POLICY CO-ORDINATION COMMITTEE
MEETING PAPERS – TUESDAY 10 DECEMBER 2013
Contents Page Agenda 2
Minutes from October 2013 meeting 3 (PCC-M-10-13)
Political programme (Reshuffle and key political 8 engagements) (PCC-12-2013-P1)
Economic issues (Autumn Statement, Automotive Sector 16 Strategy, skills update, trade policy update, Europe update) (PCC-12-2013-P2)
Environment and low-carbon vehicles (ULCV update, 30 London ULEZ update, Diesel Fuel Filter Blocking update. To note: CO2 update, Marketing Best Practice Principles) (PCC-12-2013-P3)
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POLICY CO-ORDINATION COMMITTEE
CONFIDENTIAL
A meeting will be held on Tuesday 10 December 2013 at 14.00 at SMMT, 71 Great Peter Street.
DRAFT AGENDA
Paper Start time Welcome, competition compliance statement, minutes and actions 14.00 of previous meeting of October 2013 (Chair) (PCC-M-10-13) PCC-M-10-13 (5 mins) To agree: SMMT compliance statement Apologies Minutes of the previous meeting
SMMT Political Programme (Konstanze Scharring, Jennifer Pheasey, PCC-12-2013- 14.05 Jonathan Hawkings) P1 (30 mins) To receive updates and discuss: Government and Labour reshuffle Key political engagements (incl. APMG, Brussels engagement)
Economic issues (Konstanze Scharring, Jennifer Pheasey, Jonathan PCC-12-2013- 14.35 Hawkings, Robert Baker) P2 (75 mins) To receive updates and discuss: Autumn Statement – Update Automotive sector strategy – Update and discussion Skills update (incl. Trailblazers, IP bid, See Inside Manufacturing) Trade policy & FTAs – Update
**John Leech from KPMG to join the discussion** SMMT-KPMG Europe Report – discussion on project on UK automotive and the EU debate
Environment & low carbon vehicles (Konstanze Scharring, Jennifer PCC-12-2013- 15:50 Pheasey, Ian Bacon, Jonathan Hawkings) P3 (35 mins) To receive updates on and discuss: ULCV update - OLEV communications project & OLEV call for evidence London ULEZ – Update Diesel fuel filter blocking – Update To note: CO2 update, Marketing Best Practice Principles
AOB – items to be advised prior to the meeting 16:25 (5 mins)
2014 PCC dates (all 10:00am to 12:30pm at SMMT, 71 Great Peter Street) Tuesday 25 February Tuesday 6 May Tuesday 8 July Tuesday 9 September Tuesday 11 November
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POLICY CO-ORDINATION COMMITTEE
CONFIDENTIAL
Minutes of the meeting held on Thursday 3 October 2013 at 14:00 at SMMT Ltd, 71 Great Peter Street, London, SW1P 2BN
DRAFT MINUTES
PRESENT 11. Franziska Rothe, VW Group 1. Luke Herbert, Jaguar Land Rover (Chair) 12. Mike Hawes, SMMT 2. Sophie Ogunbiyi, Toyota Motor Europe 13. Konstanze Scharring, SMMT 3. Robin Shaw, Bosch 14. Jennifer Pheasey, SMMT 4. Sally Hepton, Bentley Motors 15. Rob Walker, SMMT 5. Tanya Sinclair, Nissan 16. Jonathan Hawkings, SMMT 6. Helen Foord, General Motors 17. Ian Bacon, SMMT 7. Darren Lindsey, Michelin Tyre PLC 18. Robert Baker, SMMT 8. Madeleine Hallward, Ford Motor 19. Josh Harris, SMMT Company 9. Jason Reakes, BMW Group (UK) APOLOGIES 10. Lawrence Bleasdale, TMD 1. David Owen, Rubery Owen Holdings
AGENDA ITEM DETAILS ACTION/ RESPONSIBILTY Welcome, The chairman ((Luke Herbert) opened with a reminder of apologies, the SMMT’s competition compliance policy: minutes of last That the meeting was gathered in accordance with the PCC meeting Terms of Reference (further copies available from the Secretariat if required); Representatives had a responsibility to SMMT and their employers to keep discussions within the PCC Terms of Reference and today’s meeting Agenda;
In no circumstances should the discussion: a) include any consensus discussion of individual corporate strategy, market behaviour or pricing policy; or b) extend to volume or any kind of price data (e.g. price levels, discounts, policies or margins) or customer specific information or other commercial sensitive information such as may enable any participants or their employers to adjust their competitive behaviour; or c) reveal the commercial circumstances or contractual relationship between representatives employer and one of their employers customers or suppliers. That the Chairman, would intervene to halt any discussion that contravened these competition compliance guidelines. The Secretariat had confirmed that all documented information to be discussed at the meeting has been administered through SMMT, for uniform distribution, record and compliance purposes That the meeting minutes would record that these guidance were read out and agreed at the start of the meeting.
