Transport Insights

MPs on the Business and Trade Committee, led by a centrist chair, have firmly aligned themselves with big business in support of its profits – and against the interests of the planet.

The Commons Business and Trade Committee (BTC) has written to ministers from the department that it scrutinises, and the Department for Transport, “warning that the combination of outdated ZEV Mandate thresholds and the threat of new trade barriers with the EU pose a potentially existential risk to the UK auto sector”.

I won’t get into the EU stuff because I don’t understand it, but the comments from committee chair Liam Byrne on the Zero Emission Vehicle mandate suggest that he has swallowed the pleadings of manufacturers hook, line, and sinker:

BTC calls for ZEV review to be brought forward and other measures for UK auto industry

In his letter, Byrne reveals:

Top of our list of sectors of concern is the UK’s automotive industry and so we took evidence from Jaguar Land Rover, Ford and the Society of Motor Manufacturers and Traders (SMMT).

We were told that the regulatory trajectory of the ZEV mandate no longer aligns with consumer demand:

This year, the industry is required to reach a 33% EV share in cars while sales remain below 25%, and a 24% target in commercial vehicles when the market is at 10%.

There’s a discussion to be had about whether manufacturers are “discounting” EVs as claimed, or overcharging less, but the EV mandate is 22%, albeit it is reported as 33% because of previous credit borrowing.

Also “sales remain below 25%” rather misses the point that sales are not flat and do not “remain” anywhere. I think he means “are currently”. Sales could end up at 28%, albeit that UK manufacturers will be short of this.

Byrne also says:

We are also concerned that the mandate is actively redistributing value away from UK producers, by incentivising the purchase of credits from overseas.

I think the gist of this is that UK producers that have a relatively low percentage of EVs are having to buy credits that over-achieve the mandate target. Quite why the committee doesn’t see this as incentivising more EV sales, I do not know.

Here’s the main point:

The design of the mandate is now severely hurting profit margins of UK manufacturers.

Profit margins can be hurt by measures that get manufacturers to rip consumers off less, and that isn’t necessarly a bad thing.

Byrne probably wouldn’t own up to being a Blairite but he really should have been less gullible, given that manufacturers have a clear incentive to exaggerate compliance difficulty to weaken the mandate.

But his framing – foregrounding industry concerns; emphasising competitiveness; and warning about burdens on business – is unreconstructed Blairism.

The serious point here is that if government sets rules and targets, manufacturers who say, ok, we didn’t comply but can you let us off are basically Southampton FC.