Written evidence submitted by Vauxhall Motors Limited (IAQ0067)

  1. Vauxhall welcomes the opportunity to input into the Environment Food and Rural Affairs, Environmental Audit, Health, and Transport Committees joint inquiry into improving air quality.

 

  1. Vauxhall is part of an integrated European business with both direct parent company Opel Automobile in Germany and new ultimate parent company Groupe PSA in France. We are a significant contributor to the UK economy directly employing 4,800 people and a further 30,000 people indirectly through our supply chain and retailer network. The UK was Opel Automobiles largest market for new registrations in 2016 and Vauxhall stood as the second largest supplier of new vehicles to the UK automotive market.

Summary of Vauxhall “must have’s” in a future air quality plan

  1. Consideration should be given to:

 

  1. Clean air zones should be based on Euro standards to provide certainty for customers.
  2. Any scrappage scheme should be technology neutral and incentivise the uptake of Euro 6 vehicles in addition to electric vehicles.
  3. The focus of any scrappage scheme should be to target the oldest vehicles in the car parc and not look to penalise new vehicle buyers which would slow down fleet renewal.
  4. HM Treasury should conduct a full review of vehicle taxation (BiK and VED) in light of the WLTP and RDE changes.
  5. Identify any actions that can be taken to tackle the oldest, pre-Euro 6 diesel vehicles in the short term, considering that in the medium to long term pre-Euro 6 fleets will be renewed to the latest, most efficient vehicles, solving a majority of the old diesel parc.
  6. Ensure any cost/tax burden is spread over the widest possible population to achieve small individual cost whilst generating significant revenue.
  7. Start to consider the medium to long term solutions and the technological developments needed to improve air quality. While we will continue to explore ways to improve engine efficiency, developments such as the ability to recognise when a vehicle enters a road priced area will be required to administer a long term solution such as road pricing. Certainty and clarity in advance of implementation is vital.
  8. Consider non-fiscal measures such as improving traffic management to reduce congestion and increase traffic flow by reducing the stop-start nature of traffic. Investment in roads and their design will increase capacity and also improve traffic flow.

 

The challenge

 

  1. The main challenge from an air quality perspective is the average age of the vehicle parc. Older, less efficient vehicles are having the biggest adverse impact on air quality. In 2015, new cars only represented c.8% of the 33.5 million cars in use. It is also a concern that the average age of the car in use has increased in recent years, from 6.8 years to 7.8 years which will be to the detriment of the environmental profile of the fleet. Fleet renewal will deliver air quality improvements in the shortest possible time. 

 

  1. This challenge highlights the care that should be taken if government is to pursue a scrappage scheme. As noted in the consultation the scheme would have to be targeted at those most in need of support and be limited in scope. This would lend itself to a scrappage scheme on Euro 1, 2 and 3 cars for both petrol and diesel in order to remove the most polluting vehicles off of our roads. The objectives of any scrappage scheme should be clearly stated, measurable and properly costed. The improvements made in Euro 6 engines should be recognised when incentivising a customer to trade in their old vehicle to purchase a new vehicle and not just looking to move everyone into electric vehicles. Any scrappage scheme should be limited to new vehicle sales. Used vehicles should not be considered as there is not such a robust audit trail outside the Original Equipment Manufacturer (OEM)/Franchise dealer process, raising the potential for fraudulent activities.

 

  1. Diesel remains the preferred fuel for light commercial vehicles (LCV’s) and will continue to for the foreseeable future. Euro 6 diesel LCV’s are the most affordable, cleanest and efficient method of transport for many large companies and independent tradesman to use for day to day work. Given the nature, miles travelled to jobs and the cargo being carried diesel rightfully plays a vital role in ensuring LCV’s have as minimal impact on air quality as possible.  

A short term solution

  1. An immediate, short term step that can be taken by government is to tax fuel at the pump, an Air Quality Subsidy. Given that air quality is a short term problem, with only one clean air zone forecast in 2025, an Air Quality Subsidy scheme is a good solution to tackle the immediate problem head on.

 

  1. The advantages this approach would provide are as follows:
  1. Focuses on the short term air quality challenge, which is older vehicles.
  2. Equally spreads the cost over all drivers, rather than a solution which would disproportionately affect low income earners.
  3. Taxing at the pump helps link the cost to the usage of the vehicle. Supporting the polluter pays principle.
  4. There would be no impact on the price of purchasing a new vehicle, preventing any adverse effect on fleet renewal and encouraging the take up of Euro 6 vehicles.
  5. The scheme would be easy to administer.
  6. The additional revenue raised could be used to fund a scrappage scheme or incentivise the uptake of low emission vehicles.
  7. This approach is technology neutral preventing distortive effects on the vehicle market.