The chair noted apologies, and agreed minutes of previous meeting (noted amendment needed to Lawrence Bleasdale’s company name).
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The chair welcomed new attendees to PCC; Robin Shaw, Bosch, Sally Hepton, Bentley Motors and Tanya Sinclair, Nissan.
The chair introduced SMMT Chief Executive Mike Hawes (MH) who gave a brief overview of the positive registration figures due to be published the following day.
SMMT Political Key political engagements Programme Jennifer Pheasey (JP) provided an overview of SMMT’s recent political activity and highlighted the meeting with Michael Fallon, Business Minister and representatives of the AIO at IAA Frankfurt. Jonathan Hawkings (JH) provided detail on SMMT’s recent party conference events and noted that the theme for the events was the implementation of industrial strategy and the need for cross-party support on delivery. Members praised the events and highlighted the strong parliamentarian turnout. Lib Dem MP and SPAD Circulate email asking engagement was seen as an area SMMT should focus on members for detail on in 2014. It was also agreed that at the 2014 Labour event some of the challenges the industry should call on Labour to back their stated support UK immigration system for auto with promises for commitments in their 2015 may have presented to election manifesto. Members noted that at the Lib Dem skills in their business and event Vince Cable, Business Secretary, sought views from future challenges (SMMT) - industry on immigration policy and its impact on skills in the DONE sector and JP noted that she would send a note to members asking for their views. Members stated that the difficulty in this area was more predominantly felt lower down in the supply chain and also raised the issue of the difficulty of getting VISAs for visiting experts who provide businesses with advice. It was agreed that SMMT should continue its approach to conferences in 2013 in 2014.
MH provided members with an overview of the Wright Review, an independent, cross-sector view of supply chains Recirculate the Wright for the Labour Party, led by Mike Wright of JLR, and noted review announcement and that the report would focus on lessons to be learned and evaluate how to engage in that it would be published in Summer 2014. MH also stated the process (SMMT) - that he had been informed that the review’s intention was to DONE provide recommendations that can be applicable cross- party. PCC members agreed that SMMT and SMMT IF Invite Mike Wright to attend would support the review in whichever way it could. It was a future PCC/member also agreed that SMMT would invite Mike Wright to attend round-table to discuss the PCC/member round-table to discuss the review. review and hear member’s views (SMMT) JP highlighted key upcoming meetings with Chuka Umunna, Shadow Business Secretary, and Maria Eagle, Shadow Transport Minister and JH also noted the APMG event on 30 October. Business Secretary, Vince Cable, is due to speak at the event which will focus on business environment issues and Europe and aims to take the discussion forward from party conferences and further cement cross-party support for implementation of the SMMT to consider key asks automotive sector strategy. JP also noted that SMMT would for 30 October APMG be visiting Brussels in the coming months for some political (SMMT) - DONE meetings and highlighted that the European Parliament elections will take place in 2014.
Lobbying bill/ register JH provided an update on the lobbying bill going through the House of Commons and noted that the report stage and second reading was scheduled for 9-11. JH highlighted that following the actions agreed at the July PCC meeting, SMMT had influenced the CBI position to take a more
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proactive stance on transparency but that the views of its members were still mixed regarding the inclusion of in- house lobbyists. Members agreed that SMMT should continue the approach of keeping a watching brief and input to the development of the CBI position.
