Starmer wants Britain at front of electric car ‘revolution’ as reforms unveiled

Sir Keir Starmer has said he wants British manufacturers to be at the “forefront” of the electric vehicle “revolution”, as he confirmed a raft of new reforms to boost manufacturers in the wake of US President Donald Trump’s tariffs.

The Prime Minister said that the “new era of global instability” would push the Government to go “further and faster” to support businesses.

Under new measures to be announced on Monday, rules around fines for manufacturers who do not sell enough electric cars will be relaxed, and supercar firms will be exempt.

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

Jaguar Land Rover said over the weekend that they would “pause” shipments to the US, as they look to “address the new trading terms”.

As part of his announcement in the West Midlands, Sir Keir will reinstate the 2030 ban on the sale of new petrol and diesel cars.

Hybrids

But regulations around manufacturing targets on electric cars and vans will also be altered, to help firms in the transition, and new hybrids will be on the market for another five years.

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

New hybrids and plug-in hybrid cars will be allowed to be sold until 2035. Petrol and diesel vans will be able to be sold until 2035, as well as all hybrid models.

Officials are also going to make it easier for manufacturers who do not comply with Government-mandated sales targets to avoid fines, and the levies will be reduced.

Officials have said that support for the car industry will continue to be kept under review, as the full impact of the tariffs announced last week becomes clear.

Describing the car sector as “the engine room of British industry”, Sir Keir wrote in The Times: “We want British car companies to be at the forefront of the electric vehicle revolution at home and overseas.”

In the same piece, he said that “in this new era of global instability we will go further and faster to support businesses and workers”.

Sir Keir said that this will be “just the first in a series” of announcements from the Government, designed to provide “certainty” and “support for industry”.

Measures

The Prime Minister spent the weekend in calls with foreign leaders about the tariffs, after he promised to do “everything necessary” to protect Britain’s national interest.

After calls with the leaders of France, Italy and Australia in recent days, Sir Keir used conversations with European Commission president Ursula von der Leyen, German Chancellor Olaf Scholz and leader of the German Christian Democratic Union party Friedrich Merz, to reiterate his disappointment at the measures announced by the White House.

Germany is one of the countries due to face higher tariffs in the coming days, as the EU has been hit with a 20% rate.

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 that “given the potentially severe headwinds facing manufacturers following the introduction of US tariffs, greater action will almost certainly be needed to safeguard our industry’s competitiveness.

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

The Conservatives have accused the Government of “firing on half cylinders” when support for car makers needs a “full throttle”.

Shadow business secretary Andrew Griffith said: “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.”

The Liberal Democrats have said that the moves on their own “won’t be enough to protect the sector from the impact of Trump’s damaging taxes”.

Trade spokesman Paul Kohler said “ministers should also be exploring better incentives for consumers to buy electric vehicles, including VAT cuts for public charging and postponing the planned increase in vehicle tax on electric cars”.

Deficit

The US president said he would not back down on tariffs unless countries even their trade balance with the US.

Speaking on Air Force One on a flight back to Washington, Mr Trump said he did not want global markets to fall, but that “sometimes you have to take medicine to fix something”. He also said he had spoken to leaders from around the world.

“They’re dying to make a deal,” he said. “And I said, we’re not going to have deficits with your country. We’re not going to do that, because to me a deficit is a loss.

“We’re going to have surpluses or, at worst, going to be breaking even.”