Memorandum submitted by The Society of
Motor Manufacturers and Traders (SMMT)
The Society of Motor Manufacturers and Traders
(SMMT) is the leading trade association for the UK automotive
industry, providing expert advice and information to its members
as well as to external organisations. It represents more than
500 member companies ranging from vehicle manufacturers, component
and material suppliers to power train providers and design engineers.
The motor industry is a crucial sector of the UK economy, generating
a manufacturing turnover of £47 billion, contributing well
over 10% of the UK's total exports and supporting around 850,000
jobs.
We welcome the opportunity to contribute to
this inquiry. We have responded to the pre-legislative process
for the Climate Change Bill and the Local Transport Bill. Both
bills cover governance issues and are therefore pertinent to this
inquiry.
CLIMATE CHANGE
POLICIES AND
TRANSPORT
Climate change is an international issue, and
the UK is taking a lead on the environmental agenda. Addressing
climate change at a local level is possible, as local authorities
have a plethora of policy options available to them. It is widely
understood that local solutions and hence local policies are best
for local issues. However, the issue of climate change is being
addressed at all levels of government, and there must be consistency
to avoid confusion and conflicting messages.
The role of central government in leading and
supporting on climate change issues is multi- faceted. Central
government should lead by example, and also provide clear guidance
and coherence for local, regional and devolved government. It
is essential that for any local or regional climate change policy
there must be a central reference point. This is of particular
concern for SMMT in relation to transport policies. Differences
exist between levels of government and regions in criteria and
principles for transport policies with climate change aspects,
such as CO2-related varied parking charges (London Borough of
Richmond) and the proposed Emissions Related Congestion Charge
(ERCC) for London. SMMT is concerned with the inconsistency between
these levels and also duplication. There is a lack of clarity
and coherence in policies which means confusion for consumers
and vehicle manufacturers amongst others.
For car manufacturing in the UK, CO2 regulations
are set at an EU level for products, nationally Vehicle Excise
Duty is set through CO2 banding, as are levels of fuel taxation.
Additionally, at a local level in the UK there are differences
in charges for driving and parking your vehicles based on CO2
bandings. There are multi-level pressures, with differing criteria,
meaning our members are subject to increased pressures on CO2
breakpoints. There needs to be good communication and understanding
across all levels of government to ensure the full context of
policies is understood. Our members seek international harmonisation
for climate change policies to ensure they are efficient, effective
and fair. Cars and other automotive products are built to comply
with the majority of regulations.
Government is pursuing UK emissions targets
through the Climate Change Bill. Targets and regulation are one
way in which central government can encourage action on climate
change. However, it should be understood that targets must be
realistic and achievable and that "climate change related
areas like waste and transport" cover a diverse range of
issues each of which have different economic, social and environmental
impacts, therefore caution should be exercised when implementing
and comparing the effectiveness of climate change policies. Efforts
to reduce carbon from transport in particular, unlike for example
refuse collection, has a wider impact than a local area.
CENTRAL GOVERNMENT
SUPPORTING LOCAL
GOVERNMENT
There currently appears to be a lack of joined-up
thinking in the roles of different levels of government, government
departments and regulators, in tackling the issue of climate change.
In particular, there is a serious lack of strong national guidance.
This may be due to the "newness" of the issue and also
recognition of the urgency and public awareness. However, joined
up policy/regulation making is not a new issue and this should
be addressed. Recent examples to help local and regional governments
have included the setting up of the Local Better Regulation Office
to account for better communication and working methods between
regulators, local authorities and central government. Mixed messages
from different levels of government can cause confusion and lessen
the impact of climate change policies. London Boroughs are an
example of different "green" policies in a region. Ultimately,
all levels of government should base policies on a sound impact
assessment with consistent criteria. The proposals for an ERCC
in London and the timings for discounts and increased charges
(pre- and post- mayoral elections respectively) show how local
politics should not impact on good policy making. From the viewpoint
of the automotive industry, joined up regulatory initiatives and
the passage of regulation from international, EU, UK and local
levels, has not always worked well. For example, manufacturing
sites are subject to an increasing amount of burdensome reporting
regulations and requirements, the result is that similar information
is transmitted to various government agencies and departments.
From the EU level, manufacturing sites comply with the IPPC directive
and many are included in the EU Emissions Trading Scheme. At UK
level, they then comply with the CCA/CCLs and now the Carbon Reduction
Commitment (CRC) has been introduced. Some permits relating to
the trading schemes are administered at local level, as well as
nationally and internationally. All of the above have reporting
requirements, yet data cannot be shared causing undue administrative
burdens on our members—better regulation principles at all
levels of government must include an assessment what other policies
are in place.
GOVERNANCE AND
POWERS
The governance barriers to local and regional
action are being addressed through current parliamentary Bills,
and the effectiveness of them can only be judged in practice following
their assent. Local policies work well when properly co-ordinated
and are subject to full stakeholder consultation. There is concern
that some local authorities may adopt specific climate change
policies to ensure they receive associated funding streams, such
as has been suggested in relation to road pricing. The Transport
Act 2000 ensured local authorities had the powers to implement
local road pricing schemes, but not until the recent introduction
of funding for road pricing schemes (through the Transport Innovation
Fund) has there been widespread consideration of implementing
local schemes.
TARGETS FOR
DIFFERENT LEVELS
OF GOVERNMENT
As mentioned, SMMT welcomes the Climate Change
Bill but is concerned it is unilateral and climate change policies
are most effectively addressed on a global stage. There is concern
that disaggregated targets can lead to distinct differences in
policies between localities. Carbon reduction policies need to
be based on sound economic, environmental and social assessments.
Policies need to be implemented and managed strategically so that
they achieve the objective of carbon reduction.
COMMITTEE ON
CLIMATE CHANGE
It is already notable how important the role
of the Committee on Climate Change will be following recent amendments
proposed in the House of Lords for the Climate Change Bill. The
level of importance of the Committee is also recognised by industry.
Its strengths will be its representative and responsible nature.
The Committee should consist of experts working with sound scientific
and economic evidence, be independent, and avoid being politicised
whilst representing all levels of Government. The reporting requirements
of the Committee should also ensure it is responsive to needs.
SMMT would support full stakeholder engagement with the Committee,
in terms of business and government, where for example organisations
such as the National Local Government Network and the CBI would
prove useful.
GOOD PRACTICE
IDEAS AND
THE ROLE
OF "OTHER"
INSTITUTIONS
As aforementioned, SMMT supports government
leading by example; it also supports the sharing of best-practice
and worst-practice. Central government should have responsibility
for co-ordinating networks for information sharing. A good example
of government and industry working together is the Act on CO2
website (www.dft.gov.uk/ActOnCO2). Here consumer is given clear
messages ahead of purchasing a vehicles on the lowest-CO2 emitting
vehicle for their needs. Consumers can see this in terms of VED
band, which is also reflected by the new car labels in car showrooms.
There is consistency and clarity in this approach.
Good practice should also include a robust review
policy at all levels of government to ensure that policies which
are not meeting their objectives are changed. The organisations
mentioned in question 10 of the inquiry are not an exhaustive
list. In our experience support from the Energy Savings Trust
has been inconsistent and caused serious disruption to the market
and uncertainty for consumers and manufacturers. The EST administered
PowerShift grants which gave incentives for the purchase of low-carbon
vehicles. The grant was removed by the EST in 2004 and the market
was distorted and ensured demand for gas powered cars collapsed.
The role of such organisations needs to be subject to guidance
to ensure consistency in climate change and other policies.
Should you have queries on any of the points
in this response, please do not hesitate to contact me.
14 January 2008
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