UK prime minister, Sir Keir Starmer, has stepped up support for the auto industry and relaxed a net zero target, as his government responds to a ‘new reality’ for trade.
The Labour government was responding to the recent tariff announcement by US president Donald Trump, who hit auto imports into the US with 25% tariffs. Trump also imposed a 10% rate on UK imports.
The measures have thrown the global trading industry into chaos, as countries around the globe scramble to respond.
‘Plan for change’
In a speech later today (7 April), Starmer is expected to say:
“Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change.
“Now more than ever UK businesses and working people need a government that steps up, not stands aside. That means action, not words. So today I am announcing bold changes to the way we support our car industry.”
Net zero pushback
The government has announced that the planned phase-out of new petrol and diesel cars being made and sold in the UK will be pushed back to 2035, with additional funding provided to boost zero emissions vehicles production.
The government also promised that the modern Industrial Strategy would be published in full this spring, adding that it would support car manufacturers to meet this goal.
The original mandate planned to effectively ban the production and sale of new petrol and diesel vehicles by 2030. Then-PM Rishi Sunak pushed the date back to 2035 in response to a by-election victory in 2023.
Consultation
Transport secretary Heidi Alexander is expected to provide further details on the change to parliament later today.
She told LBC that the changes were the result of a consultation started last year, but that Trump’s tariff plan meant the government “looked at this with renewed urgency in the last week”.
Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, said that the government had “rightly listened to industry”:
“We await full details of the regulatory amendments but, 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.”
Green MP Siân Berry said that the Labour government was “wrong to apply the brakes on the sale of EV cars”, and called it “a boost to the fossil fuel industry”
In an article for the Times, Starmer denied that it was a change in commitments and said that it was part of “trusting” businesses.
“My priority — my only priority — is the people of Britain, and what makes them better off. Which is exactly why we will rise to this moment and make change work for hard-working people.”
End of globalisation?
Over the weekend, Starmer said that the UK must “rise to meet the moment”, as old assumptions on trade and defence appeared to be broken.
He insisted that that his government was prepared for this “new world”:
“We are ready for what comes next. The new world is less governed by established rules and more by deals and alliances. It demands the best of British virtues – cool heads, pragmatism and a clear understanding of our national interest.”
Treasury minister, Darren Jones, told BBC's Sunday with Laura Kuenssberg programme that "globalisation as we've known it for the last couple of decades has come to an end," following Trump’s new tariffs.
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