UK Edition
Car chiefs meet Chancellor as industry calls for support on new technology
An end to the “demonisation” of diesel cars and support for new technology such as battery vehicles that will help improve air quality topped the agenda at a summit between motor and Chancellor on Thursday.
Leading figures from the industry met with Philip Hammond and other ministers including Transport Secretary Chris Grayling at No 11 as they sought government backing for the UK's £77.5bn a year car sector.
The meeting – understood to have been requested by the Chancellor – was aimed at hearing the car sector's concerns, particularly about how British businesses will deal with the challenges thrown up by new technologies such as electric vehicles.
Car bosses are understood to have called for what one attendee described as "a long-term approach" from ministers, adding that they must "recognise that developing new technology is expensive and requires support, such as assurances that infrastructure is in place in the form of charging points and the electricty generation to support electric vehicles".
They are also understood to have voiced concerns about the "demonisation" of diesel, which has come to the fore in the wake of the VW scandal.
Motor industry executives are understood to be worried that the Government has done little to end concerns about the fuel, pointing out that while older diesel cars are more polluting, newer ones are just as clean as petrol.
Although the Government has said it will stop the sale of new cars powered solely by petrol or diesel by 2040, the fuels could still be in use long after through hybrid-electric power trains and the industry wants the Government to recognise this.
One industry source present for the talks described them as "constructive".
Car makers – who export 80pc of their UK output – have been one of the most vocal in campaigning for a tariff-free Brexit trade deal, but a source at the meeting said while Britain leaving the EU did come up, it was not the focus of the event.
The industry trade body the Society of Motor Manufacturers and Traders has previously warned that the sector – which directly employs 169,000 people in vehicle manufacturing and 814,000 across the wider industry – could be hit hard if the UK leaves Europe without agreeing a deal.
No deal could mean a £1,500 hike on the price of cars imported from Europe as standard WTO tariffs are imposed, and reciprocal levies put on cars built in the UK and sold abroad making them unattractive to foreign buyers.
A return of customs controls on components brought in from abroad for UK vehicle plants – only about a third of the parts in a British-built car are domestically supplied – would also add delays and costs to the industry.
Factories producing cars rely on lean “just in time” supply chains, holding sometimes just a few hours of parts in stock. Any minor hold-ups at the border because of fresh red tape could see work on production lines grind to a halt.
Speaking just after the last election, Mike Hawes, SMMT chief executive, warned the Government that it “is time to stop playing with words. ‘Soft’ or ‘hard’ Brexit and now ‘open’ mean nothing. It’s time to be brutally honest – our sector needs a comprehensive and bespoke trade agreement.”
Executives from some of the UK's biggest car companies attended the meeting. It is thought that senior staff from JLR, BMW, Nissan and Honda were present, as well as key suppliers into the manufacturers.
A Treasury spokesman said the meeting was one of a series of regularly scheduled events, playing down increasing worries Britain will blow out of Europe without agreeing a trade deal.