The Secretary of State for Transport (Heidi Alexander)
With permission, I shall make a statement about the zero emission vehicle mandate. Today, this Government are giving British car makers certainty and support on the transition to electric vehicles, as we set out plans to back industry in the face of global economic headwinds. We have worked in close partnership and at pace with colleagues in the Scottish Government, the Welsh Government and the Northern Ireland Executive, whom I would like to thank.
The automotive industry is a cornerstone of our economy. It supports over 150,000 jobs and generates £19 billion every year. Today, with Government backing, it must negotiate the turbulence of fresh global economic challenges. For too long, the sector has been held back by a lack of long-term certainty. That changes now. This Government listen and act. We have listened to car manufacturers, large and small, from Sunderland to Solihull, and from Crewe to Coventry. Car makers have told us what they need to not just survive, but thrive. What they want is what we are delivering: practical, sensible reforms that will unlock investment, protect jobs and strengthen Britain’s leadership in the zero emissions transition.
Today, I can confirm that the Government are maintaining our manifesto commitment to phasing out the sale of new petrol and diesel cars by 2030. I can also reconfirm our commitment to all new cars and vans being 100% zero emission from 2035; there are no changes to the trajectory of the transition set out in the ZEV mandate regulations. We support the role of hybrid vehicles as a crucial stepping-stone in that journey; new full hybrids and plug-in hybrids will be on sale until 2035. That strikes the right balance. We are being firm on our climate commitments, but flexible on how we meet them, because our aim is not to impose change for its own sake, but to enable industry to make the transition in a way that matches supply with demand, and to support businesses, and the jobs that they provide, every step of the way.
We are significantly increasing the flexibility within the ZEV mandate. Manufacturers will have more freedom on how they meet targets, including the ability to sell more EVs towards the end of this decade, when demand is projected to be higher. We are also extending the ability to borrow and repay credits through to 2030, and the ability to earn credits for cleaning up non-ZEV fleets all the way out to 2029, so that companies can manage their pathways more effectively. This recognises the real-world challenges that British businesses face, and gives them the smoothest possible road to run on.
We are also reducing fines for missing ZEV targets from £15,000 to £12,000 per vehicle. Where fines are levied—for the vast majority of manufacturers, they will not be—the revenue will be recycled directly back into support for the sector, because this Government invest in solutions and do not punish ambition. Let me be clear: this is not a retreat from our ambitions on EVs—quite the opposite. It is right that the threat of fines remains, as it is an inescapable fact that the domestic transport sector remains the UK’s single largest carbon emitter, accounting for 30% of emissions in 2024. That is why we are doubling down on our commitment to the electric transition. There is more than £2.3 billion available to support industry and consumers. That includes funding for new battery factories, EV supply chains and charging infrastructure, and grants for zero emission vehicles.
The public are already leading the way. March saw a 43% increase in electric vehicle sales, compared to the same month last year. February was a record month too, with EVs accounting for one in four new car sales. That surge in demand shows that we are moving in the right direction, but it also shows the importance of maintaining momentum, so we will continue working with industry to ensure demand keeps pace with supply, building a sustainable market for the long term.
The infrastructure is growing, too. There are over 75,000 public charge points now available, and more than £6 billion of private investment is lined up for UK charge point roll-out by 2030. Today, a new charge point is installed every 29 minutes. That is more than 50 every day. Families charging at home can now save up to £1,000 a year, compared with petrol drivers. An EV charged at home overnight can run for as little as 2p a mile. That is putting money in people’s pockets while relieving pressure on the planet.
We know that one size does not fit all, which is why small and micro-manufacturers will be exempt from the new measures. It is why vans will have five extra years to go green, because we recognise their unique role in the economy and in giving businesses the time that they need to adapt. It is why we are making space for hybrid vehicles in the mix, not as a compromise, but as a contribution. Hybrids offer lower emissions today without requiring overnight shifts in driving behaviour or infrastructure. They build public confidence, support choice and ensure that no one is left behind in the transition.
This is not just a transport, environmental or economic policy; it is part of this Government’s plan for change. It is a long-term effort to deliver clean, sustainable and high-quality growth, creating new jobs in battery production, EV supply chains and infrastructure, anchoring manufacturing here in the UK and supporting skilled apprenticeships in clean tech and advanced engineering. With today’s announcement, British names such as Rolls-Royce, Land Rover and Vauxhall will have the certainty they need to plan, invest and lead. We are backing British businesses to succeed at home and abroad. These reforms are fair to manufacturers, reasonable for workers and right for the climate challenge ahead.
I know some people might retreat to tired arguments about a war on motorists, but this Government are focused on real challenges, not imaginary grievances. Most of us are motorists or passengers; we are all in this together. What we need is not division, but direction, and that is what we are delivering today by listening to industry, following the data and building a strategy grounded in evidence and ambition.
When we came into government, we promised to prioritise one thing above all else: growth—for industry; for clean transport; and for people, places and pay packets. With these bold, practical reforms, backed by the Prime Minister’s plan for change, that is exactly what we are delivering. I commend this statement to the House.
