Ian Howells: Hybrids are the key to delivering the Government’s climate transport goals in the UK

13 Oct

Ian Howells is Honda Europe’s Senior Vice President. This is a sponsored post by Honda.

Honda has committed to achieving carbon neutrality globally by 2050, and we fully support the UK Government’s decarbonisation targets. In fact, throughout Europe, we have an ambitious target for 100 per cent of car sales to feature electrified powertrains (EV, plug-in hybrid, advanced hybrid) by 2022.

But, with our global experience and engineering expertise we know that delivering an affordable, decarbonised future cannot rely on just one technology.

A multi-pathway approach is required, in which a broad range of technologies are used to deliver CO2 reductions quickly and effectively, while ensuring that personal mobility remains affordable and accessible to all. This is vital to the Government’s levelling up agenda and underpinning the fundamental principle of personal choice.

Honda’s approach would see battery electric, advanced hybrid and – in time – hydrogen and decarbonised liquid fuels deployed to provide customers with the right vehicle, for the right use, at the right price.

For Honda, battery electric vehicles (BEVs) will play a key role in our proposed approach. BEVs provide a significant number of benefits to consumers, enabling zero emissions driving over short distances and within urban environments.

But BEVs are not a silver bullet. Challenges around affordability, infrastructure and technology limitations mean that the Government cannot rely solely on electric vehicles to completely replace internal combustion engines by 2035, if it does not also intend to restrict consumer choice.

An approach that relies only on expensive electric cars risks turning driving into a privilege only afforded to the wealthy, while pricing those who most need it out of personal mobility.

While prices are coming down, BEVs remain expensive in comparison to advanced hybrid and conventional cars. The UK’s own Advanced Propulsion Centre projects that cost parity between electric and petrol cars will not be reached by 2035 – and will take much longer for larger family cars or popular SUVs. The simple truth is that not everyone will be able to afford an electric car and outlawing advanced hybrid alternatives will price people out of essential mobility for work, school, caring and socialising.

Pursuing a battery electric only strategy will create a new inequality between those who have easy access to charging – and those in the Midlands and the North who do not.

Despite welcome additional investments from Government, the UK’s charging infrastructure is far from ready for a full transition to electric vehicles within 15 years. Public charging is unevenly spread across the country, with London, the South East and Scotland seeing the highest levels of public charging infrastructure, with the Midlands and the North much worse served. Wealthier drivers in the suburbs may be able to install off-street charging at home, but people with no access to off-street parking, such as those in tower blocks or dense urban areas, will struggle to find accessible and convenient ways to charge their car.

Current battery technology is nearing the limits of performance – and resource scarcity means there are not enough raw materials for a full shift to battery electric cars.

The current lithium-ion batteries used in electric cars today are reaching the limits of power and performance. These limits mean that EVs cannot be used to replace ICE vehicles in all cases. Whether towing caravans on the family holiday, pulling tradesperson’s equipment, or powering a sports car – battery electric cannot yet deliver the needed performance on its own.

Performance and power cannot simply be increased by installing bigger batteries, as these vehicles would incur weight and cost penalties. Furthermore, there are limits on global cobalt supply, with the European Commission estimating that by 2030, even with recycling, demand will far outstrip supply.

Honda’s advanced hybrid technology is at the heart of a multi-pathway approach that delivers significant emissions reductions, keeps mobility affordable and accessible – and still has scope for significant improvements. Signalling an end to this technology would be counter-productive.

Hybrid technology is far more affordable to a wide variety of consumers. Our new Jazz Hybrid starts from £19,000, which is much cheaper than a similarly sized BEV from other manufacturers – even when government support is taken into account. The price difference is much starker when looking at larger family-sized vehicles or the ever popular SUV category.

By combining compact, efficient, specially designed petrol engines with battery power, Honda’s advanced hybrid technology provides the power and performance that customers need to meet a wide range of needs, ensuring that customers feel confident in moving into low emissions mobility.