 

  1. For this approach to work, thought and care needs to be given to how this scheme would be communicated to the public. A clear explanation of the reason for this, along with its desired outcome will help to ensure this is not approached with hostility. 

Long term solutions

  1. Despite the fact that the following are considered long term solutions, in order for them to be effective, provide certainty and be suitably implemented these need consideration now.

 

  1. The first solution is to implement road pricing. As the document highlights, over forty roads are projected to remain in breach of air quality limits for some years ahead. Road pricing is one action that could be taken to directly address these roads.

 

  1. The advantages this approach would provide are as follows:

 

  1. A localised solution for a localised area, targeting the worst roads.
  2. The polluter pays, vehicles driving in the most polluted areas have to pay for the privilege of doing so.
  3. Automotive companies are making the technological advancements in vehicles through systems such as eCall to allow every vehicle, if required to be located. This would provide the technology to administer this solution. Time would still be needed to create/mandate technology to ensure every vehicle can be recognised when travelling down certain roads or into particular areas.
  4. Avoids the introduction of toll roads which are expensive to erect, administer and through stopping and restarting traffic not solve the problem. Road pricing can retrospectively charge a consumer for travelling on the most polluting roads.
  5. This will encourage the public to travel an alternative route or use another form of transportation to reach their destination, avoiding the most polluted areas.

 

  1. Funds raised from road pricing would subsequently be used in the areas where the revenue was raised. The money could be used, for example to repair roads, create or enhance electric vehicle infrastructure, implement electric vehicle only lanes, create platooning infrastructure etc.

 

  1. A second solution is to look at the taxation measures applied to vehicles, namely vehicle excise duty (VED) and company car tax (CCT). A long term measure out to 2040 is required with key review dates along the way. The key review dates are a chance to evaluate the progress made on the fleet of vehicles on UK roads and alter the taxation appropriately to reflect the vehicles being purchased and driven. Even today, more VED bandings are required as they do not incentivise the uptake of low emission vehicles. A review of vehicle taxation will be required shortly to reflect the move from NEDC to WLTP, consideration should also be given to reviewing the current bandings and future strategy of such revenue tools.

 

  1. A future proof taxation scheme should take into consideration trends in the industry such as the potential move in consumer preferences, for example, from ownership to usage. As the automotive industry looks to develop and implement ridesharing schemes and connected and autonomous vehicles in the coming years, vehicle taxation will need to be adapted accordingly. Road pricing can play a critical role in order to tax a vehicle/customer based on usage rather than taxing a vehicle at the point of purchase.

Technology Neutral

  1. It is important to recognise that increased uptake of hybrid vehicles, plug-in hybrid vehicles, electric vehicles and fuel cell vehicles is critical to achieve objectives on CO2 and air quality; however the latest Euro 6 internal combustion engine (both petrol and diesel) will continue to be the most widely available technology in the near term and positively contribute to CO2 reduction and air quality improvements.

Vehicle testing

  1. Where Euro standards have come under criticism in the past, the new WLTP and RDE tests will ensure much greater transparency and help renew consumers’ trust in the automotive industry. This will be achieved by correlating results attained in the laboratory (WLTP) with those in real world driving conditions (RDE).

 

 

 

Devolution

  1. Whilst it is well understood and acknowledged by government that air quality is a localised issue, central government needs to take a leading role in laying the framework of the UK’s national air quality plan. If this were not to happen there is a risk a patchwork of differing entry requirements are created depending on the local area. This will only add to consumers confusion of whether or not they will be charged, and how much, when entering a city.   

 

  1. With the devolution of clean air zones to the local authorities it is vital government provide national guidance. To ensure consistency between local authorities and avoid a patchwork of varying standards across the country, criteria should be developed nationally and based on whole vehicle standards. This is not only important for customers driving between different zones but can also aid purchasing decisions. Government should ensure that the clean air zone framework is effective in aligning emission standards to ensure certainty and simplicity for consumers, businesses and other vehicle users when driving between cities. Different criteria in different clean air zones will raise questions as to why measures vary and why an individual vehicle may not be charged in one clean air zone however subject to an additional change in another.

 

  1. It is important that industry and consumers are given the maximum time possible to adapt and plan for the introduction of Clean Air Zones.

 

November 2017