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Shadow business secretary Jonathan Reynolds said a ban on the sale of new petrol and diesel cars from 2030 would be reinstated within months if Labor wins the next election to restore “certainty” to the car industry.
Speaking to the Financial Times, Reynolds said the party would also set new binding targets for parliament and regional authorities to roll out electric vehicle charging points to improve the patchy national network.
He said the Conservative government had put carmakers in a difficult position by delaying a ban on the sale of new petrol and diesel cars from 2030 to 2035 while insisting on a sharp increase in electric car sales in previous years.
“The Conservative government has been destroying international investment through cuts and changes… The endless pause in government policy has brought the British car industry to a standstill.” Reynolds said.
“The industry itself wants 2030, they’re very clear about that, SMMT (Society of Motor Manufacturers and Traders) are clear about that, and the major UK car manufacturers are clear about that.”
Reynolds will set out Labour’s new “car industry plan” in a speech at Labour’s annual conference in Liverpool on Monday. It is the first of several departmental plans to underpin the party’s industrial strategy.
Chancellor Rishi Sunak announced last month that a ban on the sale of new combustion engine cars and vans from 2030 would be postponed until 2035 in what he called a “new approach to net zero emissions”.
However, the Zero Emission Vehicles Directive, which will come into effect in January, stipulates a minimum proportion of electric vehicles each manufacturer must sell, starting at 22% and increasing to 80% annually by 2030.
While some carmakers welcomed the delay to 2035, it has also raised concerns that consumers will no longer buy electric vehicles.
The SMMT, which represents the UK automotive industry, warned motorists of the potential for “chaos”.
Reynolds said the new Labor government would move quickly to reinstate a new sales ban in 2030 to restore “certainty” to the industry.
Sunak believes delaying the ban will save households thousands of pounds without jeopardizing the UK’s target of net zero emissions by 2050.
But Reynolds said delaying the phase-out would ultimately increase costs for households because the lifecycle costs of electric cars are cheaper than petrol cars and their upfront prices are expected to fall over the decade.
Under the strategy, a Labor government will co-fund new gigafactories in the UK to meet the target of supplying 200GWh of batteries per year for domestic car production.
Labor had previously pledged to co-invest £2 billion in the nascent industry, but has now pledged closer to £1.5 billion. The adjustment reflects the Conservative government’s recent commitment of £500 million to support Jaguar Land Rover’s investment in a new gigafactory in Somerset.
Labor will pledge to cut planning approval times for “major national infrastructure projects” in growth sectors including gigafactories “from years to months”.
The strategy includes ensuring a consistent policy environment, supporting the development of electric vehicles and setting binding targets for the rollout of charging stations.
Responsibility for achieving these targets will be devolved to regional and local authorities, while planning restrictions on new infrastructure will be relaxed.
Labor will also pledge to support grid expansion to support new charging networks.
Reynolds said Labor would free up and realign existing funds, including the £950m Faster Tolls Fund, which aims to increase motorway tolls and was announced in 2020 but has not yet been launched.
But Sir Keir Starmer’s party will not commit to announcing a major subsidy scheme for electric car buyers, given how fast electric car use will grow in the coming years.
“We haven’t made any specific commitments on subsidies in our strategy because if you think about the trajectory you want sales to take, you don’t necessarily want to invest a certain amount of money right now that’s going to be market-responsive,” Reynolds said.
There were fewer incentives for consumers to buy electric cars last year, but corporate car buyers still received generous tax breaks.
Reynolds stressed that people would still be able to buy second-hand petrol and diesel cars after 2030. “A lot of it has to do with new car sales,” he said.
Labor will also introduce standardized battery “health tests” to boost confidence among second-hand electric car buyers.
Asked whether someone who bought a new car in 2029 or a used car in 2031 would still be able to drive it, Reynolds responded: “Yes. It’s about phasing out new cars.”
Svlook
