Prime Minister Sir Keir Starmer has pledged to champion “British brilliance” as he unveils a sweeping package of reforms aimed at shielding the UK’s automotive sector from the impact of new US trade tariffs. In a speech on Monday, the Prime Minister will formally reinstate the 2030 ban on the sale of new petrol and diesel vehicles, signalling a bold move towards cleaner transport and a greener economy.
The announcement comes in the wake of punitive tariffs imposed by the US, with a 25% duty now placed on imported foreign vehicles. The White House’s decision has already prompted major British manufacturer Jaguar Land Rover to pause exports to the US, as the firm evaluates the implications of the new trading landscape.
Sir Keir said the world had entered a “new economic era” and that Britain must respond with urgency. “Global trade is being transformed,” he said. “That means action, not words. Our Government will step up with bold changes to support our car industry, to ensure that British cars, built by British workers, can continue to be sold around the world.”
A new deal for the car industry
Under the new measures, the Government will reimpose the 2030 ban on the sale of new petrol and diesel cars, a commitment originally made under the Conservatives but delayed to 2035 by Rishi Sunak’s administration. The rules around electric and hybrid vehicles will be tweaked to support manufacturers, with plug-in hybrids and new hybrid cars allowed to remain on the market until 2035.
Luxury brands such as Aston Martin and McLaren — which produce a limited number of vehicles each year — will continue to manufacture petrol cars beyond the 2030 cut-off, offering flexibility for niche producers.
Petrol and diesel vans, along with all hybrid variants, will also be permitted until 2035.
To ease the burden on carmakers during this transition, ministers will also relax penalties for companies that fall short of electric vehicle (EV) sales targets. The levies for missing Government mandates will be reduced, with further reviews planned as the economic consequences of the US tariffs unfold.
Economic resilience in a new global landscape
Writing in The Sunday Telegraph, the Prime Minister said: “The world as we know it has gone. These new times demand a new mentality. This Government is ready to use industrial policy to protect British businesses from the fallout of global economic change.”
The decision to accelerate the UK’s industrial strategy — expected later this summer — may now be brought forward in light of the developments across the Atlantic. British officials have been engaged in diplomatic talks throughout the weekend, with Sir Keir holding discussions with foreign leaders including President Macron, Chancellor Scholz, and Ursula von der Leyen, expressing dismay over President Trump’s unilateral tariff hikes.
Political reaction and industry response
The Government’s announcement has received a mixed reaction across the political spectrum. Transport Secretary Heidi Alexander said: “Our ambitious package of strengthening reforms will protect and create jobs, making the UK a global automotive leader in the switch to EVs, all the while meeting our core manifesto commitment.”
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However, the Conservatives accused Labour of lacking urgency. Shadow business secretary Andrew Griffith said: “Labour’s industrial strategy is stuck on the grid while the Business Secretary and Chancellor pile on red tape and higher taxes.”
Meanwhile, the Liberal Democrats welcomed the move in principle but said it lacked depth. Transport spokesperson Paul Kohler urged ministers to “introduce VAT cuts on public charging and delay the upcoming tax hikes on EVs” to make the transition more viable for consumers.
The Society of Motor Manufacturers and Traders (SMMT) echoed calls for stronger action. Chief executive Mike Hawes warned: “Given the potentially severe headwinds from US tariffs, greater action will almost certainly be needed to safeguard competitiveness. Automotive must be a top priority in both our industrial and trade strategies.”
As Britain navigates this new economic terrain, the Prime Minister’s rallying cry to support “British brilliance” is a clear signal that the Government is prepared to act decisively — though the road ahead for the automotive sector remains anything but smooth.