Our advanced hybrid products on the market now, are already making a contribution to CO2 reductions. Our new Jazz Hybrid emits 30 per cent less CO2 than its non-hybrid predecessor. In addition, there remains scope for significant ongoing emission reductions as advanced hybrid technology continues to evolve and move towards zero emission.

Decarbonised liquid fuels are an exciting way to further reduce transport emissions, alongside electrification.

The development of decarbonised liquid fuels – produced from renewable energy sources – have the potential to further reduce the CO2 performance of hybrid vehicles, and are a viable route to decarbonising the existing petrol and diesel fleet, again significantly bringing forward the reduction in carbon emissions.

As the Prime Minister said in his 2020 party conference speech – at some point the State must stand aside, and let the private sector take the lead. The role of Government is to set consistent and realistic targets and provide support, but it must let businesses innovate and invest, while enabling consumers to choose the technology that fits their needs.

The challenge of becoming carbon neutral by 2050 is huge. Honda has also embarked on that journey and will dedicate all its global resources to meeting this vital goal. The UK will be at the forefront as we deploy our technologies, and we support the Government’s ambitions of zero emissions mobility. But our global experience and engineering know-how make it clear that we can’t rely on one technology alone – a multi-pathway approach is required.

As ministers finalise their plans for mobility in a net-zero future, they must ensure that mobility remains accessible and affordable for all. They can achieve this by recognising the important role played by advanced hybrids and ensure these can remain part of the technology mix over the long term, as part of a multi pathway approach to our shared goal of clean, accessible and affordable personal mobility.

To find out more about Honda’s advanced hybrid technology, visit our UK website here.

Ed McGuinness: Getting everyone back to work will save the economy

27 Jul

Ed McGuinness is a former Chairman of Islington Conservative Federation, founder of Conservatives in the City and stood for Hornsey & Wood Green at the general election.

Growth in GDP, from an economic perspective relies on three key areas. The first is labour; both population growth affecting its size and the participation rate. The latter of which will surely take a hit from this crisis. The second factor is capital investment in the economy and with the Government’s long-term investment plan this may very well be somewhat addressed. The third factor is known as Total Factor Productivity, productivity improvement or technological advancement. Normally in economics it is addressed residually (as capital and labour are fairly quantifiable), but generally, whilst we are holed up in our houses, especially the younger generations, the ability to be productive, to innovate as part of a social group, is limited. The bottom line is economic growth may jump around for a few months, but longer term will flat-line.

Boris Johnson’s rallying call of “build, build, build” follows well known and tried Keynesian economic principles, but putting aside that a British New Deal package comparable to that in the 1930s would actually cost north of  £700 billion, “shovel ready” infrastructure projects are rarely so in the United Kingdom. One can only look at the High Speed 2 rail link project which has been ongoing since 2009, the Heathrow expansion project, ongoing since the same year, and even the Channel Tunnel, arguably a huge success, took 18 years from agreement to completion. It would likely take a herculean effort, much like that seen in the early weeks of the Covid-19 response to expedite even the most minor infrastructure projects. Whilst this will be necessary for medium to longer term growth, a short-term booster shot is necessary to mitigate the risks of a permanently smaller economy.

Whilst the levelling-up agenda could perhaps see a step-change in the national economy, the wealth generating ability of London’s financial and multinational corporations is a capability that needs to be protected and nurtured if there is to be any economic recovery at all. London contributes between one quarter and one third of the entire economic output of the country, a population greater than the next 13 largest cities combined, and 11% of the UK’s tax revenue – a considerable and much needed source of cash as we emerge from this crisis. We have already seen some positive news with regards to the future of financial services in the post Brexit City which offers some security, but to get London’s economy firing again, benefitting not just the South East but the rest of the country. We must either adapt very quickly or risk a lasting hit to one of the world’s global economic command centres.