Mr Speaker
I think, on his birthday, we should hear from the shadow Secretary of State.
Gareth Bacon
I thank the Secretary of State—[Interruption.] That was a very helpful intervention by the hon. Gentleman; he is completely right. I thank the Secretary of State for her statement, and for advance sight of it. The announcement by the United States of America that 25% tariffs will be imposed on UK automotive exports has understandably caused significant concern in the automotive sector. Automotive manufacturers now face tariffs of 25% on around £8 billion-worth of car and auto parts exports—a potentially devastating blow for the automotive industry. I assure the Secretary of State that we will support the Government when they do sensible things to reverse the impact on our already fragile economy. In that vein, I am glad that the Government have recommitted to negotiating a better deal with our closest ally and largest single-country trading partner, and I sincerely hope that they are successful in their negotiations.
However, on the substance of the right hon. Lady’s statement, I cannot share her enthusiasm for the rest of Labour’s plans. The reality is that today, Labour is simply trying to clear up the uncertainty that it has contributed to. When the previous Conservative Government reacted to sluggish automotive trade figures by making the pragmatic decision to delay the ban on new diesel and petrol cars from 2030 to 2035, aligning the UK with major global economies such as France, Germany, Sweden and Canada, Labour accused us of undermining the automotive industry. This morning, the Secretary of State criticised the previous Government for chopping and changing, and a consultation put out by Labour claimed that our policies caused “great harm” to the UK’s reputation as a leading nation in the EV transition by moving the goalposts. However, that is precisely what Labour did upon taking office by ideologically reversing the 2035 deadline. The plans announced over the weekend do not place the automotive sector in a better position than it was when we left office, despite some minor adjustments to the zero emission vehicle mandate.
What is more, this announcement will not undo the damage that this Labour Government have already caused. Their introduction of a £25 billion national insurance jobs tax in their first Budget was a major blow to businesses; we have warned for months that this tax will harm industries, and the automotive sector is no exception. The Secretary of State will know that US tariffs on UK car exports are set to cost the automotive sector £1.9 billion. Combined with the Government’s jobs tax—which is predicted by the Office for Budget Responsibility to put 50,000 jobs at risk, and is likely to cost the automotive sector an additional £200 million—that double whammy is going to be very difficult for the sector to absorb.
Indeed, despite today’s announcements, the Society of Motor Manufacturers and Traders has stated that zero emission vehicle mandate targets remain “incredibly challenging”. In its words:
“ZEV Mandate targets are incredibly challenging, especially with a paucity of consumer demand and geopolitical upheaval. Growing EV demand to the levels needed still requires equally bold fiscal incentives…to give motorists full confidence to switch”,
but that is not what the Government are offering. Instead of the “bold changes” that the Prime Minister boasted of at the weekend, what we have is mere tinkering at the edges. Allowing producers of luxury vehicles, such as Aston Martin and McLaren, to be exempt from the 2030 ban on the sale on new internal combustion engine vehicles is welcome, as is the news that all forms of hybrid cars will be available until 2035. However, this does not go anything like far enough. The Government are still proposing to increase the level of tax liability on the value of hybrid company cars by as much as 16%, which could potentially cost individual drivers thousands of pounds each. The reduction in fines for missing EV sales targets from £15,000 to £12,000 per vehicle is nothing to be celebrated—it is like drowning at the depth of 100 metres instead of 120 metres.
Over the past few months, we have heard from numerous businesses that they simply cannot cope with the ZEV mandate. In October, the chief executive officer of Jaguar Land Rover warned that the mandate was causing severe disruption to the new car market. Not long after, Vauxhall announced the closure of its Luton factory, citing the ZEV mandate as a key factor in making that plant economically unviable. More recently, uncertainty has surrounded Plant Oxford, the home of the Mini since 1959. Last year, excluding fleet sales, the fact is that only 10% of private purchases of new vehicles were electric. Far from doing retailers a favour, the Government’s offer to fine them a small amount less for failing to sell a product that consumers demonstrably do not want is a kick in the teeth to the automotive industry.
I must therefore ask the Secretary of State the following questions. With just one in 10 private buyers purchasing an electric vehicle in 2024, why are the Government still trying to force people to buy something for which there is limited consumer demand at present? Is she really pretending that any of the measures announced today were not already in train before the tariffs were announced? Will she commit to reversing the hike in the hybrid company car tax? Does she really think that reducing the fine for each car that fails to comply with EV quotas will be enough to mitigate the impact of tariffs? Does she not believe that, rather than chasing an arbitrary timeline, now is the time for a more gradual transition to electric vehicles, one that would allow the sector to mitigate many of the challenges it is currently facing? Finally, does she recognise that the combined impact of the ZEV mandate, the jobs tax and external tariffs is a perfect storm for the automotive sector, which is facing significant and exacerbated challenges because of the choices her party has made over the past nine months?
Heidi Alexander
I also extend my birthday wishes to the shadow Secretary of State. I hope he is grateful for the two birthday presents I have given him: not only a statement but a general debate, so that we can face each other across the Dispatch Box not once but twice today.
