Ed Miliband calls for an electric vehicle revolution for every part of the country to boost car manufacturing industry and create jobs

In a speech today (Thursday) Labour’s Shadow Business Secretary Ed Miliband will call for an ‘electric vehicle revolution’ in every part of the country, setting out ambitious proposals to back Britain’s car manufacturers, create jobs, and make owning a zero emission vehicle an option for all.

Miliband will set out Labour’s plan to secure the industry’s future, boost employment, and support people across the country to make the switch to electric:

• Back automotive manufacturers and create jobs by part-financing the creation of three new, additional gigafactories by 2025, providing greater security for the sector and shoring up Britain’s global leadership in the electric vehicle market
• Make electric vehicle ownership affordable by offering interest-free loans for new and used electric vehicles to those on low to middle incomes to remove the upfront cost barrier; and trialling a national scrappage scheme
• Make it easier for people to drive an electric vehicle, wherever they live, by accelerating the roll-out of charging points on streets and targeting areas left out like Yorkshire, the North West and the West Midlands

He will set out how critical constructing gigafactories is for the future of our automotive sector, especially in light of the trade deal with the EU, because we need a strong domestic battery supply chain to remain competitive and to build on our position as a leading electric vehicle producer and to sell to the world.

Crucially, Labour’s policies would ensure that everyone in the country can benefit from the electric vehicle revolution, rather than bake in unfairness. Low-income families are often priced out of electric vehicle ownership, with people in the South East four times more likely to own an electric car than people in the North East. Figures show that charging points are unevenly distributed with Yorkshire, the North West and West Midlands having far fewer charging points.

In his speech from Labour Party headquarters, Miliband will lay out Labour’s vision for a green economic recovery with fairness at its heart. He will criticise the Government’s lack of ambition and delivery, including its failure to bring forward a green stimulus instead relying on an under-powered National Infrastructure Bank, and its decision to scrap the industrial strategy.

Ed Miliband MP, Labour’s Shadow Business Secretary said:

“To back the car industry and create jobs, Labour would bring forward ambitious proposals to spark an electric vehicle revolution in every part of the country.

“By extending the option to buy an electric car to those on lower incomes and accelerating the roll-out of charging points in regions that have been left out, we would ensure that everyone could benefit - rather than bake in unfairness.

“And we would invest in securing the industry's future. While it’s right that government has said the sale of new petrol and diesel cars will end, it’s wrong it is imposing a massive transition on our manufacturers from Whitehall then washing its hands of responsibility.

“It’s not fair, it will damage our manufacturers, and it will mean losing out on the chance to be the world-leader in the electric vehicle market. Labour would back our manufacturers and the communities with proud histories in the industry, but the Government is asleep at the wheel.”

And in his speech he is expected to say:

“This green transformation could make us a fairer country; creating good, secure jobs wherever people live; cleaning up the air we breathe and tackling air pollution; protecting nature and giving people access to the green spaces we have all valued so much during lockdown.

Ensuring everyone has a warm home with affordable energy bills and helping to tackle the deep inequalities we face between our regions.

For Labour, this is the absolutely central mission we face when it comes to the climate emergency.

What we cannot do is put a green coat of paint on our unequal, insecure economy.

Every worker whose job might change, every consumer who may face a change, has got to be at the centre of our concerns.

This is the DNA of Labour: Green and fair. Green and red together.”

Ends

Notes to editors

• The speech can be viewed on Thursday here: Ed Miliband: Securing jobs through a green recovery - The Labour Party

Policy detail

Gigafactories

• The Faraday Institute estimates that eight battery production plants ('gigafactories') will be needed by 2040 for the UK to have a flourishing – or even sustainable – automotive industry.
• If we build the gigafactories we need, the Faraday Institute estimates that by 2040, 78,000 new jobs will be created. In the absence of any gigafactories producing batteries and associated EV manufacturing, the Faraday Institute forecasts that direct automotive employment would be 105,000 lower in 2040.
• As a start, Labour is calling on the Government to provide part-financing by 2025 for the construction of three new large-scale gigafactories, in addition to the one already agreed with BritishVolt.
• This part-financing should include the option to be delivered through public equity stakes, whereby public authorities- for example Combined Authorities- develop joint ventures with private partners and investors, backed by the UK Infrastructure Bank. Public-private partnerships of this kind have been successful in establishing gigafactories across Europe.
• The investment should be on a joint venture model including a public equity stake (owned by regional or local public bodies). If approved, in exchange for the equity investment, part ownership of the infrastructure is transferred to the regional/local public body. The public entity is then a permanent investor - not seeking to exit in a profit-seeking manner in the future. The investment is not a subsidy - the money invested earns a return on the same basis as private investment.
• The public investment needed to secure three factories would depend on the levels of private financing available. Based on European estimates and modelled costs, Labour estimates this would require no more than £1.5 billion of public investment over the rest of this Parliament. This is £500 million per factory- the same amount that Government offered for 1 Gigafactory. Critically, this would be a commercial investment that will therefore yield future returns to the public purse.

Interest free loans

• Labour is calling on the Government to be ambitious about EV ownership. 108,205 EVs were sold in 2020 - a 180% year-on-year rise.
• Lower-income families are often priced out of EV ownership, with the average cost of a “non-luxury” EV far outstripping equivalent petrol and diesel cars.
• EVs are cheaper to run and maintain than their petrol and diesel counterparts.
• To further stimulate demand for EV purchase, Labour is calling on the Government to provide interest-free loans to consumers for the purchase of new and used EVs.
• Loans should be targeted at those on low to middle incomes.
• The cost to government of interest free loans would depend on uptake. The cost to government for every 100,000 new electric vehicles paid for via loans is estimated at £156 million. Labour believes the Government should be willing to fund a maximum of 1 million purchases over the next two years to give manufacturers confidence. The amount of loans is contingent on demand.

Scrappage scheme

• Labour is calling on the Government to adapt Mayor of London Sadiq Khan’s successful vehicle scrappage scheme on a trial basis aimed at facilitating the electric vehicle revolution.
• The existing scheme, announced in 2019, allows qualifying vehicle owners to claim up to £2,000 for scrapping older and polluting vehicles.
• The scrappage scheme would initially be available for one year and will aim the oldest, most polluting cars to be scrapped. Getting dirty vehicles off the road is essential to reducing pollution, and forms part of Labour’s broader demand for a new national Clean Air Act.
• The London scheme is costed at £25 million. There are currently more than 2.6 million cars registered in London, compared to 24.5 million in England outside of London.
• If the same cost assumptions are made as with the London scheme, and funding is provided to Local and Combined Authorities on a basis proportionate to the number of car registrations, then the cost of the policy would be £235 million.

Charging infrastructure

• The latest figures from the DfT show the uneven regional distribution of charging points.
• The top concerns preventing people from purchasing EVs today are ‘driving range anxiety’ (26%) and ‘lack of charging infrastructure’ (22%).
• Labour is calling on the Government to give the UK Infrastructure Bank (UKIB) a specific remit to invest in charging infrastructure projects that would otherwise struggle to attract funding, deprived regions and areas with low local authority take-up.
• In other countries, public funding is being used effectively to de-risk and crowd-in public investment in charging infrastructure; for example the European Investment Bank has made a significant number of investments across Europe in EV infrastructure, France, Germany, Spain and Italy.

Green economic recovery

• Labour has already called for a £30bn Green Economic Recovery that should be spent as part of a one-off economic stimulus package, which should be used to fund this.