Jaguar Land Rover: Redundancies

I remind Members that the Minister has 10 minutes, the shadow Minister has five and the Liberal Democrat spokesperson has two, and that statements are an opportunity for Members to question the Minister, not to make statements of their own.

With permission, Madam Deputy Speaker, I wish to make a statement on the Government’s support for Jaguar Land Rover and our wider automotive sector. I offer my apologies on behalf of the Secretary of State, who is on his way to France to talk to our trading partners there. As the House will be aware, Jaguar Land Rover recently announced approximately 4,000 redundancies as part of a £1.7 billion cost saving effort, and the company now intends to consult on the job losses that are planned over the next two years. Although Jaguar Land Rover has stated that these losses will not impact production staff, the news will undoubtedly come as a terrible shock to all of the company’s employees. My right hon. Friend the Secretary of State and I have been in regular contact with the company and the relevant unions since the Government became aware. We have made it clear that we want to see the company reducing the impact on workers through the consultation period and that all employees deserve maximum clarity on the extent and focus of its plans for non-production workers, which the Business Secretary and I encouraged the company to do earlier today in a meeting with the company and the Unite general secretary. We recognise, too, the impact that those redundancies will have on local skills. There is a deep advanced manufacturing skills base in the west midlands, and this Government are working together with employers and the combined authority to retain that skills base within the regional economy, including by backing Mayor Richard Parker’s £500,000 support package for JLR workers taking voluntary redundancy. The Department for Work and Pensions also stands ready to support anyone affected through its rapid response service, which provides support and advice to employers and employees facing redundancy, including help with finding new work and training. Hon. Members will know that, over recent years, Jaguar Land Rover has been forced to confront a series of challenges, many of which have been shared by vehicle producers all over the world, which I will say more about shortly. One of the unique challenges the company faced last year, however, was a significant cyber-attack that temporarily halted production for several weeks. However, with help and support from this Government, including a £1.5 billion loan guarantee, it resumed operations and reopened assembly lines. Make no mistake: when British industry is attacked, we will step in to defend it, and defend it strongly, in our national interest. In this case, however, Jaguar Land Rover has cited global market conditions as one of the principal reasons for job reductions. Indeed, similar announcements from manufacturers such as Volkswagen and BMW underscore the challenging global headwinds that nearly all automotive manufacturers are facing right now: tariffs, high energy costs, the transition to electric vehicles, and stiff competition from overseas producers. We recognise those challenges, and are using our modern industrial strategy to help our car industry to rise to them. Through our DRIVE35 programme—driving research and investment in vehicle electrification—we are ploughing more than £4 billion into our automotive sector to support the electrification of vehicle plants alongside batteries, electric motors, hydrogen fuel cells and power electronics. It is the biggest investment in our car industry of the post-war era. Jaguar Land Rover has benefited from that funding, with £40 million of public and private investment going into advanced software-defined vehicles, supply chain resilience and lightweighting. Alongside that funding for innovation and next-generation technologies, hon. Members will know that the Government have made a considerable grant investment into Agratas’s gigafactory in Somerset, which is strengthening not only the UK’s battery production capability but the automotive industry and companies like Jaguar Land Rover, which will benefit from a secure domestic supply. When it comes to energy costs, our British industrial competitiveness scheme will save more than 10,000 manufacturers up to 25% of their electricity bills. This will almost certainly include some of the biggest companies in the automotive sector, including Jaguar Land Rover. The successful applicants for that scheme will be announced soon. On global market conditions and tariffs, this Government have acted decisively to secure trade agreements that support our nation’s car manufacturers. Our economic prosperity deal, for example, includes a preferential rate of 10% on the first 100,000 UK-made cars exported to the USA each year. The US is obviously a major export market for Jaguar Land Rover—the biggest, in fact—as it is for so many other high-value manufacturers in the UK, which is why we worked so hard to secure that deal. We remain the only country in the world subject to a 10% tariff for automotive exports, with other nations facing a much higher rate. We have placed just as much importance on vehicle exports in the other trade deals we have negotiated since taking office, including the landmark agreement we secured with India—an agreement that reduces tariffs on British-made vehicles from roughly 110% to 10%. This is a significant win for Jaguar Land Rover and other manufacturers, as India is already a huge market, with consumers set to grow by millions in the coming decades as the country’s economy fast expands. I should also touch on the zero emission vehicle mandate, which provides a clear pathway to phase out new petrol and diesel cars and vans. We always said we would keep it under review. We always said that we needed a pragmatic and balanced approach. That is the right thing to do, because discouraging the production of electric vehicles does not make good business sense for anyone. The fact is that consumers want them, with recent stats showing that for the first time in the UK, electric vehicles have outsold petrol cars over a 12-month window. Europe reached a similar milestone recently. Electric is the future. As part of our ambition to reindustrialise our country, we absolutely want those electrical vehicles to be designed and built in Britain. A mandate to steer the industry into that electric future is needed, but, equally, if we accept that zero emissions is the destination, we have to partner with industry to get there. I know that Jaguar Land Rover is of that view too. We are consulting with the company and other manufacturers to ensure that the ZEV mandate works for our automotive industry—that it strikes the right balance, with targets that are ambitious yet realistic. The consultation on the ZEV mandate review closes on 23 October. Jaguar Land Rover remains our largest car manufacturer. It is a linchpin of the UK automotive sector—a company with a long and proud history. Over many decades, it has become synonymous with the best of British design and engineering. That is true for past models such as the E-Type, the XJS, the F-Type, and it is true for the firm’s modern line-up, including the Land Rover Defender and the Discovery. These vehicles endure. Years after production ended, I note that the Jaguar I-PACE is still a vehicle of choice for companies operating driverless cars in the US and those testing them here in the UK. With last week’s launch of the new fully electric Range Rover, I am confident that Jaguar Land Rover will get past this difficult period. It will emerge from it stronger and more competitive, holding its own in the global car market against the best of them from Germany, the United States and China. For our part, we will use our industrial strategy and DRIVE35 to support JLR and the British automotive sector in this journey. In doing so, we will guarantee Britain’s status as a proud, successful car-making nation for many years to come. I commend this statement to the House.