It is rich for the shadow Secretary of State to blame uncertainty in the automotive sector on this Government. I can only think that he has some sort of selective amnesia going on, because it was his Government who introduced this policy. They then delayed the phase-out date, tanking EV demand by 15% almost overnight. We had the spectacle of the previous Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak) standing up to make a speech pushing that date back out to 2035. Almost overnight, we saw those sales tank. The shadow Secretary of State should be explaining to Britain’s car manufacturers why his party faffed about so much, costing them millions and arguably leaving the sector less resilient to the global economic headwinds it now faces.
The shadow Secretary of State claims that this is a moment when we are tinkering at the edges, but nothing could be further from the truth. This is a significant moment for industry. He quotes the SMMT, and I just gently say to him that Mike Hawes, its chief executive, said this morning:
“The government has rightly listened to industry, responded quickly to global dynamics and recognised the intense pressure manufacturers are under.”
The shadow Secretary of State is also right to raise Jaguar Land Rover, which is affected by the imposition of the global tariffs that President Trump announced recently. I point out to the hon. Gentleman that Adrian Mardell, CEO at JLR said:
“We welcomed our announcement of the increased flexibilities in the zero emission vehicle mandate, and the clear commitment from Government to incentivise electric vehicle uptake and invest in infrastructure.”
The shadow Secretary of State also said that consumers do not want to buy electric vehicles. He needs to do his homework; the UK is the third largest market for electric vehicles in the world, after the US and China. It is the largest market in Europe. Last year—[Interruption.] He can chunter as much as he wants. Last year, 382,000 EVs were sold. We have had record figures in February and March this year, where we have seen demand for EVs go up by more than 40% compared with the same month in the previous year.
The shadow Secretary of State claims that we were going to make this announcement anyway. Well, he is right that we have been talking to industry for a number of months, and we were always going to have to do something to clear up the dog’s breakfast of a policy left by his Government. Clearly, the announcement last week about US tariffs on the car industry has made it all the more important that we act with pace and urgency. It is completely right that we have provided the certainty and clarity for which the sector has been calling for years.
The shadow Secretary of State claims we are not going far enough. We are investing £2 billion in an automotive transformation fund, which will ensure we can build the battery gigafactories of the future, support the EV supply chain and ensure that those high-skilled jobs of the future are available in communities across the country. Between now and 2030, we are spending £200 million supporting the roll-out of charge points, backed by £6 billion of private investment. We are spending £120 million on plug-in vehicle grants, giving people who want to purchase a new van up to £2,500 and those wanting to purchase a larger van up to £5,000.
I say to the shadow Secretary of State that this Government are acting where his Government failed. We are giving certainty to businesses, protecting jobs in a critical industry, cutting carbon and fostering a competitive market to benefit consumers.
Catherine Atkinson (Derby North) (Lab)
Today’s news on support for our automotive industry in the move towards electric vehicles will be welcomed by my constituents, including those who work for the nearby Toyota plant at Burnaston. Will the Secretary of State continue this encouraging level of engagement and responsiveness to industry concerns? Will she confirm that, to make sure that the transition is a success, this Government’s wider industrial strategy will further back British auto manufacturers?
Heidi Alexander
I know that the Under-Secretary responsible for the future of roads, my hon. Friend the Member for Nottingham South (Lilian Greenwood), has visited the Burnaston plant in my hon. Friend’s constituency, and I understand what a critical employer it is locally. Toyota will benefit from many of the changes that we have announced today. We are allowing the sale of both full hybrids such as the Toyota Prius and plug-in hybrids after 2030, and Toyota will also benefit from the extension and expansion of the CO2 transfer caps. Moreover, if it is ever in a position in which it needs to pay fines, it will pay them at a lower level—and we would, of course, reinvest that money in supporting the sector. I can give my hon. Friend the assurance that she and her constituents want: we will continue to support this vital sector.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Mr Paul Kohler (Wimbledon) (LD)
I thank the Secretary of State for her statement, and for advance sight of it. Let me also congratulate the shadow Secretary of State on his birthday, and note that he is much younger than the Liberal Democrat spokesperson.
It is clear that the Government must take urgent steps to help the car industry make the switch to electric vehicles. Although increasing flexibility in the mandate is welcome, voices across the industry have made it clear that we also need to bolster demand by lowering the barriers for individuals and businesses to purchase electric vehicles. As the Secretary of State knows, the recent surge in demand to which she referred was a result of significant discounting to promote sales. It is crucial that, as well as improving the charging network, we end the inequality between public and private charging by bringing the VAT rate for public charging into line with that for home charging, at 5% rather than 20%. Not only is the present system damaging demand, but it is wrong to penalise those who have no access to private charging. Ministers should also postpone the increase in vehicle tax on electric cars, and explore the possibility of reintroducing the plug-in car grant.
As the Secretary of State made clear on the media round this morning, the spectre of Trump’s tariffs also looms large over the industry. If the Government are serious about protecting car manufacturing in the UK, the Prime Minister must continue to work with our allies in Europe and around the world on a co-ordinated response. The only way to tackle Trump is to negotiate from a position of strength, and to show that the UK is not alone and will not be bullied.
