Vauxhall has announced a £189m investment package in its Ellesmere Port and Luton plants, creating 500 new jobs.

Nick Reilly, Vauxhall chairman, said the “UK continues to be a good place to manufacture, despite the high value of the pound”.

However, he warned that the continued strength of sterling was placing Vauxhall's operations under “significant pressure”.

The bulk of the package - £130m - will be invested in the IBC Vehicles assembly line in Luton, where more than 80,000 vans will be made as part of a joint agreement between General Motors and Renault.

A further £32m will be spent improving Vauxhall's car plant in Luton, which builds Vectra, with £27m earmarked for Ellesmere Port.