New chancellor gives support for integrated approach towards climate change issues

Although brief, the Pre-Budget Report address by Chancellor Alistair Darling MP, included the promise of increased long term investment in transport, which should not only benefit the economy and UK competitiveness, but could also lead to environmental gains.

Published alongside the PBR are key points from the interim report on the King Review of low-carbon cars that will impact on the automotive sector. It is welcoming that King recognises the role the consumer can play in making low carbon choices – having the immediate ability to reduce their CO2 emissions (and fuel bill) by 25 per cent – and also the part fuel plays in the integrated approach to tackling climate change.

'The chancellor has made this address while having one eye on the stack of reviews the government has seen, and is waiting on,' said SMMT chief executive Christopher Macgowan. 'Although the economy appears to be stable and in good health, there is still a lack of clarity and long term direction on which to base firm business planning. As usual, the devil may be in the detail and the greater benefit to the motor industry may become more apparent after detailed evaluation.'

The government claims that it appreciates the importance of considering the framework of taxation of cars used for business travel and will be making announcements on future policy in this area in Budget 2008 – on that basis SMMT strongly urges the scrapping of the irrelevant three per cent surcharge for diesel cars which unfairly penalises those who choose lower CO2 emitting vehicles. On a more positive note, SMMT welcomes the fact that there is to be a freeze on large haulage vehicle excise duty rates in 2008-09.

The move to allow local authorities to levy business rate supplements is one to view with caution. SMMT is wary of the cost implications and impact on businesses – especially in the automotive sector – recognising its importance to the economy (£48bn turnover, 190,000 manufacturing jobs) while also pointing to significant progress made across a range of environmental goals, such as production efficiencies saving an estimated 700,000 tonnes annual CO2 at manufacturing sites across the UK. One of the key findings of SMMT's eighth annual sustainability report Towards Sustainability, also published today, is the effect competitive pressures have had on employment in the motor industry in recent years. This report can be downloaded from the homepage of the SMMT website

SMMT welcomes the announcement that climate change agreements, whereby firms sign up to deliver energy and emission savings, will continue until 2017 and look forward to discussing with government how best to take this measure forward.

The industry also looks forward to seeing the results of more investment in education and training and hopes to see increased emphasis on manufacturing skills, especially in the automotive sector.

10 October 2007 Staff

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