To do this people must get back to work – a simple aim, but complex in execution. The challenges are overarching twofold. First psychological and personal, people are genuinely concerned that they might get ill and naturally do not want to travel in close proximity (as is almost inevitable) in London and other city transport networks. The second, whilst fed and influenced by the first is separate, and is practical and organisational. In order to comply with new social distancing office space and transport has had to readapt to the point where it is impossible at the moment to have 100% capacity. Some offices in Canary Wharf have indicated a 50% capacity cap on open plan offices which seen have seen desks normally fit for six now only fit for one or two.  We must address both these issues when it comes to returning to work. By addressing the latter, a proof of concept is deliverable which will go a long way to alleviating the former, psychological concerns.

It is clear that accepting the current situation as the ‘new normal’ is not a solution. It would see not only resilient industries face collapse, but also highly operationally levered sectors like hospitality; fast food and tourism fall away alongside second order effects of rental and credit defaults. Therefore, the risks must be managed and mitigated. Practically those travelling should be encouraged to wear facemasks, wash their hands and observe social distancing, but we must change our working habits fundamentally, in the short term if we are to succeed.

Younger workers should be encouraged to return to the office more quickly than the manager class. The damage to younger people’s careers from Covid-19 has been highlighted in the potential loss of hospitality, retail and other feeder professions, but younger people who work in an office environment need social interaction and personal networking with colleagues, which is of huge importance to younger staff. Development through social interaction is not just a theory isolated to infants, but extends throughout all growth phases of life. Not only that, but younger people are generally less well paid and as such live in accommodation ill equipped for a healthy working environment lacking the space for a home office or a separate room for working. The active psychological damage of an absence of delineation between work and personal life, alongside the passive damage caused by separation from peers, will have a damaging effect on younger people if they do not return to work imminently.

There also needs to be a reform of the working day. If, as it is at the moment a 9-to-5 day, it is natural that rush hour falls either side of these, considerably so in London and other cities where commuter towns exacerbate the effect. London transport should run a rush hour service, therefore increasing capacity across the system, throughout the day, Companies, particularly those who work in close proximity to one another and are served by a limited number of transport links, for example in Canary Wharf, should collaborate to reassign their working day and stagger start and stop times and more importantly enforce them. An additional point of assistance would be to alter market opening hours from 9.30-4.30 as advocated by the Association for Financial Markets in Europe and the Investment Association, but not accepted by the LSE in the most recent review. This would lose the overlap with Asia, which is arguably not statistically significant, but would retain the lucrative overlap with US market whilst allowing more time, particularly in the morning, for commuter travel.

The Government must remember the importance of London and other cities’ regional influence on productivity – a problem in the UK even before Covid-19 – without which the entire country could level-down. By focussing on only the short-term operational aspect, large office-based London businesses may see a slight recovery, but support industries around them may collapse which will lead to longer term pain. On this occasion, working together to protect the centre is protecting the rest.

Roderick Crawford: We have interests in the rest of Europe, but must be free to run our own foreign policy

6 Jul

Roderick Crawford works on conflict resolution in countries such as Yemen, South Sudan and Iraq, and on Brexit-related matters. He is a former editor of Parliamentary Brief.

One could be forgiven a sense of déjà vu as we enter the second round of accelerated talks, this time in London. The high hopes of breakthrough at the start of last week’s talks were dashed as they broke up on Thursday last. The same sticking points remain: the legal structure of the agreement, level playing field commitments, including state aid, and of course fisheries. Specific details have not been released, so it is hard to comment on why the progress on getting agreement on underlying principles has failed to materialise.

Though working through the underlying principles of the agreement should help identify where the barriers to agreement lie, a look at the overarching principles of the negotiating positions of the two parties may throw better light on the lack of progress.

