Vauxhall owner Stellantis has announced plans to close its van manufacturing plant in Luton, placing 1,100 jobs at risk.

The Dutch carmaker said it would instead consolidate electric van production at Ellesmere Port in Cheshire with a £50m investment.

It comes following reports the UK government will water down plans to fine automakers based on the number of zero-emission vehicles they sell.

Business secretary Jonathan Reynolds is expected to announce a consultation on the rules at an industry dinner on Tuesday evening, following intense lobbying from a number of British carmakers.

Carmakers have voiced concern over slowing demand from private consumers, although the industry’s figures for take-up, provided by the Society of Motor Manufacturers and Traders (SMMT), are disputed by some experts.

Stellantis warned in June it may be forced to stop production in the UK should demand for electric vehicles (EVs) not increase.

Companies House accounts show that prior to Tuesday’s announcement, Vauxhall had already cut its employee count from 1,488 to 1,283 in the latest financial year, even as profit rose and turnover reached over £2.5bn.