May I ask the Secretary of State three questions? First, what conversations has she had with the Chancellor about lowering the public charging rate to 5%, and what other measures are the Government considering to strengthen EV demand? Secondly, can she confirm that the measures announced today are a response to the ZEV consultation that ended in February, and tell us what, if any, additional measures are being considered in respect of the tariffs that have since been announced? Thirdly, will the Government start negotiations with the EU about the formation of a UK-EU custom union, to cut red tape not only for vehicle manufacturers but for all UK industries?
Heidi Alexander
I assure the hon. Gentleman that the Government keep the VAT variation between public and private charging under review. The 20% standard rate to which public charge points are subject applies to most goods and services, with very few exemptions. We are trying to give people low-cost and affordable options for public charging by investing £380 million to roll out overnight chargers, which are cheaper and will be installed to help those without a driveway. Today, Brighton & Hove City Council confirmed that it had signed the contracts to deliver 6,000 of those chargers, and in February Midlands Connect announced that it was rolling out more than 16,000 across the midlands, helping drivers to charge their vehicles for less.
The hon. Gentleman asked me whether today’s announcement was a response to the consultation that we launched at the end of December, which closed in February. It is indeed a Government response to that consultation. As for the discussions that we will have with European colleagues, we will continue those discussions. Although the hon. Gentleman tried to tempt me into giving him a commitment to rejoin an EU customs union, I am afraid that that is not a commitment I can give.
Bill Esterson (Sefton Central) (Lab)
On behalf of those of my constituents who work at JLR Halewood, I thank my right hon. Friend for the stability and confidence that she has given to our automotive industry; it will be enormously reassuring to them. The last Government confirmed through Mark Harper, the then Secretary of State, that it was already cheaper for drivers to switch to electric vehicles—he did so from the Dispatch Box this time last year. For those of us who are able to plug in at home, it is cheaper by up to £1,000 per family, as she said in her statement. May I encourage her to work with the Energy Secretary on reducing the cost of electricity more widely to benefit those of us who cannot plug in at home, and to improve consumer demand, which is so crucial to supporting our manufacturers?
Heidi Alexander
I can assure my hon. Friend that I will continue to work across Government with colleagues in the Department for Energy Security and Net Zero, and in the Department for Business and Trade, in order to make the take-up of EVs as affordable as possible for individuals who want to make the transition. He is entirely right to point out that, compared with a petrol car, drivers can save up to £1,000 a year if they mostly charge at home, and that an EV can be run for as little as 2p per mile if charged at home. Half of all used electric cars are now sold for under £20,000, and there are 29 brand-new electric cars on the market for under £30,000.
Mr Richard Holden (Basildon and Billericay) (Con)
I am proud to have Ford’s UK technical headquarters, which employs thousands of fantastic workers in high-quality R&D jobs, at Dunton in my Basildon and Billericay constituency, and elements of what the Secretary of State has announced today will certainly be very welcome. On the flip side, local businesses that rely on the Ford HQ—and, in fact, the entire automotive sector—saw a £200 million-a-year increase in national insurance kick in yesterday. Today, small businesses in my constituency, many of which work in London, face charges on the Blackwall tunnel for the first time ever and charges on the Silvertown tunnel, which means that many will face charges of £35 a day, just to operate in London. Will the Secretary of State raise those issues with her colleague the Mayor of London and the Chancellor of the Exchequer? Could she also tell us how long the plug-in van grant will be extended? We know it will be there in 2026, but for how much longer?
Heidi Alexander
I was struggling to decipher a question in the speech that was forthcoming from the other side of the Chamber. The right hon. Gentleman asks me to comment on the opening of the Silvertown tunnel in east London. I suspect that a number of his constituents—regardless of whether they are driving for work or to try to reach friends and family—have been stuck in absolutely atrocious traffic north and south of the Blackwall tunnel. For the first time ever, London’s double-deck red buses will now be able to cross the Thames east of Tower Bridge. I hope that he might join me in congratulating both the Mayor of London and Transport for London on getting a new river crossing open, which is much needed.
Preet Kaur Gill (Birmingham Edgbaston) (Lab/Co-op)
The news over the weekend that Jaguar Land Rover was pausing shipments to the United States was worrying for many of my constituents. JLR employs 9,000 people at its factory in nearby Solihull, and supports thousands of jobs in the wider supply chain. After the flip-flopping of previous Governments, this Government have acted decisively to give British car makers certainty and support in the transition to electric vehicles. Can the Minister confirm whether she is planning to build flexibilities into the mandate targets?
Heidi Alexander
That is precisely what we have done. I reassure my hon. Friend that I have been in touch directly with Jaguar Land Rover over the last couple of days, and I am pleased that we have been able to provide the company and other car manufacturers with certainty at this very difficult time. We have been able to do that this week, and I hope it will provide some comfort to her constituents who are employed at that local facility.