Economic Issues Industrial/sector strategy KS noted that the focus for industry and SMMT would now Emphasise need for be on implementation of the automotive sector strategy and diverse make up of the development of the Business Environment and Skills BESWG groups (SMMT) - working group (BESWG) under the Automotive Council. DONE This group would be chaired by Nigel Stein, GKN, for at least the first year and the constitution of the scope of the group would soon be decided. There would be four work Inform SMMT of company streams under the group: skills; UK international contacts to be put forward competitiveness; UK domestic support and delivery (LEPs for BESWG work streams etc); and Europe. It was agreed by PCC that SMMT should (Members) push for the make-up of these groups to be diverse and include both senior industry executives and government affairs representatives. Jennifer Pheasey (JP) detailed the Identify early wins for Industrial Partnership bid under EOP and noted that this BESWG (SMMT) would be a framework to address long-term skills challenges from ‘cradle to grave’.
UK - Europe KS stated that SMMT would commission a piece of economic research that would aim to illustrate that the UK automotive sector was fully anchored in the European market. Members agreed that this would be a useful piece of research to conduct. Members discussed that this research should focus on: economic facts; the ‘what if?’ scenario of the UK being outside of the EU; the power of the EU as a trade bloc; and the regulatory and global nature of the industry. It was also highlighted that this research would need to focus on the whole sector (including SMEs) and not just the VMs.
Autumn Statement KS highlighted that the Autumn Statement would likely take place in December and that SMMT’s Autumn Statement letter would focus on key asks on delivery of the industrial strategy. Members stated that key asks to be included in the letter should be on: cross-governmental buy-in of the strategy; support for skills; technology funding and R&D tax credits; support for OLEV; and support on business rates. Specifically members agreed that the letter should ask for a HMT consultation on whether business rates for large-scale manufacturing were competitive and were hindering growth. It was agreed that as a short-term measure SMMT should support the CBI proposed 2% cap on business rates. Members discussed the cost of energy and how this was SMMT circulate draft disadvantaging the UK over Europe. It was noted that this Autumn Statement would not be a suitable ask for the Autumn Statement, but submission with members that the issue would be covered by the BESWG agenda. to be given a week to KS stated that SMMT would circulate a draft Autumn respond (SMMT & Statement Submission to members for comment. Members) - DONE
Trade policy and FTAs JH discussed the Transatlantic Trade and Investment Partnership (TTIP) and highlighted that talks were launched on 17 June and that the second round of negotiations were due in the week commencing 7 October in Brussels. JH noted that SMMT and members had met with BIS TTIP Unit officials on 12 September. SMMT would now be developing
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a narrative on UK low volume manufacturers and would also be participating in a BIS core stakeholder group on TTIP. JH highlighted that ACEA and US counterparts would be exploring options for a methodology to determine ‘recognition of equivalence’ of regulations. Members asked SMMT to keep up the pressure on and ambitions for a comprehensive deal on automotive TTIP. JH referenced that BIS had commissioned an economic analysis on a Japan FTA and that Ian Parsons at BIS ([email protected]) would be the contact for this if members were interested.
Business Rates Inform SMMT on whether Robert Baker (RB) provided an update on business rates. companies are willing to SMMT would seek information from companies that had not share own site valuation yet responded on whether they would be willing to share information (Members) information on their sites valuation. SMMT understood commercial concerns companies may have on whether this could incur a redistribution rather than cost-down for all. RB highlighted that the VOA had asked for more robust data that automotive sites are unique and noted that there would be a 4 October VOA meeting of technicians to put down the Pursue a two-pronged ground rules for debating the calculations in 2015. In approach on business discussion the changing political climate on business rates rates, focusing on both the was also noted, following increased awareness and action VOA and political routes from other manufacturing sectors. It was agreed that SMMT (SMMT) should pursue a two-pronged approach, focusing on both the VOA and political routes. Members agreed to support the CBI’s proposal for a 2% cap on business rates as a stop-gap measure.
