Sanjoy Sen: The Government and Stellantis. ‘Picking winners’ is rarely a popular concept among Tories but it’s often a reality.

8 Mar

Sanjoy Sen is a chemical engineer in North Sea oil. He contested Alyn & Deeside in the 2019 general election.

The Government has been in “productive” discussions with Vauxhall’s new owner, Stellantis, over the future of the Ellesmere Port Astra plant and its 1,000-strong workforce. 

Three options are on the table: plod on building petrol cars until the 2030 government ban, close the whole place down or re-invent it as a long-term electric vehicle hub. The last one is evidently the most attractive but Stellantis is clear that it comes subject to government support. But are the fate of the factory and the fate of the Vauxhall brand one and the same thing? 

What is Stellantis, anyway? 

Back in 2014, Italian auto-giant Fiat acquired America’s Chrysler. And in 2017, General Motors off-loaded its European division (Vauxhall-Opel) onto France’s PSA Group (Peugeot-Citroen). That whole lot, comprising some 14 mostly over-lapping, loss-making brands, came together as Stellantis in 2021. MBA students will be poring over the internal politics and corporate culture clashes for years to come.  

Worse still, Stellantis is wildly over-represented in Europe but is miles behind in Asia. And its mainstream brands are under pressure from all directions: prestige players (BMW, Mercedes-Benz) are rolling out compact competitors while low-cost manufacturers (Dacia, Skoda) are fast raising their game. Then there are the externalities facing all auto-makers, from anti-car city mayors to debt-laden Generation Z preferring Uber to ownership

Stellantis does have one ace up its sleeve, though. Governments worldwide fret over redundancies, both in terms of the economy and the ballot box fall-out. Little wonder CEO Carlos Tavares can do the rounds drumming up taxpayer support globally. 

Government to the rescue (as usual) 

Brexit critics have been quick to highlight the reassurances offered to Nissan and the support demanded by Stellantis. But state backing is hardly new in the car industry. Germany recently offered up a billion Euros to secure the new Tesla factory over its EU competitors (sorry, partners). France already holds a stake in Stellantis with Italy set to follow suit. Even the Americans aren’t averse to a bail-out, rescuing both Chrysler and GM after they filed for Chapter 11 bankruptcy in 2009. 

The UK, of course, has plenty of experience here. Successive governments backed everything from DeLorean to British Leyland before finally losing patience. Even Margaret Thatcher, not a noted market interventionist, incentivised Nissan to come to Sunderland, resulting in a huge success.  

Tavares describes the UK decision to bring forward the petrol car sale ban to 2030 as “brutal”. In reality, the shift to hybrids and “pure electric” is inevitable – but Stellantis brands have been slower to transition than their rivals. “Picking winners” is rarely a popular concept among Conservatives but it’s often a reality. Kwasi Kwarteng needs to be confident that the Stellantis electric plan for Ellesmere Port looks long-term credible before committing taxpayer money. 

What might become of the Vauxhall brand?  

While the future of the factory might be secured, the Vauxhall brand itself could be a different story. In these Thunbergian times, car manufacturers are frantically ditching a century of petrol-based brand awareness and creating all-new, futuristic identities.

The Stellantis portfolio needs urgent pruning with even Chrysler under threat. Although its market share has long been slipping, a ruthless axing of the Vauxhall name wouldn’t be go down well in the UK. But a well-planned transition into a modern electric identity isn’t just achievable – it’s downright essential for success.  

A decade ago, former owner GM had high hopes for their Volt hybrid; a typical suburbanite could re-charge on their driveway, enjoy an all-electric commute and forget any range anxiety thanks to the back-up petrol engine.

Instead, it became a textbook example of marketing failure. Badged as a dowdy Chevrolet, it proved too radical (and expensive) for traditional buyers – yet too old-fashioned (and conformist) for super-trendy early adapters. The Volt came over here as the Vauxhall Ampera and suffered a similar fate despite being crowned 2012 European Car of the Year. Forgive the pun but they just didn’t plug it properly. Sorry. 

Adam Afriyie: Self-interest will drive up EV use and drive down pollution if charge points are available

18 Feb

Adam Afriyie is the MP for Windsor.