Sir Julian Lewis (New Forest East) (Con)
As someone who has never bought a new motor vehicle, apart from a motorcycle, may I probe the Secretary of State further on what she said about the second-hand EV market? For families that will never be able to afford a new vehicle, does she anticipate a time when the second-hand EV market will be comparable in price to the second-hand market for conventional vehicles?
Heidi Alexander
I thank the right hon. Gentleman for that question. He is right to mention the second-hand market: 80% of car purchases in any given year are in the second-hand market. I am told that, at the moment, some of the most popular products on AutoTrader are second-hand EVs. They are selling very well, and he is completely right that these vehicles need to be affordable to everyone and an option for everyone, so I am made hopeful by the green shoots we are seeing in the second-hand market at the moment.
Several hon. Members rose—
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank the Secretary of State for her statement and the leadership she is showing in delivering our manifesto commitments in partnership with industry. The contrast is clear with the Opposition, who are bringing along uncosted ideas for grants, subsidies and tax cuts. I welcome the reaffirmation of the plan to roll out EV charging, but is she sure that that will be able to meet EV demand, and are there any plans for a battery health check to help reassure people buying used vehicles in the second-hand market?
Heidi Alexander
I thank my hon. Friend for that question. We are working with the United Nations Economic Commission for Europe on the battery health check issue that he raises. I assure him that we are working closely with the private sector on the roll-out of charge point infrastructure. As I said in my statement, a new EV charger is currently installed every 29 minutes, or at a rate of 50 a day. Only a couple of weeks ago, I visited the new InstaVolt charging super-hub in Winchester, which, when one sees it, really is a glimpse into the future. It is imperative that the Government continue to work with the private sector to make sure that the charging infrastructure is there for everyone in the places where they need it when they need it.
Alison Bennett (Mid Sussex) (LD)
UK businesses in the automotive supply chain, both across the country and in my constituency, need more support. Indeed, the Society of Motor Manufacturers and Traders agrees that a package of measures is needed for the supply chain. What consideration has the Secretary of State given to supporting the needs of the supply chain specifically? Given that she is not inclined to be tempted by my hon. Friend the Member for Wimbledon (Mr Kohler) imploring her that we should join an EU-UK customs union, what assessment has the Department made of the cost of not doing so?
Heidi Alexander
The hon. Member will be aware that the Cabinet Office leads on the EU reset negotiations, so she might most appropriately put that question to my colleagues in the Cabinet Office. On her wider question about support for the EV supply chain, we have announced the automotive transformation fund to a value of £2 billion, part of which is specifically for supporting the EV supply chain.
Luke Akehurst (North Durham) (Lab)
Many of my North Durham constituents proudly work at Nissan in the constituency of my neighbour my hon. Friend the Member for Washington and Gateshead South (Mrs Hodgson). Nissan Sunderland’s 6,000 staff make excellent cars, including hybrid and electric vehicles. My right hon. Friend deserves credit for putting together at pace a package that has been welcomed by industry, but she is right to suggest that this is only one piece of the puzzle. What more will she and Ministers be doing to support the sector in the coming months?
Heidi Alexander
We will continue to roll out the electric charging infrastructure, which is really important to give consumers confidence. The time to switch to EVs is now. We will continue to have the plug-in vehicle grants for individuals who are thinking about purchasing a new van. We will also continue to keep under review what else can be done to stimulate demand and make sure we maintain the momentum that we are seeing in the market in the first few months of this year.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
I welcome what I think the Secretary of State has announced about smaller luxury vehicle manufacturers such as Aston Martin, which is based in my constituency. I say “I think” because her statement says that
“small…manufacturers will be exempt from these new measures.”
I would be grateful if she clarified whether that refers to the existing mandate of measures, because she knows that that is what the smaller manufacturers in question have been lobbying to be exempted from, rather than the loosening she has announced today. If she can confirm that, and she is relying on an argument that we can treat smaller luxury manufacturers differently from everyone else, would she commend that argument to her colleague the Trade Secretary in the discussions on tariffs with the United States?
Heidi Alexander
I can confirm to the right hon. and learned Gentleman that smaller and micro manufacturers are exempt from the ZEV mandate, but they will need to comply with the 2035 complete phase-out date, as per all other manufacturers.
Mr Toby Perkins (Chesterfield) (Lab)
I hope the rest of the shadow Secretary of State’s birthday is rather better than the last half hour; I do not think his contribution today will age very well at all. The measures the Government are proposing are a sensible compromise. The industry did need certainty. There were real concerns about that, as my hon. Friend the Member for Derby North (Catherine Atkinson) and other Derbyshire MPs heard on a recent visit to Toyota, so the measures absolutely strike the right balance. What can the Secretary of State say to my constituents who live in either council flats or terraced properties, which makes home charging more difficult, about what more we can do to ensure they are not faced with a huge price disparity in comparison to those who are able to have charging infrastructure at home?