I call the shadow Secretary of State.

I thank the Minister for his statement. In his final Prime Minister’s questions, Keir Starmer spoke emotionally about how he had saved jobs at Jaguar Land Rover. Two months later, we hear news of 4,000 job losses at Britain’s biggest car manufacturer and the new Minister for Reindustrialisation is forced to make his first statement to the House on de-industrialisation. JLR workers will have spent another weekend contemplating their future, wondering about the impact on their careers, families and communities, and questioning the sustainability of the British car industry and the countless businesses in JLR’s nationwide supply chain—firms whose vital industrial capability, once lost, will be hard to replace. JLR is still recovering from a crippling cyber-attack, of course, and the Minister has talked about the headwinds facing all car manufacturers. They include massive barriers erected by China to sell into its domestic market, while Chinese cars are aggressively sold into our own. Tech is changing the car industry from an engineering business to a component assembler and software installer. These shifts are huge and undisputed. The Business Secretary has said that JLR must become more competitive, but the question remains: what are he, the Chancellor and the new Prime Minister doing to make our country more competitive—and fast? I am not talking about tortoise-like speeches on triple helixes, sector plans, state-backed loans or union negotiations. I am talking about hard, urgent choices on tax, regulation and energy. Let’s take the ZEV mandate, which dictates that the manufacture of petrol and diesel cars will be banned in this country in just over three years’ time, and which is seeing our firms being fined right now for customers not buying electric vehicles that they do not want. Having been manoeuvred into joint ventures and having had their designs copied by Chinese competitors, British manufacturers are now being forced to subsidise the Temu Range Rovers that are gobbling market share. It is crazy economic self-harm. The Conservatives would abolish the ZEV mandate. That is what unions want too. Can the Minister tell us: will the Government act? Our industrial base is crippled by ruinous energy costs. We are being asked to applaud the Government’s industrial energy scheme, which does not start until next year, fails to address the underlying problem, and will not bring down prices for the whole economy. How will it position us against the competition? BICS will bring down energy costs by 25%, but given that our industrial electricity costs are four times that of the US, twice as high as France and 46% higher than the global average, our competitive disadvantage remains. The Conservatives have a cheap power plan to slash energy costs for the entire economy. It involves hard-nosed choices: repealing the Climate Change Act 2008, axing the emissions trading scheme, scrapping wind and solar subsidies, investing in nuclear and getting the North sea drilling again. Will this Government be similarly tough, or will they continue to pretend that British industry is not having its legs cut off by net zero? The Chancellor talked ploddingly this week about reducing the burdens on business, but the truth is that, through regulation and tax, the unemployment Act and the national insurance hike, Labour has made it riskier and more expensive to employ people. That is bad for business, because it adds another cost pressure, and it is bad for sales; 20% of JLR’s vehicles are for the domestic market, and right now too many Brits are too worried about tax bills, inflation and jobs to buy premium cars. How does this new iteration of Labour intend to untangle the mess of these past two years? JLR sells nearly a third of its cars to America. US tariffs on them are four times higher than when Labour came in, but it is because we are outside the EU that we at least got a better tariff deal than member states—and it is the same with the India deal. As this new Prime Minister ingratiates himself with Brussels, can we be assured that he will not negotiate away our competitive advantages? We know, too, that tariff and quota deals can change. The Foreign Secretary’s performative pronouncements on Israel and the Prime Minister’s ongoing failure to set out a defence plan risk antagonising the Americans and throwing us into another round of tariff negotiations that could cripple our car and life science industries. What will the Minister do to make sure that his colleagues are not jeopardising JLR jobs with dubious diplomacy, and are any trade measures being considered when it comes to China? Britain is de-industrialising before our eyes. In the west midlands and beyond, there will be pain in every postcode. More Whitehall schemes and an army of mayors are not going to stop the rot. The Government cannot solve all of JLR’s problems, but it is the job of Ministers to create conditions in which it and countless other businesses can manufacture competitively in Britain. Are Ministers going to accept that this involves tough choices and then act with the urgency that this crisis demands?

