Financial Assistance to Industry

Richard Holden Excerpts

Monday 14th July 2025 General Committees

[Greg Smith (Mid Buckinghamshire) (Con)]

It is a pleasure to serve under your chairmanship, Sir Desmond. I begin by drawing the Committee’s attention to my entry in the Register of Members’ Financial Interests. I have spoken at length on this subject, in the last Parliament as a member of the Transport Committee and from the then Government Back Benches, and since the last general election as a shadow Minister.

I begin with a simple concept: politicians should never ask someone to do something they are not willing to do themselves. I will put on the record that I am not willing to buy an electric car, and therefore anything that essentially uses taxpayers’ money to produce electric vehicles that so few people in the United Kingdom actually wish to buy—including, it seems from the weekend’s media, the Transport Secretary—is something that we cannot support.

With fleet sales removed, new EV registrations prove that this is just not a technology that people trust, desire or are willing to spend their hard-earned money on. The Conservatives previously pushed the zero-emission vehicle mandate transition date back to 2035, but this Government have brought it forward to 2030. The need for this subsidy––let us call it what it is––is a clear indication that the Government are struggling to persuade consumers to switch to electric vehicles.

That failure stems from two fundamental issues: the high cost of electric cars and their lack of reliability in terms of both range and charging infrastructure. The Government will say, I am sure, that we formerly had a subsidy scheme—and that is true: we did, but it was used to create an EV industry in Britain, supporting it to overcome the barriers of entry into the UK market. When that EV industry was created, we ended the subsidy. But now, to cover their mistakes and the unrealistic nature of their targets, Ministers have been forced into using taxpayers’ money to pay for EV adoption and to mask the consequences of their own policy failures. In effect, taxpayers’ money is being used to subsidise a transition that the public are not willing to make.

We warned the Government that that would be the outcome. However, driven by an ideological approach to net zero, they ignored those warnings. This is yet another example of how the Government’s unrealistic climate targets are contributing to the rising cost of living for ordinary British families. Many other countries have opted for a 2035 target, recognising the economic and logistical challenges of any earlier deadline. In contrast, the UK’s 2030 mandate risks placing an undue financial burden on families here, forcing them to purchase more expensive vehicles while others abroad can wait and benefit from falling prices.

We on the Opposition side believe in a demand-led transition to cleaner vehicles, one that respects consumer choice and understands the whole range of technologies available, following a genuine whole-system analysis—not just the tailpipe. Families should have the freedom to choose whether they want to drive petrol, diesel, hybrid, electric or other new technologies, and to make that transition when the market and infrastructure are ready, and when prices are more affordable.

The Government’s approach has already had real-world consequences. We have seen the closure of Stellantis in Luton, in part due to insufficient demand for electric vehicles. That should serve as a warning.

[Mr Richard Holden (Basildon and Billericay) (Con)]

I should declare that Ford’s UK headquarters is in my constituency. Will my hon. Friend also reflect that there is a real issue here for not just cars, but commercial vehicles? I am thinking particularly of the Transit, Ford’s best-selling international medium-sized van, which is known the world over and is a real staple of the UK. Is it not the case that we need to look at this issue in the round and that, when it is down to tradesmen what they want to buy, they need to be confident and comfortable in purchasing the product? At the moment, that is the only element providing significant profitability for Ford in the UK; removing that and essentially replacing it with a subsidy seems the wrong way around.

[Greg Smith]

My right hon. Friend is absolutely right. If we look at the marketplace out there for both private and commercial vehicles—particularly vans, heavy goods vehicles and larger vehicles—those who have to take a personal financial risk on them are not choosing to do so. Particularly in the HGV sector, they prefer to look at transitional fuels such as hydrotreated vegetable oil to keep their fleets on the road. That choice genuinely cleaner, but does not cost them two, three or maybe even four times the price for the same vehicle in an electric format—which, of course, comes with a lower payload, because the batteries are so heavy that it cannot legally take the same weight of goods.

Those choices that real people in the real world are making should drive what the Government do to ensure that they get the transition to a greener form of transport right, rather than just flogging the dead horse of a failing technology that nobody seems willing to buy unless heavily bribed to do so with their own taxpayers’ money through fleet sales and the like—and, in this case, through this motion that seeks to spend even more of that taxpayers’ money on propping up a product that just does not have the consumer demand underneath it. It is for those reasons that the Conservatives will oppose this motion.