Regional aid maps JP highlighted the BIS regional aid maps consultation which had now closed. The UK assisted area map would be changing as the percentage of UK population coverage for assisted areas was increasing from 23.9% to 27%. The first stage of Consultation on the 2014-2020 Assisted Areas would be a proposal for common principles for drawing the map, which would also seek out local intelligence on areas of economic opportunity and need from bodies such as LEPs. JP noted that the implementation date for the maps would be 1 July 2014, which is when new state aid rules would apply.
Environment & CO2 update low carbon Rob Walker (RW) noted that new car and van CO2 would vehicles be on the COREPER agenda on 4 October and that Germany had tabled a ’phase-in’ proposal. The plenary vote was scheduled in the European parliament for 14 January. RW stated that SMMT would be liaising closely with ACEA, VOA and UK government on CO2 and also highlighted that it was expected that as soon as this legislation had been finalised, discussions would start on post-2020 proposals.
ULCV update JH detailed the OLEV strategy, published on 4 September and highlighted that a call for evidence would be published soon and run for six weeks. JH stated that SMMT would draw together an industry response and host workshops in November to focus the discussion. SMMT would welcome member feedback on what companies were individually looking for from OLEV. KS noted that SMMT would likely advocate a balanced approach as to how the £500 million
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funding for 2015-2020 should be spent.
JH informed members that government had confirmed that it would co-fund the UCCC project and therefore the project would move to phase two. SMMT would administer the finance for the scheme. Sam Larner was the SMMT project lead on this project.
JH provided an update on TfL engagement on ULEZ. Organise a member SMMT and members met with TfL on 19 September to feed teleconference on ULEZ into initial feasibility work on ULEZ. JH stated that SMMT (SMMT) would finalise a principles paper in the coming weeks and would also set up another teleconference for members on the issue.
Air quality RW informed members that SMMT had produced four papers on air quality, covering: setting the scene; Euro Standards; Real World vs test cycle performance; and WLTP. The SMMT EPC Committee has proposed the following process on the issue: set out risks; document industry response to risks, working with SMMT communications; and look at policy options regulators would be putting together to address the risks.
Diesel fuel filter blocking Ian Bacon (IB) provided an overview of the issue of diesel Respond to SMMT letter on fuel filter blocking and noted the belief that the key cause diesel fuel filter blocking was biofuel content blended in particular refineries. It was (Members) - DONE noted that Car Section had provided SMMT with the mandate to pursue the issue with fuel providers. SMMT had sent a letter to member companies asking for their input Respond to updated and was awaiting responses. marketing Best Practice Principles by 4 October ASA/real MPG and marketing Best Practice Principles (Members) - DONE JP provided a short update on ASA/real PMG and noted that the marketing Best Practice Principles were being updated with the deadline for comment of 4 October.
AOB PCC Send note to members KS noted that the next PCC would be moved to 2:00pm on advising of the change of 10 December and would follow VIPER. date for PCC (SMMT) - DONE
Date of next meeting: Tuesday 10 December (2:00-4:30)
Contact: Josh Harris Policy Officer [email protected] 020 7344 1614
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PCC-12-2013-P1 SMMT POLITICAL ENGAGEMENT
To receive updates and discuss:
Government and Labour reshuffle Key political engagement (incl. APMG, Brussels engagement)
SMMT BRIEFING ON GOVERMENT AND OPPOSITION RESHUFFLE 10 OCTOBER 2013
Background On Monday 7 October 2013, the government and opposition both reshuffled their frontbench teams.
Below is an overview of the government reshuffle and a summary of the responsibilities for key new Ministers for the automotive sector.
