Business and trade secretary Kemi Badenoch has said the issue with the UK’s automotive sector “isn’t to do with Brexit”, as Labour pressed the government for an “explicit industrial strategy”.
Her comments came as shadow business secretary Jonathan Reynolds warned that the “automotive sector has issued warning cry after warning cry that government policy risks shipping jobs overseas”.
Vauxhall’s parent company Stellantis said on Tuesday that it will be unable to keep a commitment to make electric vehicles in the UK without changes to the EU trade deal as a tariff deadline approaches.
Nissan has also issued warnings about the costs of manufacturing electric cars at its Sunderland plant because of high energy costs and inflation.
Speaking during Commons business and trade questions, Reynolds said: “It’s now been 100 days since we first welcomed [her] to her new post. In that time we’ve seen steel production fall to record lows, the automotive sector has issued warning cry after warning cry that government policy risks shipping jobs overseas.
“The US has seen incredible sums invested under the Inflation Reduction Act (IRA) and the EU has put forward its own significant response. Now meanwhile, the UK remains trapped in the Conservatives’ low-growth, high-tax loop with the lowest business investment in the G7.
“Now this morning, three of her predecessors from different political parties, each of them have said the government needs an explicit industrial strategy. Does the current business secretary agree with them?”
Badenoch said she had held meetings with her EU trade counterpart in light of the EU–UK Trade and Cooperation Agreement (TCA) “coming into review soon”.
She replied: “We have been able to launch the biggest free trade agreement that the UK has seen since we left the European Union and since the TCA.
“But he also mentions a lot of systemic issues which are being faced globally, he talks about the US IRA and the EU GDP, and he is right to raise these things but it is good for me to mention that there is a lot that we are doing in this space.
“For example, the issue that the automotive industries are talking about is around rules of origin. This is something that the EU are also worried about because the costs of the components have risen.
“This isn’t to do with Brexit, this is to do with supply chain issues following the pandemic and the war in Russia and Ukraine.
“I actually have had meetings with my EU trade counterpart, we are discussing these things and looking at how we can review them, especially as the TCA will be coming into review soon.”
Rishi Sunak has ordered talks with the EU about automotive concerns after warnings of an “existential threat” posed by the looming Brexit trade deal deadline.
Elizabeth Arnold, Press Association