Elephants in the room have been spotted. Too few charging points and inadequate energy networks will crush any hopes of zero emissions by 2050 or wholly fossil-free vehicle sales by 2030. To keep our hopes alive action will be needed from both government and the private sector, as identified in excellent papers from Policy Exchange and Bright Blue.

With a viable route out of the pandemic in the form of vaccines and our EU relationship now settled, it is time to look to the future.

The Prime Minister is rightly looking at policies that will shape our country in the years and decades to come.

The green agenda

While some people sometimes bristle at the phrase “green agenda”, few would bemoan the aim of reducing travel costs, boosting energy efficiency, and placing the UK at the forefront of emerging high-tech industries which are kinder to the environment. I suspect that most of us are also comfortable with the concept that the polluter should pay.

From the raft of green priorities, it is zero-carbon transport that has captured my attention. We have already passed a tipping point. Not only have electric vehicles (EVs) come of age, they have become cheaper to run than traditional petrol and diesel vehicles.

Gone are the days of stressing over charging points. EVs have evolved from a slightly quirky city run-around to a smooth and dependable workhorse that is quietly displacing polluting vehicles.

The Government is right to continue encouraging their uptake when seeking to reduce emissions. Transport is one of the few sectors where emissions have actually risen since the 1990s due to increasing car ownership. EVs not only cut carbon emissions, they also reduce the emission of other harmful gases which are, literally, clogging our minds and choking people to death. Our towns and cities will be healthier places and our NHS will save billions on treating respiratory-related illness. If we can see an end to petrol and diesel car sales by 2030, then all the better.

The rollout of EVs is a highly conservative endeavour. Dictating that people must drive EVs today would be foolish and dangerous authoritarian madness. But it is a deeply Conservative approach to incentivise their uptake and to let people know that they can choose to save themselves a small fortune on fuel, fuel duties, emission fees, congestion charges, vehicle tax and gaining purchase subsidies in the short term. It is also rather virtuous to say that you are covering the cost of your own pollution!

Fragmented Infrastructure

Yet despite the benefits of EVs there is more to do on the infrastructure front.

Chief among them are doubts surrounding the reach, reliability and security of the charging network. Having used an electric vehicle for some time, I understand first-hand the practical infrastructure issues EV drivers are facing and the urgent need for government action to give charging confidence to the millions of drivers who will be switching to an EV.

While many people can charge at home with a three-pin plug or home charger, many more cannot. So we will need an extensive network of public and shared charging points for those who live in flats or cannot safely run a cable to their home overnight.

Charging points are best in convenient locations which are close to people’s homes, commercial areas and workplaces. Ideally, we would see a charging point available beside every on-street parking space and at every bay in a car park. It is a big ask. Yet to this end the Government must insist that local authorities give a clear roadmap to when, where and how charging infrastructure will be installed. Indeed we must install charge points five times faster than today and avoid charging black-spots particularly in rural areas.

The current rollout is fragmented at best. It is being managed by over 300 local authorities across the country using different operators, different standards, different security levels and a disparate divergent range of charging ports. Consumers are understandably bemused, uninspired, and lacking confidence.

The Government can also focus on supply-side measures, such as boosting our domestic production capabilities. An excellent example of this is the new £2.6 billion car battery factory, dubbed the “giggaplant” in Northumberland.

We could also look to expand the support made available to consumers when installing charging infrastructure in their homes and change the regulations so that all new homes must have a charging point.

The National Grid

Today, about one per cent of vehicles are electric. It will be a big ask to see that rise to 100 per cent within 10 years, but it is achievable if we act on infrastructure today.

This means preparing our energy network for the increased demands of millions of electric vehicles on the roads. Hundreds of thousands of charge points and thousands of petrol stations and public spaces must be serviced by both the national grid and transmission network. What works for 200,000 electric cars will not work for 20 million.

The national grid clearly has work to do as a vital aspect of our national infrastructure. Overall capacity and transmission networks must be able to meet demand but there is an even more critical aspect to consider. Our electricity supply must be protected from external threats, such as cybercriminals and hostile governments. We simply cannot be in a position where millions of Britons wake up unable to charge their cars and travel to work because the EV charging network has been hacked overnight.

A conservative approach

Protecting the environment need not cost you more than destroying it. It is right that, for now, the Government helps with the upfront costs and nudges people in the right direction with a range of incentives. The good news is that as the production of EVs is rising, the costs are falling. It is already cheaper to drive an electric vehicle than a fossil fuel vehicle, particularly if you have a home-charger, and the differential continues to grow.

