UK carmakers are facing “global challenges”, Jonathan Reynolds has warned, in the wake of Vauxhall owner Stellantis announcing plans to close its Luton plant.
The business secretary said issues in the industry amid the shift to electric vehicles weren’t limited to the firm and insisted ministers did “everything we possibly could” to avert closure.
Dutch carmaker Stellantis said the plans to close the van manufacturing plant, putting some 1,100 jobs at risk, meant it would consolidate electric van production at Ellesmere Port.
The company previously warned in June it may be forced to stop production in the UK should demand for electric vehicles (EVs) not increase.
Reynolds yesterday announced a consultation on the UK’s EV mandate, which sets strict targets for carmakers’ EV sales, in conjunction with £15,000 fines for each sale outside the mandate.
It will form part of a wider consultation on the Labour government’s plan to ban the sale of new “purely petrol and diesel” cars by 2030.
Speaking in the House of Commons, the business secretary called the news of the Luton closure a “dark day” and warned it came in the context of Ford’s plans to shed 800 jobs.
He said: “These challenges are not confined to any one company.
“Car manufacturers around the world are battling with increased costs, supply chain issues and changing consumer demand in a highly competitive, fast-evolving market.”
Many of the challenges faced by our car manufacturers are global in nature and they cannot be resolved by UK government intervention alone.”
But he insisted “decarbonisation must not mean deindustrialisation” and vowed to work with carmakers on the transition to cleaner cars and vans.
“Winning the race to net zero and having a world-leading automotive sector must go hand in hand,” he said.
Reynolds told MPs: “We will be shortly fast-tracking a consultation on our manifesto commitment to end the sales of new purely petrol and diesel cars by 2030.
“But we will use that consultation to engage with industry on the previous government’s ZEV transition mandate and the flexibilities contained within it.”
The ZEV mandate requires carmakers to have zero-emission – in effect purely electric – vehicles make up 22 per cent of sales this year, rising to 28 per cent in 2025 and beyond.
It was laid out under the Conservative administration, which set a deadline of 2035 for phasing out the sale of new petrol and diesel-powered cars, which Labour pledged to bring forward to 2030, with the suggestion hybrid cars could continue to be sold after this date.
Labour’s election manifesto promised a “phase-out date of 2030 for new cars with internal combustion engines”.
Shadow business secretary Andrew Griffith said: “The closure of the Luton plant, I fear, is just a down payment on jobs that will be lost under this government’s relentless attacks on industry, its neglect of the realities of business, and its failure to meet its promise not to raise taxes.”
He said it “is the direct result of a government policy that is simply unworkable for industry”.