Government
Reshuffle changes in full
Job In Out
Secretary of State Lib Dem Alistair Lib Dem Michael Moore for Scotland Carmichael (leaves government)
Financial Secretary Conservative Sajid Conservative Greg Clark to the Treasury Javid (moves to Cabinet Office)
Economic Secretary Conservative Conservative Sajid Javid to the Treasury Nicky Morgan (promoted within department)
Home Office Lib Dem Norman Lib Dem Jeremy Browne Minister Baker (leaves government)
Work and Pensions Conservative Conservative Mark Hoban Minister Esther McVey (leaves government)
Junior Work and Conservative Mike Conservative Esther McVey Pensions Minister Penning (promoted within department)
Communities Conservative Kris Conservative Mark Prisk Minister Hopkins (leaves government)
Transport Minister Conservative Lib Dem Norman Baker Robert Goodwill (moves to Home Office)
Transport Minister Lib Dem Baroness Conservative Simon Burns Kramer (leaves government)
Foreign Office Conservative Conservative Alistair Burt Minister Hugh Robertson (leaves government)
Cabinet Office Conservative Greg Conservative Chloe Smith
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Reshuffle changes in full
Job In Out
Minister Clark (leaves government)
Junior Justice Conservative Conservative Helen Grant Minister Shailesh Vara (moves to culture, media and sport)
Conservative Hugh Robertson (moves to Junior Sports Helen Grant Foreign Office) Minister
Deputy Chief Whip Conservative Greg Conservative John Randall Hands (leaves government)
Northern Ireland Conservative Conservative Mike Penning minister Andrew Robathan (promoted)
Lib Dem Chief Whip Don Foster Alistair Carmichael (promoted to cabinet)
Fisheries Minister Conservative Conservative Richard George Eustice Benyon (leaves government)
Junior Defence Conservative Conservative Andrew Minister Anna Soubry Robathan (moves to Northern Ireland office)
Junior Health Conservative Jane Conservative Anna Soubry Minister Ellison
Key new minsters
Baroness Kramer (Lib Dem) – Minister of State for Transport
The minister is responsible for: future transport (including ULEV) trams) natural environment (including HS2 – Phase Two biofuels) rail – funding and futures (including cities and urban renewal (including RIS, SOFA, ORR, stations policy) growth deals and Heseltine Review) accessibility and equalities localism and devolution SMEs local connectivity (including smart International ticketing, buses, taxis, light rail and
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Robert Goodwill MP (Con) - Parliamentary Under Secretary of State for Transport
The minister is responsible for: strategic roads and Highways Agency cycling motoring agencies Europe road safety and standards aviation freight and logistics – including lorry HS2 Phase One road user charging local roads
Nicky Morgan MP (Con) – Economic Secretary to the Treasury
The minister is responsible for: taxation of transport, North Sea oil, Equitable Life and the Government gas and shipping Actuary’s Department climate change and energy issues The Royal Mint, Crown Estate and excise duties and gambling, including Departmental Minister for HM excise fraud and law enforcement Treasury Group retail financial services, including tax credits and child poverty, and consumer finance and financial advice assisting the Chief Secretary on and capability welfare reform and public service banking support, including pensions responsibility for the Asset Protection charities, the voluntary sector and gift Scheme and other schemes and UK aid Financial Investments personal savings and pensions policy,
To note: Matthew Hancock MP has been promoted from Parliamentary Under Secretary of State for Skills and Enterprise to Minister of State for Skills and Enterprise, a jointly held role between BIS and DfE.