Whatever the merits, the Government has set a hard deadline of 2030 for the sale of new petrol and diesel to cease. Instead of forcing people into electric vehicles, it is best if we continue to persuade them with incentives and inspire the confidence. Switching to an EV isn’t just good for the planet it is also good for your wallet.

Sanjoy Sen: Smart motorways need improvements. But there’s no getting away from the self-driving revolution.

8 Feb

Sanjoy Sen is a chemical engineer in North Sea oil. He contested Alyn & Deeside in the 2019 general election.

Back in 2017, I spoke of little else than my new set of wheels. First, the smug satisfaction of trading a gas-guzzler for a hybrid. Later, the anguished howls as Sadiq Khan cancelled its Congestion Charge exemption.   

But I never got round to explaining the main reason for swapping. Saving money, cutting emissions and even virtue-signalling all had their attractions. But what really got me motivated was good old-fashioned self-preservation. 

The aged tank was serving me well until it let me down twice in rapid succession. Getting stranded on the motorway on both occasions was no fun but at least I had a (hard) shoulder to cry on. I certainly wouldn’t have fancied the same experience in a “live” lane of a smart motorway, hoping everyone would spot me in time and swerve past. With the M1 getting progressively converted, I resolved to investigate scrappage schemes and find more reliable transport.  

By early 2020, there had been 38 fatalities on UK smart motorways. But it’s important to relate this figure to a baseline. Sadly, there are fatalities on all motorways so the first question is whether smarts are safer (or not) than conventionals. But scientific analysis is one thing. Public perception is also highly relevant. This matters when we reflect on how transportation is going. 

According to the stats in the Department for Transport Stocktake and Action Plan, smart motorways are slightly safer overall than conventional ones. That’s said to be because spreading traffic over more lanes and adjusting speed limits to conditions improves driver behaviour, thus reducing moving collisions.  

But what is going badly wrong is the rise in static collisions involving broken-down vehicles. The allegedly smart systems don’t always spot the obstacle (i.e. you) in a “live” lane. And even if they do, they rely on every single road user rapidly bearing down on the stationary object (again, you) and taking evasive action. Worst of all, there’s often no safe means of escape for vehicle occupants before rescue arrives.

Following a 2019 fatal accident in South Yorkshire, the coroner called for an enquiry into smart motorway safety. The local Police and Crime Commissioner has called for their ban as has Claire Mercer, wife of one of the victims. Tellingly, Mercer considers the jailing of the Polish lorry driver who hit her husband’s car as the wrong outcome. And following another South Yorkshire crash, the coroner indicated Highways England may face manslaughter charges

One of these days, when cars are all smart, we can safely have smart motorways. (More on that in a moment.) In the interim, the Government needs a clear plan to reduce accidents and restore trust. 

Right now, there are three types of UK smart motorway. Controlled Motorways (CM) retain the traditional permanent hard shoulder but have a variable speed limit. It’s the other two that raise most concerns: in All-Lane Running (ALR) motorways, the hard shoulder is permanently “live” while, more confusingly, in Dynamic Hard Shoulder Running (DHS) motorways it sometimes is and sometimes isn’t. It’s a (minor) step in the right direction that DHSs are being turned into ALRs.  

Few of us get to pick where to break down but in some cases (e.g. a puncture) it is possible to limp along to the next refuge area. The Stocktake calls for these every three-quarters of a mile but we might need more still in places. And they need to get a bit longer so you can accelerate off them safely to prevent the type of accident already seen. Plus better monitoring to detect stationary vehicles, both via technology and increased patrols.  

But the fundamental question is not whether we can make smart motorways safer (we can) or whether we can eliminate accidents altogether (we can’t): it’s do we actually need them? The short-term and the long-term answers could differ. 

The Stocktake notes motorway traffic has increased by 23 per cent since 2000 and contends smart motorways have helped absorb this. But, like most transport infrastructure, motorways are sized for rush-hour demand. With work patterns set to permanently alter post Covid, that peak potentially flattens. With, say, 20 per cent fewer office workers commuting (analogous to working from home one day per week), that translates into a significant reduction. So, with reduced road use a possibility, we could re-examine our traffic projections. On some motorways, we might discover we don’t need to drive in the hard shoulder, after all. 

