Prime Minister Sir Keir Starmer and Net Zero Secretary Ed Miliband are facing accusations of threatening to destroy the UK car industry in their rush to ban petrol vehicles. The UK car industry employs almost 800,000 people, including 156,000 directly in manufacturing. However, tough rules designed to force motorists to switch to electric vehicles are “threatening jobs and business viability,” according to industry leaders.
Labour's EV Mandate Under Fire
Former Labour Cabinet Minister Liam Byrne, Chair of the Commons Business and Trade Committee, is urging the Government to speed up a promised review of the rules but condemned Ministers for “choosing to press ahead.” Labour has banned the sale of cars powered solely by petrol and diesel from 2030, with hybrid vehicles allowed until 2035. Some restrictions have already come into force, requiring manufacturers to ensure 33% of cars sold this year are “zero emission” (electric vehicles), rising to 80% by 2030.
If carmakers miss the target, they face a fine of £12,000 for each additional petrol or diesel car sold. However, manufacturers warn that many motorists simply do not want to buy electric vehicles, and the industry is subsidising zero-emissions cars by £5 billion every year in an attempt to drive up sales by reducing prices.
EU Offers More Time
The European Union is giving manufacturers five more years to adapt, with a ban on the sale of new petrol cars not coming into force in EU nations until 2035. There are also concerns that the UK is failing to expand production of the batteries used to power electric vehicles, which require giant specialist factories.
The Society of Motor Manufacturers and Traders (SMMT), which represents UK carmakers, says the subsidies are “unsustainable.” Mike Hawes, the body’s Chief Executive, said: “The industry has invested billions in the vehicles, and is spending billions more incentivising these vehicles to try and push demand ahead of its natural level towards mandated sales targets. That level of subsidy is unsustainable and is threatening jobs and business viability at the very time investment decisions are being made. A review is now urgent to ensure the pathway to net zero reflects reality and avoids the deindustrialisation of one of the UK’s most critical sectors.”
Political Pressure Mounts
The House of Commons Business and Trade Committee wrote to Ministers urging the Government to speed up a review of the policy, known as the Zero Emission Vehicle (ZEV) Mandate, which is currently due to be completed in 2027. In response, Treasury Minister Lucy Rigby said a review of the ZEV Mandate “will be completed within the next 12 months,” effectively confirming there will be no change.
Mr Byrne, a former Chief Secretary to the Treasury, said: “Ministers recognise our automotive industry faces serious industrial challenges - but see no need for urgency in fixing the ZEV Mandate that threatens to tip much of the industry into crisis.” He added: “Surely it’s now time to pause, and check whether aligning with the proposed European timetables makes sense, not least because our automotive supply chains are so interwoven.”
Trade union Unite has also warned that the current system is “fundamentally flawed” and threatens jobs. Unite general secretary Sharon Graham said: “The current ZEV mandate is significantly contributing to the loss of automotive jobs in Britain.”
However, campaign group Green Alliance said any watering down of the rules would ensure the UK remains dependent on expensive fossil fuels. A Government spokesperson said: “We remain committed to phasing out all new non-zero emission car and van sales by 2035, and the ZEV Mandate review will be concluded by early 2027 as planned. It has never been easier or cheaper to own an EV, especially against the backdrop of high and fluctuating prices at the pumps. We recognise manufacturers are facing challenges, but we’ve demonstrated flexibility at pace and will do so again if necessary. Last year, we introduced flexibilities to make it easier for manufacturers, who can meet the Mandate in several ways - not just through ZEV sales.”