Key new shadow Ministers
Mary Creagh MP – Richard Burden MP – Shadow Secretary of State for Transport Shadow Transport Minister (same brief as Robert Goodwill MP)
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2013 – KEY POLICY DATES (UPDATED 28 NOVEMBER)
Month Key event/activity/opportunity January 7 January – Meeting with Ravi Gurumurthy (DECC)
17 January – Philip Rutnam and Richard Bruce meeting
22 January – Iain Wright MP meeting
22 January – Meeting with Katja Hall, Policy Director, CBI
24 January – Industrial strategy webinar
29 January – Public Health Responsibility Deal Partners Forum with Dan Poulter MP (Parliamentary-Under Secretary of State – DoH)
29 January – House of Lords Semta/National Apprenticeship Service event with Matthew Hancock MP (Skills Minister)
31 January – Conservative Business Relations Skills Seminar with Matthew Hancock MP (Skills Minister)
31 January – Paula Crofts, Director, BIS automotive unit at SMMT Executive meeting
February 4 February – Energy Efficiency Mission Launch with Gregory Barker MP (Minister of State – DECC)
4 February – H2 Mobility report launch with Michael Fallon MP (Business Minister)
5 February – Listening to Industry Event with Stephen Hammond MP (Parliamentary- Under Secretary of State - DfT)
7 – 8 February – IMECHE skills conference
13 February – Conservative MP dinner
20 February – Automotive Council – Formal meeting
28 February – Manufacturing Summit
March 11-15 March – National Apprenticeship Week
11 March – SMMT/Semta National Apprenticeship Week Seminar and Reception with Rt Hon Vince Cable, Business Seceratry
13 March – Skills webinar
13 March – SMMT-GLA/TfL meeting
14 March – BIS FTA business stakeholder consultation event
14 March – CO2 Report Launch
15 March – ACEA Liaison Committee (Brussels)
20 March – APMG breakfast
20 March – Budget 2013
21 March – Open Forum (Heart of England)
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25 March – Meeting with Michael Fallon MP, Business Minister
April 8 April – OLEV ultra-low emission strategy workshop
9 – 11 April – CV Show, including visits from Rt Hon Patrick McLoughlin, Secretary of State for Transport, Rob Flello MP, Chair, All-Party Parliamentary Group on Freight Transport.
14 April – R&D tax webinar
16 April – VIPER
17 April – IPPR breakfast on low carbon vehicle report (tbc)
24 April – SMMT meeting with Martin Jones, UKREP; SMMT meeting with Barbara Bonvissuto, Deputy Head of Automotive Unit, DG Enterprise, European Commission.
24 April – Brussels Conservative MEP dinner
25 April – SMMT meeting with Martin Callanan MEP; SMMT meeting with Fiona Hall MEP; SMMT meeting with Julie Girling MEP.
29 April – Meeting with Patrick McLoughlin MP, Secretary of State for Transport
30 April – SMMT meeting with BIS Trade Policy Unit
30 April – CBI Global Role project breakfast
May 2 May – SMMT Test day
8 May – Queen’s Speech
9 May – Automotive Council – Informal meeting
15 May – APMG breakfast on trade and exports
16 May – CBI London breakfast with Deputy Mayor Isabel Dedring
22 May – Manufacturing Alliance CEO breakfast with Michael Fallon MP
23 May – Meet the Buyer (Cranmore Park)
31 May – Meeting with Daniel Calleja, Director-General of Enterprise & Industry, European Commission
June 3 June, SMMT meeting with Michael Hurwitz, Department for Transport
4 – 7 June – EU Green Week
10 June – Ken Clarke US trade roundtable
12 June – Automotive Council – Formal meeting
13 June – SMMT International Automotive Summit
18 June – Trade association council meeting
19 June – Liberal Democrat MP dinner
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21 June – ACEA Liaison Committee (Bratislava)
26 June – Spending Review
July 2 July – Sustainability Report launch
2 July – SMMT Parliamentary Summer Reception (Chuka Umunna MP, Shadow Business Secretary to speak)
9 July – APMG AGM
10 July – SMMT meeting with Robert Goodwill MP, government whip
10 July – Automotive Council: UKTI Hosting the 2nd Auto Supply Chain Event – Goodwood
11 July – LowCVP Annual Conference at IMECHE
11 July – SMMT meeting with Iain Wright MP, Shadow Business Minister
12 July – Sector Strategy launch
15 July – Manufacturing Alliance meeting
17 July – VIPER meeting
August 21 August – CBI roundtable on lobbying bill
28 – 29 August – SMMT meetings with VDA and British Embassy, Berlin
September 4-5 September – Cenex – LCV2013, and launch of OLEV strategy
