Sale of New Petrol and Diesel Cars and Vans

Part of the debate – in the House of Commons at 1:30 pm on 4th July 2019.

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Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield 1:30 pm, 4th July 2019

It is a pleasure to follow Antoinette Sandbach. I congratulate my hon. Friend Peter Kyle on securing this debate and commend him on what he said about the experience of driving an electric vehicle. He is also right that ambitious targets are important if road transport is to make the contribution it needs to if we are to achieve net zero emissions by 2050. But he rightly spent a lot of his time also talking about pathways to get there, because no target, however ambitious, implements itself: it requires action.

We have a mixed picture in that regard, however. There is good news: there was an increase of nearly 30% in the sales of alternatively fuelled vehicles last year. But more sobering is the fact that alternatively fuelled vehicles still account for only 6% of new vehicle sales, and electric vehicles—battery electric—and fuel cell vehicles account for just 0.7%. It is clear that a step-change is needed in the take-up of such vehicles if we are to meet the targets envisaged by the Committee on Climate Change that my hon. Friend talked about. That means that people need to feel confident enough about driving an alternatively fuelled vehicle.

The fact is, however, that anxiety about running out of power is still a barrier to both private and fleet buyers in making the shift to electric. The good news is that the range of electric vehicle batteries is growing exponentially. I am pleased to say that the Government have been more proactive than before in providing investment to speed up research and development to further advance battery technology here in the UK, but we are late to the game compared with some other countries, and I say to the Minister that a lot more needs to be done to stimulate that.

As has been said, infrastructure is a key part of the picture. Again, there are some welcome initiatives. The fact that we now have legislation in place allowing the Government to mandate provision and inter-operability of rapid charging points is good, but there is so much more yet to do if we are to achieve the step-change in charging infrastructure necessary to provide the confidence for a step-change in the take-up of electric and other alternatively fuelled vehicles. That must include providing answers about who is going to pay for the investment in the charging infrastructure at the scale needed and who is going to maintain it; my hon. Friend Dr Drew made that point earlier. It also requires tackling the issue of how to enable home charging, particularly for those who do not have off-street parking. We also need to see a lot more activism from the Government on the grid: how to avoid overload and how to make it easier for vehicles to become energy sources as well as energy users, given that the majority of their time is spent parked rather than on the move.

If people are to make the shift to electric, they also need to be able to afford to do so, and the price of new electric vehicles is still beyond the reach of most people. Solving that is not entirely within the gift of Government, but Government can help with the right consumer incentives. Ministers say that the fact that the numbers of electric vehicles and other alternatively fuelled vehicles being sold has gone up means that they can cut back on the plug-in car grant for electric vehicles and scrap it entirely in the case of plug-in hybrids. However, this market is still fragile and volatile—my hon. Friend the Member for Hove made that point very well—and customer incentives help stimulate both private sales and, crucially, the fleet market, whose turnover in new EVs is critical to driving the used car market, in which most motorists buy their cars. I say to the Minister that now is not the time to be reducing those customer incentives.

The pathway to net zero is not only about how to make sure there is a step-change in the number of alternatively fuelled vehicles on the road; it is also about the transition and how to ensure that on the way there the petrol and diesel vehicles on the roads are as clean as they can be to protect air quality and produce as little CO2 as possible. The good news is that a great amount has already been achieved in that regard. Technological advances mean that emissions from new vehicles on the road are just a fraction of what they were just a few years ago. But the picture is not all positive: last year, aggregate CO2 emissions from new cars rose for the first time in a decade. That happened not because the environmental performance of new vehicles has taken a dip; average new car CO2 emissions are 31% lower than in 2000. The biggest factor has been a nearly 30% drop in the sale of new diesels.

That drop is partly a consequence of the injury the automotive industry inflicted on itself through the VW dieselgate scandal, but it is also partly a result of the confused messages that have been coming out of Government about newer diesel engines—not least in the vehicle excise duty regime, which penalises the cleanest diesels on the road while leaving older dirtier diesels untouched. Little wonder, then, that both private motorists and companies leasing new vehicles have delayed plans to replace vehicles, with detrimental consequences for both CO2 and air quality.

There are lessons for the Government here about the need to end those confused messages, and those lessons particularly need to be learned in the approaching comprehensive spending review. I urge the Minister to look again at vehicle excise duty rates in relation not only to the supplement on new diesels, but, even more significantly, to the impact on vehicle taxes if the worldwide harmonised light vehicle test procedure, or WLTP, is applied unchanged to current VED rates. The Society of Motor Manufacturers and Traders estimates that consumers would face an increase in costs totalling about £500 million, based on the size of the current new car market, if WLTP figures are applied to current rates of VED. It is difficult to see how that could add up to anything other than a depression in sales, and the sales that would be hit would be those of the most environmentally efficient conventionally powered vehicles.

We must also remember that if sales are down, that hits the health of the automotive sector, which is already rocked by the uncertainties of Brexit. If the industry is hit, the pace of investment in developing new generations of alternatively fuelled vehicles is also hit, undermining the very thing we are trying to achieve in the first place.

My plea to the Minister is to listen to what the sector is saying, to make sure that the policies adopted on vehicle taxation support rather than damage the market for cleaner petrol and diesel vehicles, and to support rather than damage the sector’s ability to invest in the way that is needed to enable the shift to electric and other alternatively fuelled and zero emission vehicles: by making them a more realistic and attractive option for many more people than they are now.