At the Labour Party Conference this week, Labour delegates voted through a Green New Deal as Labour Party policy and as part of our Green Industrial Revolution. This is a very real commitment to reach net zero carbon by 2030, a commitment that needs government to take an active leading role in securing the changes we need to see in transport, food and energy infrastructure.
The most exciting commitment for Swindon is the promise of investment in a new ‘gigafactory’ here, possibly on the Honda site. A gigafactory is a plant for the manufacture of electric vehicle batteries and the creation of over 3000 new jobs per site, as well as 1000s more in the chemical supply chain in the South West region.
In government, Labour will invest £2.3bn in match funding across 3 sites, one of which is in Swindon, for new gigafactories. The investment will be on a joint venture model including a public equity stake (owned by regional or local public bodies) modelled on contributing 51% of the costs of each factory– costed at £1.5-1.7 billion. The £2.3 billion in public investment is estimated to unlock £2.3 billion in private sector investment directly in the factories, excluding additional supply chain investment.
The Faraday Institution estimates that between four and 13 high-volume, battery production plants (‘gigafactories’) will be needed for the UK to have a flourishing – or even sustainable – automotive industry and is an opportunity in itself. This has been echoed by the SMMT and Unite the Union.
We need to accelerate the shift away from ‘dirty’ vehicles as quickly as possible, at the same time as investing in sustainable and improved public transport. Investment in rail and bus services is also integral to our green transport policy.
Labour will make £3 billion available to invest in new electric car models and technology, to enable vehicle manufacturers to bring new electric car models into production. Labour will exempt new investment in plant and machinery from business rates.
Labour will invest £500 million into four metal reprocessing plants to reprocess cobalt and rare earth minerals used in batteries, creating an estimated 3,000 new jobs. This will tackle the detrimental environmental and human rights impacts associated with battery production, reduce imports of raw materials and create new UK supply chains.
A further £500 million will be available for research and development to encourage the UK to become a world leader in electric, connected and autonomous car technology.
On day one of a Labour government, we will begin a broad consultation with industry and trade unions exploring the transition from internal combustible engine (ICE) to zero emission vehicles at the earliest possible opportunity. It is our objective to secure through these discussions a rapid but just transition that ensures the necessary infrastructure and support for skilled manufacturing jobs is in place with a firm ambition to phase out the sale of ICE vehicles by 2030.
More details of our policies in depth below:
Electric Car Revolution
- Labour has announced that it will invest £3.6 billion into a mammoth expansion of the UK’s electric vehicle (EV) charging networks.
- 2.5 million interest free loans for the purchase of electric vehicles saving buyers up to £5,000.
- Labour will introduce a scrappage scheme to replace cars driven on fossil fuels over ten years old with new electric cars, saving buyers an estimated £2,000.
- In an effort to boost business demand for electric cars, Labour will remove the £320 Vehicle Excise Duty surcharge on electric vehicles purchased for private fleet use above £40,000 for two years.
- Labour will also commit to making the entire government car fleet electric by 2025. This is more ambitious than the Conservative’s aim for 25 per cent of the government fleet to be electric by 2022.
- Labour will put 30,000 electric cars into UK streets to be accessed via a publicly owned community car-sharing clubs.
UK car manufacturing
- The automotive sector is one of the UK’s industrial success stories, contributing billions in GVA, employing over one million people throughout the supply chains, and accounting for 12 per cent of UK exports.
- UK car production in the first half of the year fell by a fifth compared to last year, to 666,000, the 13th straight monthly decline.
- In the period January-June, newly pledged investment was down more than 70 per cent.
Equity finance for investment in new electric models
- Automotive manufacturers will bid for a portion of the £3 billion public investment, match-funded by the company, to be used for investing in the electrification of their plant or bringing a new electric model into production.
- The investment will take the form of equity finance; capital in exchange for shares in the company.
- This funding will be available in 2020/21 and 2021/22.
- It is not uncommon for the state to have stakes in their automotive sectors. For instance, the French government has a 13 per cent share in PSA Group after it agreed to take part in a recapitalization investment plan to help the company in 2014.
Research and Development
- This investment will be used for further research and commercialisation of battery technology and recycling, electric vehicle range, EV charging (e.g. smart charging, induction) and, at an earlier stage, autonomous and connected vehicles.
Building domestic supply of battery raw materials
- There are concerns that extraction of cobalt contributes to conflict and human rights abuses in the Democratic Republic of Congo, and rare earth elements face a high risk of supply chain disruption. Scarcity of supply and volatile costs can impact on UK manufacturing, especially as production – and hence demand for inputs – grows. https://www.amnesty.org/en/documents/afr62/7395/2017/en/
- Labour will invest £500 million into four metal reprocessing plants to reprocess cobalt and rare earth minerals used in batteries, and £50 million into local authority-run collection sites.
- This will create a new supply chain and domestic source of key metals, and an estimated 3,000 new jobs. Domestic car and battery manufacturing will rely less on risky extraction on Congo Dr and China.
- Labour will also set standards for recycled content in battery manufacturing, to reach a minimum proportion of 45 per cent by 2035.