9 September – CLEPA Board meeting, UK Automotive Council Reception, Frankfurt
11 September – Government/CBI industrial strategy conference TBC
11 September – VIPER
12 September – BIS TTIP meeting with members
14 – 18 September – Liberal Democrat Party Conference (Glasgow)
16 September – SMMT meetings with Norman Baker MP and Julia Poliscanova, Researcher to Fiona Hall MEP
17 September – SMMT Lib Dem party conference breakfast roundtable (Vince Cable MP)
17 September – SMMT meeting with Chris Saunders, SPAD to Nick Clegg
19 September – Open Forum
20 September – ACEA Liaison Committee (Paris)
22 – 26 September – Labour Party Conference (Brighton)
23 September – SMMT Labour party conference breakfast roundtable (Iain Wright MP)
23 September – Meeting with Jeff Masters, adviser to Chuka Umunna MP, Richard Burden MP, APMG Chair, Baroness Wall and Andrew Miller MP, Chair of Science &
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Technology Select Committee
29 September – 2 October – Conservative Party Conference (Manchester)
30 September – SMMT Conservative party conference breakfast roundtable (Stephen Hammond)
30 September – SMMT meetings with Malcolm Harbour MEP and Martin Callanan MEP
October 29 September – 2 October – Conservative Party Conference (Manchester)
1 October – SMMT meetings with Ken Clarke MP and Heather Wheeler MP
3 October – Policy Co-ordination Committee meeting
8 October – Automotive Council – Informal meeting
14 October – German Embassy lunch discussion
17 October – Talent Retention Solution reception, House of Lords
21 October – SMMT speaking at TUC conference - Green growth: no turning back
22 October – CV Forum event, Robert Goodwill, Transport Minister speaking
23 October – Millbrook visit with commercial vehicle manufacturers and TfL
24 October – APMG visit to McLaren
30 October – APMG breakfast on industrial strategy with Rt Hon Vince Cable MP
November 5 November – Meeting with Tim Figures, Counsellor Competitiveness & Markets, UKREP
5 November - Meeting with Erik Jonnaert, DG ACEA
5 November - Meeting with Philippe Jean, DG Enterprise and Industry
5 November – Meeting with Chris Davies MEP
5 November - Meeting with Linda McAvan MEP
7 November – Meeting with Alistair Peoples, Chief Executive, VOSA
11 November – Meeting with Paul Markwick, Chief Executive VCA
12 November – Automotive Council – BES group meeting
13 November – Automotive Council – Formal meeting
13 November – Meeting with Matthew Pencharz, Environment and Political Adviser to the Mayor of London
14 November – TfL Air quality and ULEZ event
20 November – SMMT speaking at Unite Regional Officers briefing
22 November – Vehicle Manufacturers Training Group
26 November – SMMT Executive Committee meeting and Foyer Federation National
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Recognition event lunch
26 November – SMMT Annual Dinner
28 November – Meeting with Sean McGuire, Head of CBI Brussels Office
December 5 December – SMMT workshop on OLEV call for evidence
5 December – Autumn statement
10 December – Policy Coordination Committee meeting
10 December – VIPER
11 December – APMG meeting
11 December – Meeting with Chuka Ummuna MP, Shadow Business Secretary
11 December – Meeting with Nicky Morgan MP, Economic Secretary (jointly with RMI)
13 December – ACEA Liaison Committee (Brussels)
16 December – Digital radio conference and government announcement on commitment to switchover
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PCC-12-2013-P2 ECONOMIC ISSUES
To receive updates and discuss:
Autumn Statement – Update
Automotive Sector Strategy – Update and discussion
Skills update (incl. Trailblazers, IP bid, See Inside Manufacturing)
Trade policy & FTAs – Update SMMT-KPMG Europe Report – discussion on project on UK automotive and the EU debate
SMMT 2013 AUTUMN STATEMENT LETTER
11 November 2013
Rt Hon George Osborne MP Chancellor of the Exchequer HM Treasury Horse Guards Road London SW1A 2HQ
Dear Chancellor,
Autumn Statement – UK automotive sector priorities
The Automotive Sector Strategy establishes government and industry’s shared vision and collaborative approach for delivering a successful and sustainable UK automotive industry. The Strategy, led by the Automotive Council and supported across the sector, is a clear commitment to supporting industrial growth, building on sector strengths and addressing global challenges.
