Ministers will throw a lifeline to tariff-hit carmakers next week by easing rules on the transition to electric vehicles.
The controversial ‘zero-emission vehicles mandate’, which levies heavy fines on carmakers who fail to sell enough electric vehicles, will be watered down to help manufacturers reeling from the imposition of 25 per cent tariffs on exports to the US.
Although the 2030 deadline for shifting to electric vehicles will stay in place, ministers are expected to soften fines and are considering easing the interim targets along the way.
The move is part of a package designed to show that the Government is accelerating pro-growth measures in response to warnings that Donald Trump’s tariff war could trigger a recession.
Sir Keir Starmer is planning a major speech on the economy on Monday aimed at reassuring business, investors and the public that the Government is still ‘going for growth’.
The Prime Minister will pledge to move faster on tackling red tape, including ordering a review of more than 300 quangos.
He is also expected to unveil further streamlining of the planning system and sign off at least one major infrastructure project that has been stuck in the pipeline.
Downing Street yesterday said the turmoil in world markets following Mr Trump’s ‘Liberation Day’ announcement on tariffs underlined the need to go ‘further and faster to strengthen our own economy’.
Sir Keir Starmer is planning a major speech on the economy on Monday aimed at reassuring business, investors and the public that the Government is still ‘going for growth’
Ministersare set to ease rules on the transition to electric vehicles to help manufacturers reeling from the imposition of 25 per cent tariffs on exports to the US
The moves also reflect anxiety in government about the impact of a triple whammy of cost hikes on business this week.
On Tuesday, the Government raised the minimum wage by an inflation-busting 6.7 per cent, giving a full-time worker a pay boost of £1,400.
Today, President Trump’s blanket tariff of 10 per cent on all UK exports to the US is due to come into effect, following the 25 per cent levies already in force for cars and steel.
Tomorrow, Rachel Reeves’s £25billion hike in National Insurance will hit every employer in the country with higher costs.
The Federation of Small Businesses yesterday warned that firms were drowning under a ‘rising tide of costs and taxes’. About 85 per cent of small businesses reported rising costs in the first three months of this year, according to a survey from the Federation of Small Businesses (FSB), which said the figure was ‘a clear sign of mounting financial pressure’.
FSB policy chairman Tina McKenzie said there was ‘no way to sugarcoat the impact rising costs and higher taxes are having on small firms’.
She warned that the Government’s Employment Rights Bill was also ‘holding up job creation at a time it’s needed the most’ despite not yet having come into law.
Iceland executive chairman Richard Walker – who was a cheerleader for Labour during the election campaign – warned that ‘business is the engine of growth for the UK economy, not a piggy bank to be constantly raided.’
President Trump’s blanket tariff of 10 per cent on all UK exports to the US is due to come into effect, following the 25 per cent levies already in force for cars and steel
Economists have stepped up warnings that the UK could be heading for recession in the wake of Mr Trump’s announcement, while last night, Deutsche Bank said the Trump tariffs could cost 100,000 British jobs.
Greater Manchester mayor Andy Burnham yesterday urged Rachel Reeves to relax her fiscal rules, after warnings that the trade war could force her to raise taxes or cut spending in the autumn Budget.
But Treasury minister James Murray said there would be no softening of the rules, which require the Government to get debt falling within five years and to borrow money only for capital spending. ‘The fiscal rules are non-negotiable,’ he said.