Further down the line (but not much further), however, transportation is on the cusp of a revolution. Within a decade, vehicles are not only set to go electric, they’ll also become highly autonomous. Yes, some might write all that off as unrealistic, “woke” nonsense but even the quickest search on what real-world car companies are actually up to suggests otherwise. And when vehicles become smart (and can automatically respond to hazards), smart motorways finally make sense.  

Although UK motorways are among the safest in the world, the traditional hard shoulder has never been without its risks. Such facts are little consolation to those affected by smart motorway tragedies, however. If we’re going to retain public confidence, we need to see improvements. Let’s not lose sight of the big picture: post-Covid traffic patterns are set to change things but nothing like as much as the self-driving revolution will. 

Patrick Hall: A demand-led on-street chargepoint scheme will be essential to the electric vehicle revolution

4 Feb

Patrick Hall is a Senior Researcher at the think tank Bright Blue.

Last year, the Transport Secretary expressed the Government’s “unwavering support for a cleaner, greener transport future”.

The Government certainly appears to be living up to its rhetoric, recently bringing forward the ban on the sale of new petrol and diesel vehicles so it takes effect from 2030, committing large amounts of funding to support the manufacturing of electric vehicle  (EV) batteries in the UK, and most recently offering a £20 million boost to support the rollout of on-street chargepoints across towns and cities in the UK.

Ministers are right to address the rollout of on-street chargepoints. Recent polling shows that 44 per cent of drivers thought that a lack of local chargepoints held them back from purchasing an EV – the second largest barrier to EV uptake after their high upfront price.

For those who live in homes with no off-street parking, a lack of nearby charging infrastructure is a significant barrier to EV ownership. Off-street parking provides EV owners with the opportunity to install their own EV chargers on their premises, such as in a garage, driveway, or private parking bay. Being able to charge an EV at or near a driver’s home is important for prospective EV owners, given that this is how the vast majority of EV charging takes place.

But about a third of homes in England do not have off-street parking. If homes do not have off-street parking, EV drivers are reliant on either on-street charging infrastructure or ‘at destination’ chargepoints located in places such as the workplace, supermarket or shopping centres.

A look at the number of public chargepoints by region and local authority reveals the postcode lottery when it comes to accessing on-street charging infrastructure near drivers’ homes. London had the greatest availability of chargepoints, with 57.3 chargepoints per population of 100,000. However, this varies significantly between different London boroughs. For example, Havering only has five chargepoints for every 100,000 people whilst in Kensington & Chelsea, this figure is 197.9

The North East and South East of England have 30.4 and 27 chargepoints per population of 100,000 respectively, whilst the West Midlands and Yorkshire and the Humber both have the poorest ratio in England of 17.30 chargepoints per population of 100,000.

The need for on-street charging infrastructure is especially important for London, where two thirds of all EVs parking in residential areas overnight will require on-street charging in a high EV uptake scenario.

Currently, local authorities determine where on-street chargepoints will be installed in residential areas, funded in part through the On-street Residential Chargepoint Scheme. In Bright Blue’s new report, Driving uptake: maturing the market for battery electric vehicles, we recommended that this process should instead be demand-led, with an onus on local authorities to install on-street chargepoints when requested by residents within three months unless there are reasonable grounds for objection. This would be based somewhat on such a scheme in the Netherlands, which has the greatest density of chargepoints in Europe.

Drivers should be able to access an online portal established and administered by local authorities for making their request. Drivers would be required to show proof of purchase of an EV to their local authority, before making a request through the online portal for the installation of a chargepoint near their place of residence. The request could be assessed on various criteria, for example whether the driver has access to off-street parking, the walking distance to other existing or planned chargepoints in that area, and the occupancy rate of nearby chargepoints.

If the request is approved, the local authority would open a consultation period of six weeks, where stakeholders could challenge or propose amendments to the plan. Following this, and assuming no setbacks as a result of the consultation period, the chargepoint would then be published on a map and other nearby registered EV drivers could be notified of its location before being installed.

Local authorities could either own the chargepoints or tender out their ownership to a private organisation. The operation of the chargepoint could also be tendered out to a charging network.