This is a day to talk about the workers, who are deeply worried and are being communicated to by Jaguar Land Rover about the future of their employment, so I do not wish to be too political in my response. I will say, however, that I understand that it is the job of the Opposition to take fire at the Government, but we have to be careful in this House to make sure that industry is not collateral damage. The hon. Lady talks about the supply chain. JLR has been very clear, publicly and in private to us and to the unions, that the production staff are not going to be impacted. This is not Jaguar Land Rover retreating from investment, lowering its ambitions and withdrawing from markets. The organisation is as ambitious as it has been, and it has as good a product—a world-beating product—as it ever had. The hon. Lady asks what we are doing to tackle the headwinds that Jaguar Land Rover has cited when talking about this decision. There is a little bit of a habit developing in this House of the Conservatives asking why we are not fixing the damage that they did quickly enough. The British industrial competitiveness scheme that is coming in never existed under the previous Government. It will save an enormous amount for automotive manufacturers and their supply chain. The hon. Lady rightly mentioned trade deals and recognised our trade deal with the United States, which no other country enjoys. We can all understand why she did not mention the relationship with Europe and the impact of trade deals that we inherited there, which Ministers across the Government are working incredibly hard to deal with at the moment—for example, with “Made in Europe” and rules of origin. Finally, we inherited the ZEV mandate from the hon. Lady’s party—[Interruption.] The right hon. Member for Basildon and Billericay (Mr Holden) says from a sedentary position, “Well, change it.” We did change it. We changed it last year, in part to help plug-in hybrids, which was of enormous importance to Jaguar Land Rover. As I said in my statement, we have recognised the scale of the challenges that the automotive sector faces worldwide. The hon. Lady makes a lot of criticisms, but I say to her that Volkswagen, which is letting 100,000 staff go, is not governed by a Labour Government. We have recognised the global headwinds. It is why we are putting into the automotive sector the biggest investment of the post-war period. Rather than criticising the industrial strategy, she should get in the car and travel that journey with us.

I call the Chair of the Business and Trade Committee

The loss of 4,000 jobs at Jaguar Land Rover is a body blow for workers, families and communities across the west midlands, so I commend Richard Parker, the Mayor of the West Midlands, for moving quickly on Monday to put £500,000 on the table to help ensure that everybody gets back to work. Will the Minister pledge that if more is needed he will act to back the mayor in getting everybody back to work? More broadly, will the Minister reiterate the pledges he made yesterday in front of the Select Committee to bring down costs—especially energy costs—and leave his mind open to the necessity of implementing tariffs on China, which is exporting cars that are over-subsidised? At the end of the day, everybody in the House believes in competition, but it needs to be fair competition.