Heidi Alexander
We issued guidance to local authorities before Christmas on cross-pavement solutions, and we are offering a grant of up to £350 for households with on-street parking. I hope those two things together will offer some comfort to my hon. Friend’s constituents who are in the situations he describes.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
I thank the Secretary of State for her statement. Pace is needed, understandably, but I do have some concerns in that due process needs to be followed with the devolved Administrations. Can she assure the House that sufficient time is being allowed for the devolved Administrations, including the Scottish Government, to be fully involved and engaged in a consultation on policy development, and the Scottish Parliament for any legislative changes that may be required? Secondly, what assessment has been made of the potential for those changes to impact negatively on carbon emissions in the UK and Scotland, and our respective Governments’ ability to meet statutory climate change targets? Will she publish any such assessments?
Heidi Alexander
I would like to put on record my thanks to the Scottish Government for their assistance in working at pace over the past couple of days. I committed to the hon. Gentleman’s colleagues in the Scottish Government to work closely with them and that is exactly what I have done. With regard to carbon assessments, we have conducted a carbon assessment. I can assure him that today’s proposed changes make a negligible change to the carbon emissions that were predicted to be saved as a result of the ZEV mandate.
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
I welcome the Secretary of State’s statement, given the uncertainty and turmoil caused by US tariffs on British-made vehicles. Will she outline how she is responding to major employers such as Jaguar Land Rover, to ensure they can remain competitive and safeguard jobs in our local communities, as shared by Members from across the House?
Heidi Alexander
As I may have said to other colleagues, JLR will stand to benefit from the flexibilities we have announced today: the increased borrowing flexibility; the extension and the expansion of the carbon dioxide transfer cap; and the changes we talked about on the way we measure CO2 emissions from plug-in hybrids, which will make it easier for them to use the CO2 transfer flexibility. I think all those things we have announced today will be welcomed by JLR and, hopefully, by her constituents employed at the factory.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
If the Government’s top priority really is growth, a policy that sets artificial targets to ban products that people want to buy, which are not subsidised, to force them to buy cheap Chinese products that they do not really want, which are subsidised, does not sound like a policy for growth. Incidentally, they also suffer from very high insurance costs and high depreciation costs, and may lead to the closing down of capacity to produce in the United Kingdom the products that people do want to buy. The Secretary of State may have priorities, but growth is not one of them.
Heidi Alexander
I suggest that the hon. Gentleman speak to his constituents, who are buying EVs in numbers. There has been a 40% increase—
Heidi Alexander
The hon. Gentleman is telling me that he has one, which is fantastic—he is clearly leading the way. This is a massive industrial opportunity for this country and we need to give certainty and confidence to both businesses and consumers, which is precisely what this Government are doing. If the hon. Gentleman wishes to become the poster boy for the EV industry, I would be very happy to have a conversation with him about that.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Colleagues and the Secretary of State must be much swifter—we have another statement and two further debates. Anneliese Dodds, show us how it is done.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Workers at BMW Cowley have made clear to me their determination to play their part in a jobs-rich transition to net zero. Can my right hon. Friend explain how these changes will benefit BMW Cowley specifically, given its significance for my constituency and for UK manufacturing as a whole?
Heidi Alexander
We are confirming today that we will maintain the existing CO2 scores for plug-in hybrids instead of using the revised scores that are now being used in the EU. That will be of particular benefit to BMW and the Mini Cowley plant.
Mr Will Forster (Woking) (LD)
The car industry will be hardest hit by Trump’s tariffs, as my constituency knows better than most; our single largest employer, McLaren, sells 42% of its product to the US. Will the Minister consider retaliatory tariffs, particularly against Tesla, to protect British jobs and show that tariffs have consequences?
Heidi Alexander
McLaren will, of course, benefit from the exemption we have announced today for small and micro manufacturers. We are considering our position regarding the imposition of tariffs, and the Business Secretary is consulting industry on future steps. I would say, however, that an escalating trade war is not in anyone’s best interests.
Chris Vince (Harlow) (Lab/Co-op)
I thank the Secretary of State for her statement. Harlow is a new town, and it has a number of properties that do not have off-street parking. I ask her to drill down on the guidance she has given to local councillors on what they can do to provide more off-street charging facilities.
Heidi Alexander
My hon. Friend is totally right. This is a critical issue. The guidance that we published before Christmas is vital, as is the grant we are giving to households.
Nick Timothy (West Suffolk) (Con)
It is not just the absurdity of fining firms for making the wrong cars, and insisting that is good for growth; it is that the national grid and local distribution networks do not have the capacity to cope with growing demand now, let alone if and when cars and central heating are electrified, as the Government promise, and all those data centres are built. Can the Secretary of State confirm that the connections queue stands at 756 GW and that only 0.54 GW was delivered in the past month, while the queue grew by 21.8 GW?
Heidi Alexander
I can assure the hon. Gentleman that I am in regular contact with the Energy Secretary to ensure that we have the grid connections and capability for the EV charging infrastructure that we need.
Sarah Coombes (West Bromwich) (Lab)
Jaguar Land Rover and its wider supply chain employ huge numbers of people in my constituency, so I am very glad to see the Prime Minister and the Transport Secretary backing our automotive industry so strongly today. This commitment makes clear our strong climate commitments, but also our support for the transition in the industry. Will the Secretary of State say more about how we will support demand-side change to get EV charge points across towns such as Oldbury and West Brom in my constituency?