In Bright Blue’s report, we also recommended that interoperability be a condition for central and local government funding towards chargepoints. This would mean all chargepoints across a borough or district would be easily accessible regardless of the charging network they are connected to. But, if this was not implemented, any new on-street chargepoints in the borough should be grouped under a single tender to one charging network. This would ensure that all chargepoints within a borough or district would be accessible via the same charging network.

A demand-led, online on-street chargepoint scheme such as this would ensure that households with no off-street parking are more reassured about purchasing an EV. Additionally, such a scheme would ensure that chargepoint installation is targeted towards areas where they would be utilised.

If EV uptake is to increase significantly within the next nine years, policymakers should, among other measures, introduce this demand-led on-street chargepoint scheme.

Robert Sutton: Conservatives have abandoned free market principles in the quest for environmentalism

27 Oct

Rob Sutton is an incoming junior doctor in Wales and a former Parliamentary staffer. He is a recent graduate of the University of Oxford Medical School.

A trend over the last decade in British politics has been a convergence of the major political parties towards near-consensus on environmental issues. Their thesis is that our current economic system will lead us towards environmental catastrophe; that the only way to avoid such catastrophe is radical innovation of that economic system; and that it must be the Government which leads this radical innovation.

Despite the impression given by media coverage and the doomsayers of the Twittersphere, these clauses are neither internally undisputed nor natural consequences of each other. Global warming is a generally accepted phenomenon, with a strong empirical basis in historic climate data and a convincing theoretical basis in our understanding of the physical chemistry of the atmosphere.

What is much less well understood is the future trajectory, the range of possible outcomes, and what policy positions might be inferred from those uncertain outcomes (for those unclear about the distinction between scientific models and reality, the current pandemic has given us some important lessons.)

That has not halted the political convergence on the necessity for urgent action. But for the Conservatives, the adoption of the rhetoric of climate catastrophism and the unquestioning call for an eco-friendly planned economy puts us in an internal ideological conflict with one of our most valued principles: that no central economic control can outperform the efficiency of the free market in exchanging resources, maximising returns on labour and assigning value to products and services. Government interventions invariably introduce inefficiencies. The best way to encourage innovation is for governments to cut regulations and generally stay out of the way.

Yet this principle seems to have taken a back seat as the proclamations of the most pessimistic of environmental oracles dominates the policy conversation. The proposals suggested in the 2019 Conservative manifesto pointed towards an economic intervention of a scale not attempted by any government since the Second World War. There is an assumption that the principle of the free market is flexible if the goal of the economic intervention is sufficiently noble.

One red flag was the apparent interchangeability of the major parties in their pledges for the 2019 general election. The Conservatives stood for “reaching Net Zero by 2050 with investment in clean energy solutions and green infrastructure to reduce carbon emissions and pollution” and “investing in R&D; decarbonisation schemes; new flood defences…; electric vehicle infrastructure…; and clean energy.” These enormous government spending plans were proposed despite the simultaneous claim that “we believe that free markets, innovation and prosperity can protect the planet.”

Labour had similar prescriptions: “More rewarding, well-paid jobs, lower energy bills and whole new industries to revive parts of our country,” while scalding Conservatives for “leav[ing] the fate of whole industries and communities at the mercy of market forces.” The Liberal Democrats predictably followed suit, but with the added promises to plant over 100 trees per minute for the foreseeable future and an entirely unenforceable “legally binding target” on emissions for future parliaments to promptly ignore.

None of these proposals recognises the true economic or human impact of such an artificial remodelling of our entire society. Nor have they provided concrete plans for how these radical transitions might be carried out (with job losses being strategically ignored.) And those new jobs which are flaunted are unlikely to be efficient or self-sustaining. Once government support is pulled, they have a habit of promptly drying up as the reality of weak demand sets in.

The Government has a moral obligation to take sensible steps to build a regulatory environment which supports the protection of our natural one. But there is no amount of cutting red tape which will make buying a Tesla instantly affordable to the masses or will allow electric vehicle charging points to pop up on every street corner overnight. The mass repurposing of territory for solar, wind and hydroelectric requires that land be taken from someone and kept for the foreseeable future.

These barriers cannot be lowered quickly through deregulation alone. There are considerable economic, technological and logistical problems. However much some argue for state intervention on an unprecedented scale to rebuild our economy as an eco-friendly arcadia, there is no way this can be done on a short time-scale without great pain and waste. The bloat of a government attempting to rebuild our entire economic machine in an idealist vision would be horrifying to anyone calling themselves a fiscal conservative.