I thank the Select Committee Chair for that series of questions. I know that for him this is not just a Committee interest but a local interest. I will take his points in reverse order. As I said to my right hon. Friend yesterday in the Select Committee, we have to be very careful about Chinese imports. Our automotive industry is very export-focused, and the industry wants us to be very careful not to do anything in protecting our domestic manufacturers that might hurt them by closing down markets elsewhere. As I said to him yesterday, we are looking carefully at that, but we must be very careful. On energy, we would love to go further than the British industrial competitiveness scheme. It is worth noting that when we initially introduced the proposal for BICS, it was for fewer businesses than will be eligible and will start to apply for it in a matter of days. We will continue to see how far we can go on that, because we are aware of how much of a problem there is for so many parts of industry. Finally, we are working incredibly closely with the mayor. The main request from those involved in the situation at Jaguar Land Rover is that we continue to focus on the support we are giving to them in innovation, for the supply chain and in standing behind them, so that they come out strong and resilient on the other side of these global challenges.

I call the Liberal Democrat spokesperson.

On the same day that the Chancellor stood up and claimed that his growth mission was working, it was reported that 4,000 more manufacturing jobs were being cut in the west midlands. This news will have been devastating for the thousands of workers and their families affected by the redundancies at Jaguar Land Rover as well as for the companies in the supply-chain industries that are affected. When Starmer’s Government announced that they would underwrite a rescue loan for JLR last year, the Liberal Democrats asked that the Prime Minister assure workers that the deal would be enough to protect their jobs; it was not. This development lays bare the fact that the Government’s growth mission is falling far short. We need to see bold action from the Chancellor on growing the economy across the UK. Earlier this year, we called for the Government to review their tariffs on the steel sector due to the impact they would have on our manufacturing and defence industries, yet Ministers will not even negotiate a new growth and defence partnership with the EU that would unleash our auto industry by removing crippling rules-of-origin trade barriers. Is the Chancellor’s growth mission serious ambition or just words? What will the Government do to ensure that those highly specialised skills are not lost but fully utilised in our manufacturing sector?

I thank the hon. Member for those questions. She mentioned the cyber-attack and the £1.5 billion guarantee we gave to stand behind Jaguar Land Rover. That guarantee is still in place; it is there as a form of market reassurance for the company. JLR has not drawn on it yet, but it has served its purpose in reassuring the market. The company is clear that that is only one of the factors; it is as much about challenges in the Chinese market and global trade challenges. The hon. Member rightly asked about the relationship with Europe. I reassure her that at posts in capitals across Europe, Ministers, like me, are constantly engaging with member states and their representatives both on rules-of-origin issues and on the “made in Europe” agenda. One of the encouraging things we see in that process is those arguments being made not only by our industry but by the deeply interconnected other side of the supply chain across the channel with member states. I reassure her that we are working hard on that.

There is concern about this news among my constituents who work at JLR Halewood and those who work in the supply chain in the whole of the north-west of England. The five-week suspension of manufacturing last year as a consequence of the cyber-attack has left a legacy of concern about the future and about financial resilience issues for some companies. What steps is the Minister taking to ensure that the full impact of this announcement on the supply chain is mitigated as much as possible and that resilience in our automotive supply chain is boosted for the future?

I know how important Jaguar Land Rover is for my right hon. Friend’s constituents; she voices their concern constantly on their behalf. Jaguar Land Rover has been clear that the job losses are focused largely on back-end and management staff and that the productive staff will not be impacted. That should be a source of encouragement and reassurance to the wider supply chain. We are investing a huge amount into that wider supply chain. A moment ago I mentioned Agratas, where the £380 million investment leverages in £5 billion of investment. I could just as easily talk about the supply-chain pilots through DRIVE35 to ensure that the competitive edge and excellence we have in automotive engineering survives this global challenge period and we come out of it still as a productive and proud car-making nation.

In my constituency we have Jaguar Land Rover Solihull. The Minister will know that Jaguar Land Rover and the automotive sector are in the DNA of my constituents in the west midlands. I agree with him about the global headwinds, but there is a massive issue with the high levels of red tape owing to the Employment Rights Act 2025 and the national insurance rises, which will inevitably destroy consumer demand and make our automotive sector less competitive. Will he at least acknowledge that that has had an impact?

Absolutely, I recognise that it is our job to lower costs on the industry. That is why, for example, we are taking action on energy costs to make them more competitive. That should take us roughly to the European average so that we can compete with our nearest neighbours. I pay tribute to the hon. Member’s constituents who are staff at Jaguar Land Rover in Solihull. Just a few days ago, I was at Jaguar Land Rover in Coventry, seeing the extraordinary, almost sci-fi level of work done there. It is right that we express concern and worry for our constituents, but we should also celebrate the incredible manufacturing being done now, which will continue for generations to come.

