A Labour government would provide up to £60bn over five years to provide interest-free loans on electric cars under the UK opposition party’s plans for a “green industrial revolution”.
The party has revealed it would provide state loans worth up to £33,000 for 2.5m people to buy electric cars during its first parliamentary term, at a net cost of £3.5bn in lost interest payments. The money, averaging £27,000 per car, would come from a £250bn national transformation fund that Labour will finance through extra borrowing.
Rebecca Long-Bailey, shadow business secretary, will also announce on Tuesday at the annual party conference that a Labour government would invest £5.8bn in the automotive industry to accelerate the shift towards electric vehicles and the setting up of state-controlled battery factories and metal reprocessing plants.
“If we want our automotive sector to flourish, we need a government who is not afraid to intervene,” she will say.
The flurry of announcements, including a multibillion state investment in offshore wind farms, comes amid a showdown between environmental campaigners and union officials over the idea of a 2030 zero net carbon target. Campaigners are pushing for Labour to pledge a carbon-free future within a decade, but the unions are set to push back at a crunch vote on Tuesday.
Ms Long-Bailey will use her conference speech to promise to make £3bn available for car companies to invest in new electric models and technology and bring low-carbon vehicles into production.
Car manufacturers would be invited to bid for a portion of the £3bn of equity finance, capital in exchange for shares in the business, which they would be expected to match. Labour argues that it is not unusual for states to own stakes in car companies, citing the French government’s 13 per cent stake in the PSA group since it was rescued in 2014.
The shadow business secretary will promise another £2.3bn towards the construction of three battery plants, known as “gigafactories”, to manufacture batteries for electric cars. Those factories, which would be 51 per cent state-owned, would be based in Stoke, Swindon and South Wales and each would employ more than 3,000 people.
On top of this, the party would invest £500m in four metal reprocessing plants to reprocess cobalt and rare earth minerals used in batteries.
On Sunday Labour promised a separate £3.6bn for the fast rollout of an electric car charging network.
Meanwhile, the party would introduce a scrappage scheme for petrol and diesel-based cars over 10 years old, scrap the vehicle excise duty surcharge on electric vehicles bought for corporate car fleets and make the government car fleet electric by 2025. It would also set up publicly-owned community car-sharing clubs with 30,000 electric cars.
The shadow minister will also announce plans for a Labour government to invest £12bn of state funding into 37 new offshore wind farms which would each have a 51 per cent government stake.
Those plans would quintuple the amount of UK electricity coming from offshore wind farms to 52GW by 2030, equivalent to 38 coal-fired power stations.
With the price of offshore wind generation falling rapidly, Labour wants to accelerate its expansion. The government would slice off 20 per cent of profits from its stake in the wind farms to plough up to £1bn a year into infrastructure in held-back coastal communities — such as leisure centres, libraries and parks — to try to win local support for the schemes.
Labour’s plans, dubbed “people’s power”, would be financed through joint venture partnerships between new public-owned regional energy agencies and private offshore wind developers. The new wind farms would require £12bn of state investment and £70bn from private investors over eight years.
