Green grass of home
Prime Minister scraps the 2030 ban on petrol and diesel vehicle sales
The Prime Minister, Rishi Sunak, has decided to delay the plan to ban the sale of new diesel and petrol vehicles by 2030.
It comes alongside other exemptions and delays to several key green policies.
All this comes as the Conservatives trail Labour in the polls under a year ahead of the next general election.
Following the Uxbridge by-election in the summer, the government leadership believes it has found a key weakness in Labour’s policies. The ULEZ expansion in London introduced by the Mayor of London, Sadiq Khan, was regarded as the main reason Labour failed to gain the seat from the Conservatives. It was believed to show that public opinion was railing against the costs and imposition of environmental measures on a cash-strapped population.
Sunak said the government could not impose “unacceptable costs” linked to reducing emissions on British families.
However, the announcement has prompted fierce criticism from the opposition and some industry bosses. Mr Sunak also faced attacks from his own party, though a number of Conservative MPs came out in favour of the new direction. Even some in the car industry supported the delay.
Positive way forward
Framing the changes as “pragmatic and proportionate”, the prime minister has unpicked several of Boris Johnson’s key policies. Many of these were launched when Mr Sunak was serving as chancellor. In a speech from Downing Street on Wednesday, Mr Sunak said moving too fast on green policies “risks losing the consent of the British people”.
Key changes announced include:
- A five-year delay in the ban on the sale of new petrol and diesel cars, meaning a requirement for all new cars to be “zero emission” will not come into force until 2035
- A nine-year delay in the ban on new fossil fuel heating for off-gas-grid homes to 2035
- Raising the Boiler Upgrade Grant by 50% to £7,500 to help households who want to replace their gas boilers
- The ban on the sale of new gas boilers in 2035 remains, but the government will introduce new exemption for poorer households
- Scrapping the requirement on landlords to ensure all rental properties had a Energy Performance Certificate (EPC) of grade C or higher, from 2025.
Hitting the brakes
Responding to the statement, Labour were unequivocal. They are committed to keeping the 2030 ban on the sale of new petrol and diesel cars and will reverse this decision if elected.
Shadow environment secretary Steve Reed believes the UK will miss its target to hit net zero by 2050 with these changes. He said the prime minster had “sold out the biggest economic opportunity of the 21st Century” for Britain “to lead the world in transition to well-paid secured new jobs of the green economy”.
Scottish First Minister Humza Yousaf told the BBC the move was “utterly unforgiveable” and “very firmly takes the UK out of the global consensus”.
Investing in the future
Billions of pounds have already been invested across multiple industries in preparation of the previous deadlines.
Korean carmaker Kia, which has plans to launch nine new electric vehicles over the next few years, It says the announcement was disappointing as it “alters complex supply chain negotiations and product planning, whilst potentially contributing to consumer and industry confusion”.
The chief executive of energy company E.On, Chris Norbury, said it was a “misstep on many levels”. He added that it was a “false argument” to suggest green policies can only come at a cost.
Meanwhile, Jaguar Land Rover and Toyota welcomed the change, calling it “pragmatic” and adding that it brings the UK in line with other nations.
Part of the home grown British motor manufacturing is the eye on new EU tariff charges that are likely to hit us next year.
At present, post-Brexit rules require 40% of an electric car’s parts to be sourced in the UK or EU. This is referred to as the ‘rule of origin’, and failure to meet this requirement attracts a 10% trade tariff on every sale.
This requirement is expected to rise to 45% next year and again to 55% in 2027, putting further pressure on the British automotive industry’s transition to clean mobility.
The production of electric vehicles is still massively underdeveloped. In particular, the materials required to make the batteries – and the factories themselves – are mostly located outside of the UK. This brings a heavy reliance on Asian countries to fulfil this demand at present, particularly China.
British car manufacturers were facing the 10% tariff unless more EV batteries are produced in the UK or the EU rethinks its tariff rules. This would make mass volume British made cars uncompetitive. The Uk only announced a new battery giga factory in the summer, and this will take some time to come on-line and producing.
With the 2030 deadline looming, British car manufacturers have been pushing for the UK government to renegotiate with the EU. However, this has not really happened despite Stellantis, who own the Vauxhall, Peugeot and Citroen brands, joinied by Jaguar Land Rover and Ford, calling for immediate action.
However, many in the industry see yesterdays announcement as a backward step. After huge investment and certainty, mu ch has already been achieved. The latest move could see progress slow.
Ian Plummer, Commercial Director of Auto Trader, described it as leaving “the industry and drivers high and dry by sacrificing the 2030 target on the altar of political advantage.
Instead we should be looking to bring down “major barriers to adoption” of EVs. “We should be positively addressing concerns over affordability and charging rather than planting seeds of doubt” Plummer continues. He adds that “this announcement has only served to remove trust and confidence in the UK market.”
Mike Hawes, SMMT Chief Executive, said the “automotive industry has and continues to invest billions in new electric vehicles”. While acknowledging the Government has had a significant role in this investment by setting the 2030 deadline, this change will undermine further investment in our industry. It will also slow the development of infrastructure and buying incentives for the public and fleet buyers. Hawes says “consumers must want to make the switch, which requires from Government a clear, consistent message, attractive incentives and charging infrastructure that gives confidence rather than anxiety. Confusion and uncertainty will only hold them back.”
Liberal Democrat leader Sir Ed Davey accused Mr Sunak of being “selfish” and said the changes “epitomise his weakness”.
“The prime minister’s legacy will be the hobbling of our country’s future economy as he ran scared from the right wing of his own party,” he said.
Speaking to the BBC from the UN’s Climate Action Summit, Sir Alok Sharma, a former Conservative minister who chaired the COP26 climate summit, said the response from international colleagues at the event had been one of “consternation”.
“My concern is whether people now look to us and say, ‘Well, if the UK is starting to row back on some of these policies, maybe we should do the same’,” he said.
Also speaking from the summit, former US vice president and climate campaigner Al Gore said the announcement marked a “turn back in the wrong direction”.
He added that “the UK has been one of the impressive leaders on climate”, but this is “a particular disappointment,” he told the BBC.
Chris Stark, chief executive of the UK’s independent Climate Change Committee, said the changes would make it harder for the government to meet legally binding climate goals.