Last month, Der Spiegel ran an interview with the Anglophile former German Ambassador in London, Peter Wittig; he provided a revealing glimpse into the EU’s perspective on the negotiations. Asked whether, in effect, the EU should accept a hard Brexit and let the UK go, he says, no:

‘We should continue to endeavour to tie Britain as closely as possible to the European Union. Europe can only survive in the competition between the USA and China if it is strong and united. I always thought it was good that the Federal Government was the voice of pragmatic reason in all these difficult negotiation phases. I advise everyone not to think about the short-term effect, but to keep a strategic eye on where Europe should be in five, ten or 15 years.’

The quote is interesting because it is part of an intra-German conversation from a friend of the UK expressing pragmatic views on the big picture in which Brexit sits. While the UK has been caught up in its own arguments and political storms – and of course running ourselves down – we have lost sight of the impact of Brexit on the EU: it has been considerable.

The EU has lost its only global city, its only global finance centre, its most dynamic services economy, 12 per cent of its consumers – more when weighted for income – and its only universities ranked in the world’s top ten. It has lost a major pillar of good governance (the UK was a consistent upholder of the EU’s rules-based system) and a source of sound counsel.

As the EU looks to develop its common foreign policy and defence co-operation, it does so now from a far weaker base. The UK was one of two EU permanent members of the UN Security Council, one of two nuclear powers.

It had the only blue-water navy capable of working with the US; China has just achieved a two aircraft carrier capability – the UK will soon be there, too. It has a battle-tested professional army and air force. The UK alone had the capability of power projection across the world – albeit with limitations – and the will to do so. The Foreign Office, despite its shortcomings, is still world class and the UK’s influence is, arguably, stronger across the world than any single EU member state.

The EU is diminished, while the fault lines on which it sits become more unstable. To its east, Russia is reviving in confidence as its actions in Ukraine, Syria, and its challenges to the West demonstrate. Turkey has become a regional player, outside of the NATO fold, and looks to a future untied to the EU. The Middle East and North Africa are unstable, and a source of potential and probable mass migration to the EU driven by demographics, economic and political failures and climate change.

The UK looks out across the North Sea to Norway, Denmark and the Netherlands, and across the Channel to Belgium and France; to our west lie the USA and Canada. It is an envious position to be in, though not one deserving of complacency: we still want a secure and stable EU. We are committed to the peace and security of Europe through NATO; in these respects, our interests and obligation in NATO, we are tied in.

One of the problems in the current negotiations is that the EU has re-written history to build up its own role in keeping the peace of the last half century. One of its foundational myths is that it has been the EU that has kept the peace in Europe. It even claims responsibility for the Belfast Agreement.

But its claims to success are absent of evidence. It is the transatlantic partnership that has kept the peace in Europe; it was the Northern Irish, London and Dublin – with US support – who brought about the Belfast Agreement. The EU forgets its role in the break up of Yugoslavia, and the subsequent wars and civil wars ended only with US engagement. Its diplomatic bungle over Kosovo, when it resurrected the July 1914 ultimatum to Serbia, ended likewise – and at great cost in civilian lives. The EU has not kept the peace in Europe.

The EU’s ambitious partnership proposal is overly ambitious, based as it is on inflated ideas of its own story and present capability; the ideas of uniquely shared values and interests ignore that they are shared with the English-speaking world and beyond. When the myth is removed, and the reality of the EU’s position is seen — its risk levels, its lack of investment in NATO and its own level of defence preparedness, and its poor relations with its neighbours — it is hardly an attractive partner; more of a liability.

The EU, quite understandably, wants the UK as closely tied in as possible to its defence and foreign policy (and economy). The UK, quite understandably, does not. Present commitments through NATO provide sufficient security to the EU’s members and help balance much, though not all, of their security concerns. The UK will do more, through co-operation bilaterally with members and freely alongside the EU too.

The EU and UK can co-operate to secure shared interests, but ultimately, though the UK wants a stable and secure EU and stability and security for its member states, there are differences in interests. The UK must be free to run its own foreign policy, champion alliances that may take precedence over that with the EU and policies that the EU will oppose — even the freedom to support member state interests against those of the EU institutions. It cannot be tied-in to a punitive governance structure to prevent it exercising such choices.