Green conservatism’s flaws are tied to the ideological fragility of one-nationism. In trying to be all things to all people, we have sacrificed free market economics at the altar of environmental catastrophism. We have abandoned a basic principle of our ideology for a policy position which has yet to be clearly articulated. To embrace the radical goals of the environmental lobby would require imposing further market distortions at a time when the economy is already haemorrhaging from the self-inflicted wounds of the Government’s severe and unremitting Coronavirus response.

The current government has struggled to articulate a positive vision for environmental policy. As such, we are forced to act as a brake on the radical proposals of left-wing organisations who have the media and public rapt, slowing the movement but inevitably drawn in their direction.

Conservatism is about more than tempering the madness of the left. We need an honest and consistent position on this most pressing of policy issues. Facing up to the absurdity of our current inter-party arms race to see who can come up with the boldest pledge to save the planet would be a good place to start. Net zero by 2050 sounds nice but is conveniently beyond reproach or scrutiny for at least the next six parliamentary terms.

A transition to a low-carbon economy will happen at some point. The limit to the reserves of fossil fuels necessitates this. But it must happen organically. Using state aid to drive the transition is incompatible with innovation. The British automotive industry of the 1970s was an example of the stagnation which occurs when a government permits market distortions in order to achieve political means: the workers, consumers and companies each suffer.

Some would argue that the dichotomy between environmentally-motivated economic intervention and free markets is a false one and that we can, in some unspecified way, have our cake and eat it too. This implies a flexible understanding of at least one of these principles. Conservatives should advocate for a realistic and distinct stance on environmentalism, and one which does not require the sacrifice of our key principles.

Richard Ritchie: The climate crisis – and this pandemic – have made the case for a carbon tax stronger than ever before

15 Oct

Richard Ritchie is the author of a recent history of a secretive group of Conservative MPs called The Progress Trust (Without Hindsight: A History of the Progress Trust 1943-2005). He is Enoch Powell’s archivist and is a former Conservative Parliamentary Candidate. He was BP’s director of UK Political Affairs.

There is something in the air, and it’s not just carbon or virus emissions. Earlier this month, ConservativeHome carried a piece by Rachel Wolf, championing carbon pricing – that is the polite way of describing some form of carbon tax. Then, the influential economist Dieter Helm published in September a new book, Net Zero: How We Stop Causing Climate Change, which explains in detail the rationale behind a carbon tax. And from The Times, we’ve learnt that the Chancellor is considering such a tax for his next, Covid-19 budget.

It’s not a new idea. When I worked for BP and climate change first entered the political agenda – before, the main worry was that oil would run out and become too expensive – thoughts on how to price carbon were already in circulation. The oil and gas industry saw some merit in the concept, but favoured emissions trading over a tax, correctly identifying this as a less expensive, Europe-inspired fudge. Now, the combination of a pandemic and climate crisis gives the idea of a carbon tax real traction.

The political implications are important. Climate change and Covid-19 have much in common. Both require us to “follow the science”, although in neither case is the science unanimous. Both are manna from heaven for those who wish to “shut-down” the economy, and limit personal freedom. Both provide excuses for expanding the state. And in both cases, the cure can prove worse than the disease.

There can be little doubt that, so far, global policies to reduce carbon emissions have failed. This won’t worry those who are sceptical of the causes of climate change. But if one believes a failure to act now is to bequeath a catastrophe to future generations, then those on the “right” should be as concerned as those on the “left”.

Where we differ will be on the remedies. So far, “left-of-centre” remedies have generally been the norm. The Kyoto Protocol in 2007 and the Paris Agreement in 2015 have been little more than an opportunity for governments and lobbyists to parade their compassion. Whatever Trump’s motives may be surrounding climate change, his analysis of the Paris Agreement is basically sound. Some of course think its failure is due to inadequate targets; but their targets would make the economic consequences of Covid-19 seem trivial in comparison.

So the question is whether there is a policy which would reduce carbon emissions effectively, in an economically rational way. This is surely one reason why Rishi Sunak is attracted by the idea of a carbon tax as a means of reducing carbon consumption.

