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Car Manufacturing

I do not want to prevent my hon. Friend the Member for Middlesbrough, South and East Cleveland (Dr. Kumar) from getting in before the 10.30 shutdown, so I shall simply make a few comments echoing points that have already been made. I agree with every word of the previous speech, but I find it quite strange to follow my hon. Friend the Member for Birmingham, Northfield (Richard Burden), because many years ago, before I was an MP, I was involved with him in the fight to protect Longbridge and subsequently in the battle over the Dagenham plant. It brings back to me some of the tiring discussions and fights that we had to maintain car assembly in both those plants.—[Interruption.] I also appreciated the speech of my hon. Friend the Member for Chorley (Mr. Hoyle), who is chuntering away at the moment. He is a good friend of mine, and over the years he has consistently been at the forefront of maintaining the case for British manufacturing and the car industry. At times, the climate has been quite cold. A few years ago, before the collapse of WorldCom and Enron, our Government tended to be preoccupied with what we thought of as the new economy, at the expense of the manufacturing industry, which tended to fall off the edge in terms of debates, but the then Department of Trade and Industry later changed its thinking on that dramatically. Throughout all that, my hon. Friend has been at the forefront in maintaining the case for British manufacturing, and I applaud his work. I also applaud my hon. Friend's speech, especially some of his comments about agency workers and factors such as the downward pressures in the labour market. We in Dagenham have been at the hard end of that, because despite the protestations that people made throughout the protracted struggle to maintain car assembly in the Ford plant, which we lost, the outstanding factor was the ease with which jobs could be cut in this country because of labour market conditions. I still abide by that view, because I saw it happen at close hand. One thing that my hon. Friend missed out of his tour de force, which focused on manufacturing and the car industry across the whole country, was the role of manufacturing in London. It also seems to be omitted from debates about the capital, in which we become preoccupied with financial services, arguably at the expense of the role of manufacturing. I know that the Minister, as the MP for East Ham, has a working knowledge of the Ford Dagenham plant—indeed, some of his constituents work there—so he will not be one of those who overlook the role of manufacturing in the London economy, or the east London economy, but there is a tendency to do so in debates on future economic strategy. Today's debate gives us an opportunity to overcome that. As I have said, before I was elected I was involved in attempts to save car assembly at the Ford Dagenham plant. Unfortunately, we did not manage to do that, but, contrary to the belief that the car plant at Dagenham has closed, we did manage to diversify into engine production. Compared with the somewhat darker days between 1997 and 2000, the plant is now thriving as a result of that diversification into diesel engine manufacturing and technology. Since 2003, Ford has invested £800 million in the Ford Dagenham plant, thus confirming its strategic importance as Ford's European diesel engine manufacturing centre. Today, it manufactures engines for Ford, Jaguar, Land Rover and Volvo, and the latest investment will mean that output increases to more than 1 million units by 2009, and that the plant will supply more than 50 per cent. of Ford's global diesel demand. Between them, the Dagenham plant and the Ford Bridgend plant, which manufactures petrol engines for Ford, Jaguar, Land Rover and Volvo, supply about 25 per cent. of Ford's global engine requirement. In any debate on the car industry in this country, we should acknowledge that role in relation to diesel and engine technology and production. Since 1999 and 2000, when the plant ended car assembly, there has been a massive economic transformation. It has been very bumpy and difficult at times and it has taken a lot of hard work by all parties, but we now sit in a very different place from where we sat then. I should put on record the tireless work of the Mayor of London, his advisers, successive DTI Ministers and advisers, and, indeed, a couple of Prime Ministers in maintaining that investment and working strategically with the Ford Motor Company. At times, the whole plant was threatened, but there has been a major transformation in recent years that will, I hope, provide a platform for further investment and production. In total, the Ford Motor Company employs about 30,000 people in this country—approximately one third of its employees in Europe—of whom 15,500 are employees of Jaguar and Land Rover. I have a few points to make against that general backdrop about the sale of Jaguar and Land Rover and about R and D, which my hon. Friends have already discussed. There is also a question about the future of the supply chain, which has direct relevance to the Ford Dagenham plant and the future production of diesel engines. The debate about the future of Jaguar and Land Rover is not an isolated debate: the consequences will be felt throughout the British economy. Research and development is an important part of Ford's UK work, and accounts for up to 80 per cent. of automotive industry R and D in Britain. About 9,500 people are employed at its three main technical centres at Dunton, Gaydon and Whitley, responsible for Jaguar and Land Rover engineering development. Spending in the UK on R and D for Ford brands is around £800 million annually. We need to maintain those investments. It is clear from discussions with Ford that it believes that environmental technology development provides an economic opportunity for the UK. However, the UK cost equation presents a significant challenge to investment, given the growth in technical capability in India and China. Funds are available for R and D activity and investment, but they need to be maintained and, arguably, increased to maintain our current competitive position, especially within the context of the global market, and to maintain and boost employment for UK workers. Secondly, I want to touch on a couple of points that my hon. Friend the Member for Birmingham, Northfield made about CO2 emissions legislation. Any new EU legislation on CO2 emissions needs to ensure that premium manufacturers such as Jaguar and Land Rover are protected. That point was made earlier. The legislation will impose challenging targets for the entire industry, but it is likely that vehicle manufacturer groups will be able to offset their smaller, higher volume vehicles against the lower volume, higher CO2-emitting vehicles. But if and when Jaguar Land Rover becomes a separate company, it will not be possible to offset emissions in that way, despite the fact that Jaguar Land Rover plans to reduce CO2 emissions by more than the industry's expected average reduction of 18 per cent. I would appreciate the Minister's comments on that. Do we need provision in the legislation for niche producers? It would mean that companies such as Jaguar and Land Rover, which do not produce a full range of vehicles and whose sales volumes in Europe are relatively low, would have a separate target still expected to be in excess of the average overall reduction for the industry.