Labour expected to cut EV targets for UK’s car industry despite MPs’ protests

Exclusive: Louise Haigh likely to weaken mandate for sales that forms key part of emission reduction plan

Analysis: Climate always comes second – are green issues slipping down Burnham’s agenda?

Ministers are expected to make steep cuts to the government’s electric vehicle (EV) targets this week, in a move that will relieve carmakers but alarm many Labour MPs who are worried about the government’s commitment to the green agenda.

Louise Haigh, the de facto deputy prime minister, will finalise the plan after a crunch meeting in Downing Street on Wednesday to settle a long-running dispute between the transport, energy and business departments.

Haigh is expected to agree to cut a target for EV sales by about a quarter, government sources say, helping British industry but setting up a potential fight with MPs and campaigners over the government’s single biggest decarbonisation policy.

The decision will be made just as Andy Burnham prepares to travel to his first Cop summit as prime minister, where he and the foreign secretary, Ed Miliband, will champion electrification on a global scale.

With some MPs already upset by the decisions to approve the Jackdaw gasfield and to cut funding for green schemes to pay for higher defence spending, many see the upcoming decisions on the Rosebank oilfield and the EV mandate as critically important.

Lizzi Collinge, the Labour MP for Morecambe and Lunesdale, said: “The upcoming decision on the ZEV [zero emission vehicle] mandate will have a huge climate impact, possibly the biggest one that’s on the PM’s desk.

“But it will also set the direction for tackling the cost of living and helping get our energy prices down over the coming decade.”

Catherine Fookes, the MP for Monmouthshire, said: “The government has some incredibly difficult decisions to make in the coming months and the prime minister will need to weigh up the consequences of each. We need the ZEV mandate to stay, and Rosebank to be rejected.”

A government spokesperson said: “The government is united in its commitment to the ZEV mandate and no decisions have been taken.

“We are committed to the phaseout of all new cars relying solely on petrol and diesel engines by 2030, and to 100% of new car and van sales being zero emission by 2035, and our legally binding net zero targets.

“Our consultation on the mandate will not change this, and will ensure we are taking a pragmatic and balanced approach to the ZEV transition.”

Under rules brought in by the last Conservative government, carmakers have to make sure they only sell EVs by 2035, gradually increasing the proportion over time to 80% by 2030.

The policy is expected to create greater emissions savings than any other, leading to nearly 14% of all the reductions to which the UK has pledged between 2028 and 2032.

Carmakers have warned for years, however, that the interim targets in particular are unattainable, arguing that higher inflation and a squeeze on living standards have pushed them out of reach.

The Society of Motor Manufacturers and Traders (SMMT) says the industry will miss this year’s 33% target by a wide margin, with battery EVs accounting for 26.6% of new car sales in the first 10 months of the year.

Those targets, however, do not take into account exemptions that allow carmakers to avoid fines even if they undershoot their targets, such as by selling more hybrid cars, or making up for lower sales of electric cars now by selling more in the future.

Mike Hawes, the SMMT’s chief executive, said: “The gap between demand and mandated targets continues to widen.

“Meaningful change to the trajectory, alongside expanded flexibilities throughout the regulation, is essential to bridge that gap, safeguard jobs and investment while keeping the UK’s zero emission transition on track.”

With ministers already having diluted the targets on multiple occasions since the policy was first proposed, the government launched another review into the policy in August, proposing five main options.

They were: to keep the mandate unchanged; keep it at 80% but extend the flexibilities by four years to 2034; reduce the interim target to 70%; reduce it to 60%; or reduce it to 50%.

That consultation kickstarted an internal battle in Whitehall. Jonathan Reynolds, the business secretary, has argued for the 2030 target to be reduced as far as possible, to 50%.

Heidi Alexander, the transport secretary, is believed to want it to be approximately 60%, while Miatta Fahnbulleh and her predecessor as energy secretary, Ed Miliband, are understood to want it to remain at 80%.

The prime minister would normally have sought to have resolved the dispute, but Burnham has recused himself from the decision because his wife, Marie-France van Heel, advises the board of the Manchester-based electric vehicle charging network Be.EV.

Government insiders say Haigh will probably sign off on a 2030 target of about 60%, while also extending the flexibilities in the targets until 2034. She is understood to have told colleagues, however, that she does not want them to come back in the future demanding another target reduction.

The decision will not only upset some Labour MPs, it will also dismay people in the wider environmental movement and in the EV charging industry, which is relying on high vehicle sales to recoup investment.

Shane Brennan, the chief executive of the trade association ChargeUK, said: “Weakening the mandate puts £1.7bn of charging infrastructure at risk and all the associated jobs and supply chain spending that goes with it.

“Charging investors’ confidence will be rocked by a third change in three years. Government should be in no way complacent about the long-term implications of being seen to cave to the short-term interest of global car importers.”

Paul McNamee, the director of the Labour Climate and Environment Forum, said: “Significant weakening of the ZEV mandate from the current 80% targets will be seen as a rowing back on climate leadership.

“If the government does this, it must provide assurance that the mandate will not be weakened again in the coming years, the 2035 target for EVs remains in place, and it delivers a robust industrial strategy to build a strong EV manufacturing base in the UK that will protect jobs in the long term.”