Is the British car industry on the skids once more?

As Vauxhall plans to close its Luton plant putting 1,100 jobs at risk, Howard Mustoe asks if government policy is to blame

- Howard Mustoe

Business minister Jonathan Reynolds has said that he did “everything possible” to prevent the planned closure of Vauxhall’s Luton van-producing plant, where 1,100 jobs are at risk.

The closure was blamed on the government’s plan to force carmakers to build more electric vehicles, fining them £15,000 a car if they miss their targets. The government will review these rules, said Mr Reynolds.

The blow comes after a comparatively upbeat time for carmaking in the UK. Last year, a slew of investments were announced, appearing to arrest the industry’s slow decline and even offer opportunities for growth.

Carmakers including Aston Martin, Jaguar Land Rover (JLR), Mini and Nissan announced plans to either build battery plants or signed deals to acquire the technology to develop fleets of new electric vehicles. It was not all good news. Britain’s fledgling battery-maker Britishvolt went under last January, taking with it the UK’s only independent electric powerplant developer.

But deals like JLR’s decision to open a £4bn battery plant secured jobs in the industry after years of shrinking, with recent losses including the Honda factory in Swindon, which closed in 2021 after 36 years with the loss of 3,500 jobs. But now, the threat of factory closures is back after Vauxhall owner Stellantis said its Luton van plant faces the axe.