The overarching principles of the EU and the UK as regards governance of the future relationship are in conflict — we can’t be tied-in and free simultaneously; papering over the differences would breed confusion and likely lead to fresh upsets in the future. The UK cannot afford to accept a single overarching governance structure or claims upon it in the field of the EU’s common foreign policy and defence.

Howard Flight: High streets, air travel, restaurants, the arts. How the virus is transforming our lifestyle.

6 Jul

It is becoming clear that the Covid-l9 crisis will lead to substantial changes in the British lifestyle.

First of all, a significant part of the workforce will be working from home on line. People have learnt from current experience that board and other meetings can be conducted quite satisfactorily on Zoom or Teams.  Employees will not need to travel, at great expense in discomfort with no seats, and can live away from London and the South East, where good houses are cheaper.

The knock on effects of Zoom and Teams are also going to reduce the demand for office space in London and other major cities.  Office space could be converted into residential use – so reducing the cost of residential property.  Much of the massive increase in office space over the last three years may end up to being converted into accommodation.

The Office for National Statistics (ONS)  has found some surprising results from its recent surveys.  The impact of lockdown on people’s lives has been revealed in official figures, showing that more than a quarter are considering changes to their relationships (divorce), job or home.

For the first time, the ONS has focused on aspects of life that are the cause of unhappiness.  Big life changes after recovery from the Coronavarius are being planned by 28 per cent of adults and, of these, 42 per cent want to make a change to their work; 38 per cent are looking to move on from relationships and 35 per cent are inclined to move home.  Family lawyers have already reported an increase in the number of divorce cases exacerbated by financial problems.

Researchers have also found that 40 per cent of adults feel that some parts of their lives have changed for the better. Of those who reported positive lifestyle changes, 56 per cent said they were able to spend more time with their family and close friends.  The ONS also found that nearly half of those aged between 60 and 69 had experienced positive lifestyle changes compared with only 24 per cent of respondents aged over 70. Exactly half said they were enjoying a slower pace of live.

It remains to be seen how many of these intentions will be carried through, albeit that a lot of people will need to change jobs as there  their previous jobs will no longer be available.

There are four related territories which are exposed to massive change for survival: the high street, travel, hospitality and culture.

The high street is still threatened by online shopping in an unfair tax regime.  The Government has permitted the online shopping industry to enjoy substantial tax advantages, undercutting the high street.  It pays no business rates and is maybe registered abroad, so saving on VAT and corporation tax.  What is needed overall is a level tax  playing field.

Travel is probably the biggest area effected by Covid-19.  The total value of cancelled flights amounts to £8 billion for the last four months.  Liability for this will be fought over for a long time to come, where there are now two key  legal principals – in the UK “Acts of God” and, imported from Europe, “Force majeure”.  The industry cannot afford to refund the £8 billion total, and it is governments that have insisted on the closure of air travel.

Restaurants, pubs and hotels have had mixed and an often interlinked experience – overall, a negative one caused by Government lockdown requirements.  Some opening up is now occurring, and local authorities are encouraging and supporting the provision out outside restaurant facilities There is an economic need for restaurants..

The territory which the Government has now announced a £1.5 billion package for us the performing arts.  The individual performers have had all their bookings cancelled, through to Christmas with no compensation and no future bookings.  It should be remembered that the arts contributes more to Britain’s international earnings, in aggregate, than does the City of London.

The Government seems to be waking up to the importance of Britain’s musical industry.  One of our friends who is an internationally recognised opera singer is trying to set up a major outdoor performance in Hyde Park, similar to the Pavarotti Concert over ten years ago.  This, however, will require the Government to provide the insurance cover against the risk of Covid-l9 infection.  There are three historic precedents where the Government had to put up such cover – and, ironically, made a good profit from so doing.