In Dieter Helm’s view, the word “consumption” is pivotal. It is no good concentrating solely on industrial emissions, as these won’t necessarily have any global effect – it simply drives emissions abroad, frequently to China. But a carbon tax which crucially incorporated a carbon border tax on imports would, by targeting attention on everyone’s personal carbon footprint, incentivise many things which probably make sense in themselves anyway.

There will be many Conservatives who will argue that all taxes do harm, and that the introduction of a “new” tax is incompatible with Tory beliefs. But unless one is totally sceptical of the science, and dismissive of the need to balance the books, there is much to be said for taxing “bads” rather than “goods”.

Of course it is open to many objections. For example, does the Treasury regard a carbon tax as an emergency measure to raise revenue, or a longstanding instrument to influence behaviour? If it is to serve its purpose, it will eventually yield less revenue.

Equally, if applied in the wrong way, it could merely make this country less competitive. Without care, it could prove regressive. Indeed, if the Paris riots over fuel duty are any guide, it could also prove politically impossible.

Then, for it to work, there must be alternatives for consumers to choose from. Not many will choose an electric car, for example, if there is no guarantee that it can be charged along the journey. (Although mention of electric cars also serves as a reminder that not everything is at it seems – an electric car takes twice as much carbon to produce than a conventional one. A carbon tax would sort that out too).

On the other hand, if properly devised a carbon tax has the capacity both to raise government revenue and to reduce carbon emissions, and even to incentivise other countries to follow suit. Matters to be decided include how the carbon price is fixed and at what level it should be introduced. Should it be levied on consumption or production? Does the tax provide sufficient time for consumers to adjust?

This is the political danger. Carbon taxes could come to the rescue of a cash-strapped Chancellor, because they hold out the prospect of raising new revenue without breaking a manifesto commitment not to raise existing taxes. But if the carbon tax is set too high at the outset, it will be counter-productive. If the Treasury is following Helm’s advice, “the trick is to start low, but credibly signal that the price is going to go up as high as is necessary to achieve the (carbon reduction) target.”

There is no painless way of reducing carbon emissions. Those on the “left” will embrace a policy which involves “picking winners”, nationalisation, subsidies, exemptions, regulation and illiberal compliance. A lobbyist’s paradise. The alternative is to incentivise new technologies, create new markets and provide practical signals to consumers. This is the purpose of a carbon tax. It will never be “popular” because the costs of transforming the networks, communications and transport of this country to facilitate lower carbon emissions are enormous.

But compared with the alternatives, a carbon tax is at least rational and addresses all the major sources of carbon emissions, namely agriculture, transport and electricity. Moreover, it produces a new source of government revenue at a time when it is desperately needed.

Any new tax is depressing to a free market Tory. But climate change, like pandemics, raises issues which are more important than economics. If it is a whole load of nonsense to claim that today’s climate change is man-made, then we are free to carry on as we are.

But if not, Tories have an obligation to advocate alternative solutions to those of the socialist “greens”. The market is the best way of allocating scare resources effectively. But in a time of war, the market cannot tell us how much to spend on butter or guns. That is a political choice, and it is the nature of the choice presented by climate change, if most scientists are to be believed. On so many levels and for so many reasons, it is hardly surprising if Sunak is pondering one.

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.

Sanjoy Sen: How can the Government accelerate a cleaner, more efficient future for transport?

10 Sep

Sanjoy Sen is a chemical engineer in North Sea oil. He contested Alyn & Deeside in the 2019 general election.

“It’s a bit like saying we’re banning the sale of steam engines by 2040″. So responded Aston University’s David Bailey to the axing of “conventional” (i.e. petrol and diesel) new car sales. As green alternatives improve and prices fall, which they both are at last, today’s vehicles will become obsolete long before any government deadline.

On the face of it, the road to zero-emission transport ought to be straightforward. Anything too big to lug around massive batteries (lorries, buses) works fine as a hydrogen fuel-cell vehicle (FCV). Small stuff (private cars) are well-suited to becoming electric vehicles (EVs). And intermediates (taxis, delivery vans) could be either.

That, of course, overlooks myriad “where” issues: where to source the hydrogen and electricity, where to obtain battery metals, where to plug in. And that’s just one future scenario: the automotive industry is feeling highly uncertain with autonomous (self-driving) technology set to ultimately consign driving and car ownership to history. Furthermore, Covid-19 might fundamentally alter travel patterns, with greater flexibility replacing rush-hour madness.