I was particularly disappointed by this announcement on Saturday. Over the last two years, we have worked hard in Birmingham Erdington to protect jobs at Jaguar Land Rover’s Castle Bromwich site. Given the announcement of 4,000 job losses across JLR, my constituents are deeply concerned about what that means for their livelihoods following thousands of job losses in previous rounds of reorganisation. Will the Minister assure me today about the future of the Castle Bromwich site? If JLR plans future job losses, what steps are the Government taking with it to work with others to protect jobs not just now, but in the future? We want to ensure that there are no future job losses.

I thank my hon. Friend for the question. I know how important JLR is to her constituents: she makes that clear constantly to me and other Ministers. The key thing we can do is to invest in the company’s future productive capacity. I mentioned the investment in Agratas a moment ago, and recently we made substantial investment through DRIVE35 into software-defined vehicle research in the company. The conversation that we are having with JLR right now is about how to protect not just high-value jobs directly in JLR but the high-value jobs in the wider supply chain that so many of our constituents rely on.

JLR’s plan to cut 4,000 jobs is devastating for workers, families and communities in Coventry and across the west midlands. JLR is based in my constituency and its highly skilled workforce is vital to our region’s economy and industrial future. The trade union Unite is right to demand urgent answers and for every alternative to job losses to be explored. The Business Secretary has now met JLR and Unite, so can the Minister tell the House what has actually been secured from JLR, a company that has already been granted £1.5 billion of public money? Will the Department publish the company’s plans in full, rule out compulsory redundancies and make it clear that not a penny more of taxpayers’ money will support a company that is throwing thousands of workers on to the scrap heap?

Well, I agreed with the hon. Lady right up until the end there: we have to keep investing in JLR to secure those jobs. I met some of her constituents last week and felt their sense of pride. This is not just about jobs or economic production; it is part of the sense of local pride in her area. When we and the Secretary of State met the union and management earlier on, we pressed them on exactly those issues. The conversation was about the phasing of those changes, how they interact with the roll-out of the new models and when those job losses would kick in. The union and the business will continue to work on that, and we will continue that conversation as well.

Today’s announcement from Jaguar Land Rover is devastating for its workforce, for the automotive industry and for the wider supply chain. A manufacturing supplier to JLR in my constituency has lost more than 150 jobs. What access to finance will the Government provide to help west midlands firms diversify, enter new markets and protect skilled jobs?

My hon. Friend rightly says that Jaguar Land Rover and the other big automotive names do not exist in isolation; they are part of much wider supply chains. On the issue of access to finance and funding, obviously a lot of the DRIVE35 programme goes to those larger companies, but it goes right across that supply chain, investing in so many of the strengths that we have, particularly electric propulsion and software-defined vehicles. In addition, £50 million has been devolved to the mayor in the west midlands to work on those supply-chain resiliences, and we will continue to work with the mayor to agree what needs to be done to secure those supply chains for the future as we go through this pretty challenging period for automotive.

The Jaguar Land Rover hack started over a year ago: manufacturing ground to a halt and the Government stepped in and made the UK taxpayer the insurer of last resort to the tune of £1.5 billion. Yet the Government have still not said who did this to our country. It has been widely reported that the attack was state-sponsored. At a time when we should be having a national conversation about the threats we face, will the Government use this opportunity to tell us which country did this to us, and, more importantly, have there been repercussions?

I may look suave and debonaire, but I am not James Bond, so I will resist commenting on the attribution of that. It would be for the Minister for Security and the Home Secretary to do that; these are serious matters. What I will say is that we were right to put that £1.5 billion in place. It has not been drawn on, but it did give a vote of confidence to one of our most important manufacturers at a moment of genuine crisis.

I thank the Minister for his statement. I represent Redditch, which has a proud automotive history and is home to thousands of the 100,000-plus jobs that are part of the supply chain that supports JLR, and we are all deeply concerned about the statement from JLR. This Government did everything they could with the £1.5 billion loan—not bail-out—to support JLR, so will the Minister assure me that, if worse is to come, the Government will not falter in any way in giving support to protect these jobs? If the jobs are lost further down the road, they will never come back, as other areas in Birmingham can attest. Will the Minister assure me that this Labour Government will make sure that, whatever the headwinds facing JLR and the pressures from China, we will not lose this crucial industry in our country?