding its apprenticeship centre, so that it is producing apprentices for the supply chain as well. It is over-extra-supplying in the apprenticeship area, and that is very important for the future.
Michael Fallon: Yes. That is a very important approach, and I hope that it will be copied more widely.
The Trailblazer group is chaired by Ian Eva, the apprenticeship manager from Jaguar Land Rover, with the involvement of a number of other companies, including Toyota and BMW. Traineeships are another key strand of our strategy to help unlock the potential of young people who are motivated to work but lack the skills and experience needed to compete for apprenticeships and other jobs. Hundreds of employers are already on board, including household names in the automotive sector, such as Jaguar Land Rover and Nissan.
Mr Andrew Smith: On apprenticeships, although progress is of course welcome, will the Minister respond to my point about the need for a standard automotive framework for apprenticeships with a high level of quality assurance?
Michael Fallon: Yes, I will. We need to drive up the quality of apprenticeships, and that is part of what is called the Trailblazer exercise. Those involved will help to draw up the standards, and ensure that there is a rigorous test at the end of the apprenticeship and that we improve the quality of what is on offer.
I turn to what we are doing to support innovation and technology. Our aspiration is for almost every car and van in the UK fleet to be an ultra-low emission vehicle by 2050, with our industry at the forefront of the design, development, manufacture and use of those vehicles, delivering opportunities and contributing to the decarbonisation of road transport. We have made a commitment of £400 million over this Parliament to making the UK a leading market for ultra-low carbon vehicles, and we announced an additional £500 million of capital funding for the period between 2015 and 2020.
To ensure that we maintain our position at the forefront of that technology, as I have said, we have already agreed the investment in the Advanced Propulsion Centre, and we are supporting further innovation, research and development through an £82 million investment up to 2015 from the Office for Low Emission Vehicles through the Technology Strategy Board.
As my hon. Friend the Member for South Staffordshire said, we have great automotive design capacity in this country. Nissan has a cutting-edge European design centre based in Paddington—London, of course, is one of the creative hubs of the world—but with its sister Nissan technology centre at Cranfield and the largest single production plant at Sunderland, we can be proud
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to say that the latest version of the best-selling Qashqai has been designed and developed, and is being successfully manufactured, here in the UK.
Nissan is not alone in that. Ford invests some £450 million each year in designing, developing and researching advanced gasoline and petrol engines for its global product range at Dunton. Volkswagen spends £200 million each year at its engineering centre at Crewe, which, of course, designs the interior and exterior of Bentley cars. The scale of JLR’s research and development investment places it in the top 10 of all R and D investment in the UK. Some £2.75 billion was invested in 2013-14.
Let me turn to points that have been raised. The hon. Member for Birmingham, Northfield (Richard Burden), asked me about Dunlop. We have been working closely with Dunlop to see what we can do in Government to secure a better outcome for all parties concerned, particularly the Dunlop workers, given the expiry of the lease next year. The company met the Secretary of State for Business, Innovation and Skills recently. There have also been key meetings at official level. We continue to offer our full support to Dunlop. The company has acknowledged that offer of support and will contact officials once the consultation has concluded.
The hon. Gentleman also asked me about the regional growth fund, which I have referred to. It is true that in the first couple of rounds of the regional growth fund, a proper time scale was not in place. I put that in place for round 3. It is in place for round 4, and it will shortly be put in place when we announce the award winners for round 5, so I think we have a more systematic process for looking at the allocations.
The hon. Member for Inverclyde asked me specifically what we were doing to make sure that all this growth was more evenly spread throughout the United Kingdom. It is fairly spread, certainly across England. I recognise the decline of some elements of the Scottish car industry. Industrial policy, of course, is a devolved matter, so the instruments at our command here—the regional growth fund and AMSCI—are not available in Scotland. It has its own separate instruments, but companies from all over the United Kingdom are represented on the Automotive Council, and we work closely through UK Trade & Investment with counterparts in Scotland.
The hon. Member for Hartlepool (Mr Wright) asked me about a number of points. He referred to the partnership with the unions. I, too, would like to place on record the important part that unions have played in the revival of our automotive industry. We saw that in emphatic fashion in the negotiations over Ellesmere Port; it was the constructive partnership—the agreement on more flexible working practices—that made it able to win investment in the face of a competing bid for Germany. I remind hon. Members that Unite is represented on the Automotive Council. It is right that it has its place there, and I, too, pay tribute to the constructive way in which it has worked on a number of the changes that have taken place in the industry.
The hon. Gentleman asked me about the supply chain, but I think I have answered questions about the efforts that we are making to improve supply chain capabilities right across the world.
Finally, let me say that the United Kingdom is now a competitive place to do business. When we came to office back in 2010, the rate of corporation tax was 28%. Yesterday it was 23%, today it is 21%, and next
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April it will be 20%. Our labour costs are already among the lowest in western Europe. We have an attractive research and development tax credit regime and the patent box. All those combine to make this country an attractive location for innovative industries such as the automotive sector. With the automotive sector investing over £2.5 billion in our country last year, it is very clear that vehicle makers value the UK as one of the best places in the world to do business. Through the Automotive Council, the Government are working in close partnership with automotive companies to continue to improve the overall competitiveness of the business environment, both domestically and internationally.
Sir Alan Meale (in the Chair): Mr Williamson, we have about one minute left. That gives you the opportunity to thank Members on both sides of the Chamber and the Minister for their participation, but there is no time for questions.
3.58 pm
Gavin Williamson: Thank you, Sir Alan. It is always a pleasure to speak again and to thank everyone, as you so kindly prompted me to, for their contributions.
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The debate has shown that, as I said at the start, we are all passionate about this industry, and we all have a clear idea of some of the challenges to it. I have a great feeling that there is an immense amount of consensus on making sure that the industry thrives in future, so that instead of being the third largest car manufacturer in Europe, we will be the largest, hopefully in the not-too-distant future.
3.59 pm
4.30 pm
Sir Alan Meale (in the Chair): It does not seem as if the Member has arrived for the next debate, so I shall adjourn the sitting.