Starmer promises ‘bold changes’ to rules over electric cars in Trump tariff response

Sir Keir Starmer has pledged “bold changes” to the rules around electric and new petrol and diesel cars in response to Donald Trump’s tariffs.

The prime minister will announce Labour’s plan to reinstate the 2030 ban on new petrol and diesel car sales on Monday, in a move expected to pile pressure on Britain’s beleaguered motor industry.

Businesses are currently grappling with the new rules from the White House, which mean a 25 per cent tariff is now applied to foreign cars imported into the US, while other products face a 10 per cent levy.

The prime minister’s announcement follows Jaguar Land Rover’s decision to suspended shipments to the US over the weekend, as they look to “address the new trading terms”.

Labour pledged in its election manifesto to restore the 2030 date, after it had been rolled back to 2035 by Rishi Sunak’s Conservative government.

open image in gallery

Sir Keir will say on Monday that “global trade is being transformed” and businesses need “a government that steps up”.

“That means action, not words,” the prime minister will say. “So today I am announcing bold changes to the way we support our car industry.

“This will help ensure home-grown firms can export British cars built by British workers around the world, and the industry can look forward with confidence, as well as back with pride.”

The decision to push ahead with reinstating a hard ban is accompanied by a significant package of flexibilities to help the industry transition more easily, the Department for Transport says, including postponing a ban on petrol or diesel vans until 2035.

However it comes during a perfect storm for the industry, not only hit by US tariffs, but also reeling from Labour’s national insurance hike and a new employment rights package.

An already struggling car industry saw the closure of the Vauxhall plant in Luton announced recently with others also in trouble.

But despite the industry’s long list of problems, the prime minister will press ahead with the dates for banning new fossil fuel vehicles.

It follows decisions to ban further drilling projects for oil and gas in the North Sea, as well as preventing further coal mining or fracking, aiding criticism it will leave the UK exposed to requiring energy from foreign suppliers.

In a bid to quell anger from carmakers, the Department for Transport has promised the flexibilities will support manufacturers making the transition.

The measures include cutting fines for manufacturers who do not meet their targets under the zero-emission vehicle (ZEV) mandate, which sets a percentage of how many new cars must be ZEVs.

Luxury supercar firms such as Aston Martin and McLaren will still be allowed to keep producing petrol cars beyond the 2030 date, because they only manufacture a small number of vehicles per year. Hybrids will also be allowed to be sold until 2035.

Sir Keir will vow on Monday that Labour’s plans will “ensure home-grown firms can export British cars built by British workers around the world and the industry can look forward with confidence, as well as back with pride”.

He is also expected to set out further measures aimed at supporting British industries later in the week.

open image in gallery

The Conservatives say the changes “will not undo the damage this Labour government has already caused” through tax hikes and a lack of preparation for President Trump’s tariffs.

Shadow business secretary Andrew Griffith said: “Although the government has performed a U-turn, they are firing on half cylinders when nothing less than full throttle to support our car makers is required.

“After nearly a year, Labour’s industrial strategy remains stuck on the grid and the business secretary and chancellor are busy undermining competitiveness in the form of higher taxes and new employment red tape.”

Transport secretary Heidi Alexander has said the motor industry deserves “clarity” in the economic context.

She said: “Our ambitious package of strengthening reforms will protect and create jobs, making the UK a global automotive leader in the switch to EVs, all the while meeting our core manifesto commitment to phase out petrol and diesel vehicles by 2030.”

Motoring industry body the Society of Motor Manufacturers and Traders (SMMT) has said that “greater action will almost certainly be needed” to safeguard manufacturers, given the tariff changes.

Chief executive Mike Hawes said: “UK-US negotiations must continue at pace, while the long-awaited industrial and trade strategies should prioritise automotive and be delivered at speed.”

The government’s announcement comes after Sir Keir spent the weekend in calls with foreign leaders about Trump’s tariffs, after he promised to do “everything necessary” to protect Britain’s national interest.

A Downing Street spokesperson said: “Discussing the announcement of additional tariffs by the United States, they all agreed that – as with defence and security – this is a new era for the global economy. Europe must rise to meet the moment and ensure the impact on hard-working people is minimised, while working closely with other countries to help maintain wider economic stability.

“The prime minister added that it would be important for the UK to strengthen its trading relationships with others across the globe at the same time.”