Heidi Alexander
Of course, the Prime Minister is at JLR in the midlands today. We are spending £200 million of public money to support the roll-out of EV infrastructure, which sits alongside £6 billion of private investment to ensure that charge points are where people need them, when they need them.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for her statement and answers. Over time, UK Governments have committed hundreds of millions of pounds to perfecting electric vehicle charging infrastructure in England, but back home in Northern Ireland, the ratio of charging points to electric vehicles is not sufficient. It is nowhere near the level on the mainland, and we are a much more rural community. Will the Minister ensure that through the Barnett consequentials, additional attention is paid to giving the devolved institutions the funding necessary to make sure that electric vehicle charging infrastructure can meet the demand of the electric vehicles on the road?
Heidi Alexander
The hon. Gentleman raises a fair point about the availability of charge point infrastructure in all places in the UK. It is a matter I look forward to discussing with my counterparts in Northern Ireland when I next have the opportunity to meet them.
Matt Western (Warwick and Leamington) (Lab)
I thank the Secretary of State on behalf of my constituents, many of whom work for Jaguar Land Rover and Aston Martin. This update is very welcome news, especially the changes for small and micro manufacturers and for hybrid, too, particularly in the light of Washington’s tariffs last week. Electrification and hydrogen are the future. I look at China with its market of 12 million electric cars—38% to 50% of its vehicles are now electric. Can I urge the Government to look once again at support for manufacturers, which are subsidised in the sale of electric vehicles?
Heidi Alexander
The automotive transformation fund that I mentioned earlier is a sizeable investment that the Government committed to at the last Budget. I look forward to hearing my hon. Friend’s ideas about how it might best be utilised.
Ben Obese-Jecty (Huntingdon) (Con)
One of the major issues holding back wider EV ownership is the complete lack of EV charging infrastructure in towns such as Huntingdon and St Ives in my constituency. What assessment have the Government made of the grid capacity required to facilitate a significant uplift in EV charging infrastructure, and how much will the upgrade cost? At what point will current grid capacity be unable to provide adequate charging? Separately, what is the plan for a significant increase in EV battery disposal and to address the prohibitive cost of new batteries for older electric vehicles?
Heidi Alexander
Those are matters that the Department constantly reviews. Regarding grid capacity, I refer the hon. Gentleman to my earlier answer to the hon. Member for West Suffolk (Nick Timothy).
Sally Jameson (Doncaster Central) (Lab/Co-op)
To make sure the transition is a success, can the Secretary of State confirm that the Government’s wider industrial strategy will back British auto manufacturers and British supply chains further and ensure that this is a place-based growth agenda for all our communities?
Heidi Alexander
I can confirm that for my hon. Friend, and we will be publishing the industrial strategy soon. This is about creating the jobs of the future in high-skilled industries and the right conditions for growth, and that is completely what the Government are committed to doing.
Richard Tice (Boston and Skegness) (Reform)
The Transport Secretary omitted to mention that UK car production last year was at its lowest level for 70 years, aside from the pandemic; that UK car production this year is down a further 11%; and that total registrations of electric and hybrid cars this year are down another 2%. Will the Minister agree that the best thing to do to ensure growth and increase production is to scrap all these ridiculous zero emission targets forthwith?
Heidi Alexander
No, I do not agree with the hon. Gentleman. The number of new cars sold in the UK last year was 1.9 million, and the market grew by 2.6% on 2023. The number of new EVs sold last year was 382,000, which was nearly 20% of the market and represents a 21% growth on 2023.
Tom Hayes (Bournemouth East) (Lab)
I commend the Secretary of State for standing up for cheaper and cleaner British cars in the face of the global chaos being forced on our economy—particularly in the light of the Conservatives’ botched Brexit deal, which wrecked Britain’s car industry and lost this country a decade of golden British manufacturing. My constituents in Bournemouth East are crying out for charging infrastructure. The Secretary of State said that nobody would be left behind. Can she outline how she will invest in charging infrastructure to make sure that everybody who wants to can be part of the electric vehicle revolution?
Heidi Alexander
This is a partnership between public investment and the private sector. I assure my hon. Friend that we will be paying attention to Bournemouth, as we will to all other parts of the country.
Vikki Slade (Mid Dorset and North Poole) (LD)
I rise to speak as a very satisfied second-hand EV driver. I visited Ohme’s head office last month to learn about how home charging of EVs can revolutionise the energy market and help EVs become a way of managing our grid, as well as a way to drive. What consideration has the Secretary of State given to accelerating work on flexible generation of storage to help to drive demand for businesses and homes and to make Britain the starting place of this revolution?
Heidi Alexander
Officials in my Department are looking at this issue very closely. I would be interested in learning more from the hon. Member about the visit she made to the business in her constituency.
Ben Goldsborough (South Norfolk) (Lab)
South Norfolk is proudly home to Lotus Cars. This morning, I had a conversation with the management team, who welcomed the announcement. In our long-term plan for the car manufacturing industry, what action will the Government be taking for UK-based original equipment manufacturers to ensure that we have a good plan for the EV transition so that we are competitive in future markets?
