Sunak tries to delay Brexit rules in bid to save thousands of UK car industry jobs

Rishi Sunak’s authorities is known to be lobbying the EU to delay a change in manufacturing rules in the Brexit commerce deal after Vauxhall’s mother or father firm warned it might shut its UK factories.

Stellantis stated will probably be unable to hold a dedication to make electrical automobiles in the UK with out modifications to Boris Johnson’s Trade and Cooperation Agreement (TCA).

Business secretary Kemi Badenoch has raised the difficulty together with her Brussels counterpart, and held a pre-arranged assembly with Stellantis chiefs on Wednesday.

She has additionally raised the motor industry’s considerations in regards to the TCA with chancellor Jeremy Hunt and overseas secretary James Cleverly, in accordance to Whitehall sources.

The authorities is lobbying the EU to delay a 2024 deadline for modifications in how a lot an electrical car must be manufactured in the UK.

It comes as Labour chief Sir Keir Starmer stated “we need a better Brexit deal” with the EU to guarantee companies resembling Vauxhall can proceed to function in the UK.

Stellantis has known as on the federal government to attain an settlement with the EU to preserve current rules till 2027 – somewhat than 2024’s deliberate modifications which state 45 per cent of an electrical car’s worth ought to originate in the UK or EU to qualify for commerce with out tariffs.

Without assembly the necessities, vehicles manufactured in the UK can be hit with a 10 per cent tariff, making home manufacturing and exports uncompetitive with vehicles constructed elsewhere.

Stellantis – the mother or father of Vauxhall, Citroen, Peugeot and Fiat, which employs greater than 5,000 staff in the UK – dedicated to making electrical automobiles at its Ellesmere Port and Luton vegetation two years in the past.

But in a submission to an MPs’ inquiry, the corporate stated the Brexit deal was a “threat to our export business and the sustainability of our UK manufacturing operations”.

It stated the rise in the associated fee of uncooked supplies meant it was “unable to meet these rules of origin”. Part of the issue is {that a} battery pack can account for up to half a brand new EV’s price, with batteries heavy and costly to transfer lengthy distances.

A No 10 spokesperson confirmed Ms Badenoch “has raised this already with the European Commission – it’s been raised at official level as well and we hope to come to a resolution with the EU on this”.

Asked whether or not the January 2024 deadline may very well be pushed again, Mr Sunak’s spokesperson stated: “We’re looking to what solutions we can put in place to a problem that we know exists, I’m not going to get ahead of the conversations we’re having with the EU.”

Rules of origin of electrical vehicles and batteries had been among the many last components of the Brexit deal agreed between then-PM Boris Johnson and European Commission president Ursula von der Leyen in 2020.

Transport minister Richard Holden advised there have been “further tweaks” which may very well be made to the deal.

Mr Holden informed LBC: “If more work needs to be done, I’m absolutely certain that the business and trade secretary will do that over the coming days and weeks.”

Sir Keir went additional and vowed to renegotiate Brexit, saying that whereas rejoining the EU was not on the desk, “we do need to improve that deal”.

He added: “Of course we want a closer trading relationship, we absolutely do. We want to ensure that Vauxhall and many others not just survive in this country but thrive … so yes we need a better Brexit deal. We will make Brexit work.”

Shevaun Haviland, the director basic of the British Chambers of Commerce (BCC), backed Sir Keir’s stance – telling The Independent the commerce cope with the EU had to be improved. “Lots needs to be done,” she stated.

Andy Palmer, former chief working officer at Nissan, stated all the car industry in the UK was in danger.

He stated it was “impossible to meet local content rules unless you source your battery within the UK or EU” however the “supply chain at the moment isn’t there” in Britain. “The cost of failure is very clear. It is 800,000 jobs in the UK, which are those jobs associated with the car industry.”

Manufacturers stated Britain had to appeal to extra battery manufacturing to assist safe the long run of the industry. Chancellor Jeremy Hunt hinted there would quickly be a improvement, saying: “Watch this house, as a result of we’re very targeted on ensuring that the UK will get EV and manufacturing capability.

But the top of collapsed battery cell producer Britishvolt blamed the federal government – and tensions between Mr Johnson and Mr Sunak – for its failure. Orral Nadjari stated the UK had “misplaced that window of alternative” to develop gigafactories.

Denying his claims, a authorities spokesperson stated: “These claims are completely untrue.”

Mike Hawes – chief govt of the Society of Motor Manufacturers and Traders – additionally known as for pressing motion. The industry chief stated the rules of origin for batteries “pose a significant challenge to manufacturers on both sides of the Channel”, earlier than including: “A pragmatic solution must be found quickly.”

David Bailey, professor of enterprise economics on the Birmingham Business School, stated the commerce rules problem was an “existential threat to the UK car industry”.