Here in ConHome last month, Ruth Edwards MP proposed bringing forward the cut-off to 2030 whilst accelerating electric vehicle (EV) roll-out. Although I can’t violently disagree with that, EVs still aren’t an option for everyone yet. Meanwhile, others who could switch remain confused about technology and are wary of legislation changes. So, in the absence of a clear roadmap, how best might the Government help transportation to support the economy – and the environment?

Short-term: all about EVs?

Last year, I made some tentative EV queries. At one leading manufacturer, the UK’s annual allocation had long been snapped up on-line. At another, the dealer had plenty more customers than cars. Whilst I chose to hang back, EVs are fast becoming a practical, affordable proposition for many: it’s supply that can’t keep up until battery production ramps up and new models hit the market.

An increased purchase grant or scrappage scheme would offer manufacturers a much-needed short-term boost. But, as per Norway, could these become largely subsidies for the well-off? There’s only one thing I might contest in Edwards’ article: even Jeremy Clarkson isn’t berating EVs any more, it’s the dearth of plug-in facilities that infuriates him. To tackle the public’s fundamental concerns, government support might be better directed towards the charging network. (And, for that matter, energy storage.)

For many, however, EV prices and charging headaches remain a deterrent for now. But commuting on a small battery backed-up by a petrol engine whenever required might offer a near-seamless transition. So, rather than focussing solely on EVs, let’s see the Government recognise the value of plug-in hybrids and support these also.

But the biggest short-term improvement in urban air quality might be via an early switch towards zero-emission public transportation. Whilst the Government has provided urgent sector support during the current crisis, the Bus Service Operators Grant (BSOG) still favours diesels over FCVs and EVs: an obvious candidate for review.

What does the long-term future look like?

Environmental concerns and new technology put transportation into a state of flux long before Covid-19 did. And no-one seems more uncertain than the automotive industry itself. In Germany, Mercedes-Benz abandoned hydrogen cars just as deadly rival BMW announced its own FCV. Over in Japan, Toyota has long backed hybrids allowing Nissan to forge ahead in EVs, including Sunderland’s top-selling Leaf. Whilst in the States, GM’s Volt competitively-priced plug-in hybrid flopped (Vauxhall Ampera to us) – yet the public just can’t enough of upstart Tesla’s super-pricey EVs.

But there is growing acceptance that autonomous technology will prove a game-changer. Responding to the threat of sector entrants Google and Uber, Volkswagen’s vision of the future is a self-driving, shared-use ‘pod’, summoned up via an app. (So the next time you hear “I’m never buying an EV” or “you won’t catch me driving one of those plug-in things”, you’re probably listening to an enlightened futurist, not a frustrated Luddite.) This is a reality government needs to contend with in years to come, not decades.

Self-driving is often seen in a purely urban context but its opportunities could go much further. In rural areas, bus operators often ditch lightly-used routes uneconomic for a large, manned vehicle. Here, the Government might encourage early adoption of autonomous mini-buses operating in response to real-time demand: the Industrial Strategy Challenge Fund is a welcome first step in this field. As well as a lifeline for the elderly and the socially-isolated, as we work from home in remote locations or commute at different times, it’s economies with flexible transportation that will emerge the strongest post-Covid.

And what shouldn’t the Government do?

Gone are the days when you could freely drive any vehicle down any street at any time. But let’s not make the future any more complicated than it needs to be. In addition to addressing infrastructure bottlenecks and supporting new technology, the smartest thing the Government can do is not confuse or antagonise motorists.

ConHome regulars will recall my satisfaction at trading an ageing gas-guzzler for an eco-friendly hybrid – quickly followed by indignation at the withdrawal of its Congestion Charge exemption. Clobbering folks nudged into doing the right thing might prove highly counter-productive, creating uncertainty and provoking resentment. Similarly, the Scottish government’s Workplace Parking Levy (a hastily thought-out concession to the Greens) penalises those lacking a public transport alternative, whilst in itself doesn’t reduce emissions.

No-one can predict precisely how the future of transportation is going to pan out. But it’s critical for the Government to consult consumers, industry and experts alike before taking the big decisions. The consequences for getting it wrong are significant. Remember, diesels were once touted as the clean future. And why rolling out smart motorways before the advent of smart vehicles was never going to end well.