Heidi Alexander
Everything that the Government are doing, and everything in the announcement, is about ensuring that our British businesses are competitive. I am pleased to hear that Lotus is pleased with what we have announced. I understand that other British brands such as McLaren, Bentley and Caterham are also pleased with the announcement, which is all about the Government’s commitment to driving growth and opportunity.
Siân Berry (Brighton Pavilion) (Green)
I am concerned about public health. We all know that diesel and petrol hybrids are not zero emission, we know that the 2035 extension is not about tariffs—it applies only to UK sales—and we know that the move was already on the cards since Labour ripped clean air out of its manifesto completely. Has the Secretary of State assessed the impact of the announcement on the achievement of clean air target commitments? Is this the last we will hear of any clean air Act from this Government?
Heidi Alexander
I assure the hon. Lady that an analysis of environmental impacts has been done, and that relates to both carbon emissions and air pollution.
Terry Jermy (South West Norfolk) (Lab)
The Secretary of State is correct to say that demand for electric vehicles is strong, but in my rural Norfolk constituency the lack of charging infrastructure over the last 14 years has left many not wanting to make that switch. Will she confirm that rural areas such as Norfolk will be prioritised for such charging infrastructure in the future?
Heidi Alexander
We increased the installation of EV charging infrastructure in rural areas by 45% in the last year. I hope that my hon. Friend and his constituents will start to see the fruits of that soon.
Wera Hobhouse (Bath) (LD)
Autonomous vehicles are the next step into the future. What discussions has the Secretary of State had with UK manufacturers to ensure that they can take full advantage of the next revolution in how we use cars?
Heidi Alexander
We regularly talk to manufacturers and other organisations that are interested in the move to connected and autonomous vehicles, and we are open to exploring how that might work in the UK. We need to do it in a safe way, but I am interested in how we might expedite trials in the UK. That is a subject that we are working on at the moment.
Peter Swallow (Bracknell) (Lab)
I do not know which businesses the shadow Secretary of State or indeed the hon. Member for Boston and Skegness (Richard Tice) have been listening to, but I have spoken to businesses including Honda, whose European headquarters are just outside my constituency, and they have said that they are committed to decarbonisation but had concerns about the inflexibility of the scheme that we inherited from the Conservative party. Does the Secretary of State agree that the statement shows that Labour is the party on the side of the British car industry, and of the industry across the world?
Heidi Alexander
My hon. Friend is entirely right. We are backing British business and supporting our domestic car manufacturing industry. I am pleased to hear that the companies based in his constituency will be welcoming the announcement.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Previous Labour and Conservative Governments did little when Welsh livelihoods were swept away by global market forces at places such as the Ford plant in Bridgend and the steelworks in Port Talbot. Wales’s car sector is facing 25% tariffs thanks to President Trump. That threatens an industry that employs 30,000 people. The Welsh Automotive Forum has said that the Government’s commitments are not enough; it is calling for direct support. Recycled fines are hardly direct support. Are the Government prepared to step up and provide that?
Heidi Alexander
We have a £2 billion automotive transformation fund, and we are investing hundreds of millions of pounds in other forms of support. I work closely with the Welsh Government on these issues. We will leave no stone unturned in our attempts to protect the car manufacturing industry and preserve high-skilled jobs in communities in Wales and across the rest of the country.
Mark Sewards (Leeds South West and Morley) (Lab)
My constituency needs charging infrastructure, so I am grateful for the Secretary of State’s statement and her answers to colleagues across the House. In Leeds South West and Morley, many residents live in terraced houses without driveways. Some of them have contacted me asking what they need to do to get the charging infrastructure required for an electric vehicle. I promised one such resident that I would raise that with the Secretary of State. What update can she give on our commitment to charging infrastructure across the UK?
Heidi Alexander
I congratulate my hon. Friend on fulfilling his promise to his constituent. We are working closely with local authorities through the local electric vehicle infrastructure—LEVI—scheme to roll out charging infrastructure, and we have issued the guidance that I mentioned earlier to local authorities on improving cross-pavement charging solutions. There are also grants available for householders who do not have a driveway but who wish to install a charge point.
Madam Deputy Speaker (Ms Nusrat Ghani)
Saving the best till last, I call Sammy Wilson.
Sammy Wilson (East Antrim) (DUP)
The statement today is further evidence of the economically damaging and market-distorting impact of the unrealistic net zero policies. The only reason that the Minister is having to impose fines on producers is that demand does not meet the targets that she has set for the production of electric vehicles. Does she not accept that the response from producers will be either to cut back production, reducing jobs, or to reduce the price of EVs, reducing profits and investment in the UK? Are car workers going to be the next group of workers to be sacrificed on the altar of net zero?
Heidi Alexander
It is right that we retain the threat of fines, but I gently point out to the right hon. Gentleman that we do not believe that any manufacturers will have to pay fines in the first year of the operation of the ZEV mandate. The trading window for credits is yet to close—it will close later this year—but our initial analysis suggests that no manufacturers will have to pay fines this year.