Prime minister Andy Burnham has been busy appointing his cabinet and over the coming weeks the automotive industry will hope for signs that the UK Government recognises the importance of a healthy and effective motor retail sector.
Jonathan Reynolds has been appointed secretary of state for business, innovation, science and trade. He was recently chief secretary to the treasury when Kier Starmer was prime minister, however he also served Starmer as his business secretary
Heidi Alexander remains in of secretary of state for transport, a cabinet post she has held since Starmer appointed her in November 2024. Her department has been under pressure recently to launch a review this year of the Zero Emission Vehicle Mandate (ZEV Mandate, which many vehicle manufacturers believe is setting excessive targets for new car and van sales.
John Healey has been appointed chancellor of the exchequer. He was recently the defence secretary with Starmer.
Miatta Fahnbulleh has been appointed secretary of state for energy security and net zero.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: “On behalf of the UK automotive industry, I congratulate Andy Burnham on becoming prime minister and wish him every success as he forms his new government.
“The Labour Party has already demonstrated its commitment to automotive manufacturing through the Industrial Strategy and, building on those foundations, the sector can be a powerful engine for growth, delivering investment, innovation and high value jobs in every part of the UK.
“There remain many challenges for the industry, both at home and abroad, but if we strengthen our competitiveness and provide greater support for the transition to net zero, we can drive reindustrialisation and economic renewal in every region and nation of Britain. We look forward to working with the prime minister and his team to realise that opportunity.”
Labour’s forgotten promise
At the Institute of the Motor Industry, its chief executive Nick Connor said: “We congratulate Andy Burnham on becoming prime minister and we genuinely welcome his stated commitment to re-industrialisation and to technical and vocational skills. However, before the general election, Labour promised to champion the motor industry – a sector fundamental to the UK’s economy and its social infrastructure. Two years on, that promise has not been delivered, and the skills gap in our sector has become a road safety issue.
“Vehicles are changing faster than at any point in history – electrification, connected systems, automated driving technology. The people who maintain, repair and recover them must be demonstrably competent, yet apprenticeship starts are falling and qualification levels are nowhere near where demand requires.
“The new Prime Minister has an immediate opportunity to put this right: mandate IMI TechSafe, protect the rigour of automotive apprenticeships, and give our 800,000-strong workforce the recognition and investment it deserves. The IMI is ready to work with him from day one.”
The IMI is calling for the following commitments:
- 1. Automotive Embedded in Re-Industrialisation Strategy – The Labour Party’s 2023 pre-election commitment was for a dedicated automotive strategy that encompassed manufacturing, aftermarket, supply chain, and workforce development. That has not been evident to date. The IMI is calling for recognition that a sector employing 866,000 people and generating £37 billion in annual GVA cannot be treated as a footnote within a broader manufacturing category and should take a central role in a Re-Industrialisation Strategy.
- 2. Consistency on ZEV Policy – Mixed messages on EV policies including the ZEV mandate have caused employers to pause investment in training. Whatever the final mandate parameters, the government must make clear that the transition to electric vehicles is irreversible and that skills investment must accelerate accordingly.
- 3. Government Mandating of the IMI TechSafe Standard – As the scope of technological development in automotive expands, the IMI is calling for government to ensure all technicians working on safety-critical aspects of vehicles on UK roads hold a recognised competence qualification, protecting both workers and motorists.
- 4. Apprenticeship Reform That Doesn’t Put Road Safety at Risk – The IMI has serious concerns about the current apprenticeship reforms. It is calling for a review of the reforms that maintains rigorous, independent end-point assessment, as well as protecting the depth and quality of training required to achieve real occupational competence.
- 5. Automotive Skills as a Pillar of Skills England – The sector’s workforce needs must be explicitly named and resourced within the national skills framework, not left to be inferred from cross-sector language.
EV home charging to get cheaper
Burnham’s first policy change announcement, of a cut to VAT on domestic electricity this autumn, will inadvertently mean the cost gap between those able to charge an electric vehicle (EV) at home and those who cannot will grow even wider.
The rate of VAT applied to household electricity will be cut from 5% to 0% from October 1, with the new PM saying the measure would “give people breathing space” and “put more money in people’s pockets”.
However, it will mean that EV drivers will pay even less for charging at home, while those without off-road parking and the ability to charge an EV a home will be even more disadvantaged.
EV drivers currently pay 20% VAT on public charging and a 5% rate to charge their car at home, with this two-tier system already being criticised for its unfairness by motoring organisations including the AA, RAC and SMMT.