Jeremy Hunt has insisted a car battery crisis can be resolved without reopening the Brexit deal, despite the owner of Vauxhall warning that failing to do so could force it to close British factories.
The Chancellor said the Windsor Framework deal agreed between the UK and Brussels in February had “created a different relationship with the EU” amid calls to reopen post-Brexit trading arrangements.
Stellantis – which makes Vauxhall, Peugeot, Citroen and Fiat – said the present set-up with the EU poses a “threat to our export business and the sustainability of our UK manufacturing operations”.
So-called local content rules state that from next year, 45pc of the value of the parts used to make electric cars should originate in the UK or EU to qualify for trade without tariffs, which would be set at 10pc.
Stellantis had committed to making electric vehicles at its Ellesmere Port and Luton plants two years ago, which employ about 2,000 workers combined.
However, it warned: “If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close.”
Mr Hunt insisted that the Government would “talk proactively” with car manufacturers and the EU about the arrangements but said: “We are not talking about changing the deal.”
He told an audience at the Wall Street Journal CEO Council summit: “With the Windsor Framework we have a good deal.
“It creates trust on both sides. For all those kinds of issues, we are able to have a dialogue.
“We are able to talk about how lots of these issues can now be resolved in an atmosphere of mutual trust.”
He added: “What businesses want more than anything is stability.
“We are not talking about changing the deal but we are talking about making it work to mutual advantage.”
Rishi Sunak unveiled the Windsor Framework alongside European Commission President Ursula von der Leyen earlier this year in an effort to resolve the impasse over the Northern Ireland Protocol.
Ms von der Leyen later met with the King at Windsor Castle in an indication of improving relations between the UK and EU.
Mr Hunt said: “Pre that and pre Ukraine, many in the EU were worried that this was a bitter divorce where we would go our separate ways.
“Now they see we want to be a good European partner to our friends in the EU.”
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