The Strategy’s four focus areas – supply-chain, innovation, skills and business environment – include recommendations which must be embraced across government. With investment commitments to the UK of over £7 billion by automotive companies over the last two years, it is imperative that we maximise the opportunities for UK supply chain companies and ensure the long term competitiveness of the sector to deliver this investment. Hence, there is the need to focus now on delivery and timely implementation of the Sector Strategy and government’s overall industrial strategy agenda.
SMMT and its members call on government to ensure that Autumn Statement announcements align with and reflect the Sector Strategy’s shared ambition for growth, and identify the following industry priorities:
Supply chain growth opportunities – Enhancing supply chain competitiveness and growth is a collective aim and opportunity. Building on the sector’s recent investment and growth announcements, there is a significant opportunity to increase UK sourcing of vehicle components, with an identified potential demand of an additional £3 billion per annum. As the Sector Strategy recommends, the enablers need to be in place to ensure all tiers of the supply chain have the technology, capacity and capability to maximise this opportunity.
Timely implementation on the Sector Strategy’s supply chain recommendations is essential in realising this opportunity. Improving the long-term competitiveness of the supply chain is a strategic intervention, currently subject to an AMSCI round 4 bid being led by SMMT. The success of this bid is crucial to delivering the Sector Strategy’s supply chain growth ambitions. Indeed, we would also ask that government provides long term support for the supply chain by putting AMSCI and RGF on a more permanent footing, and also recognises the importance of simplification of the processes and timeliness in their delivery.
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It is also essential to see the recommendations supported across government, whether on the Sector Strategy’s welcome and important commitment to developing relationships with the banking sector to address finance issues, on skills challenges or on support to leverage investment. The UKTI Automotive Investment Organisation (AIO), launched in early summer is welcome and is already seeking to build global relationships to maximise the supply-chain opportunity and attract inward investment. Whilst the AIO will be initially supported with two years of funding, strong and long-term support by industry and government will be critical to its success.
Skills – Supply chain and wider industry competitiveness is dependent on having a flexible workforce with the skills that companies demand. There is an urgent need for more skills in the industry and the Sector Strategy includes a consensus skills roadmap covering the key challenge areas: basic skills, apprenticeships, graduates (particularly engineering graduates), current workforce skills and the skills requirements for new growth technologies.
The Automotive Council supports the industry's current bid for an Automotive Industrial Partnership under the UKCES Employer Ownership Pilot (EOP) funding stream, which will deliver the skills roadmap and establish a long-term infrastructure for skills delivery across the sector. The Automotive Industrial Partnership bid has attracted significant investment commitment from industry, and we hope that this important package of work will be supported by UKCES. It is an important opportunity and initiative which will take an innovative, transformational and employer-led approach to delivering skills for automotive growth. Many automotive companies were extremely disappointed to have been unsuccessful in their strategic participation bids under the UKCES EOP funding earlier this year. With this disappointment and the increasing demand for the right skills in companies throughout the supply chain, the need for the Industrial Partnership bid to be successful and deliver is compounded.
Technology and innovation – The automotive sector is highly innovative. Investment in innovation and technology supports long term growth in the industry and enables delivery of increasingly challenging environmental, safety, and mobility requirements. It is therefore essential that we create the right environment for increased investment in R&D in the UK and radically enhance the global competiveness of the UK as a leading centre for automotive innovation and industrialisation of emerging technologies.
Through the Automotive Council industry and government have committed to supporting a collaborative R&D environment in the UK. As announced in the Sector Strategy, government and industry will invest around £1 billion over 10 years in a new Advanced Propulsion Centre (APC) to support the development and industrialisation of low carbon technologies made in the UK. This demonstrates the long-term commitment of industry and government to collaboration and prioritisation of strategic automotive technologies. This is also reflected in recent announcements on Technology Strategy Board (TSB) funding for automotive projects and the move to the ‘above-the- line’ R&D tax credit rate, which SMMT strongly welcomed.
To further enhance the UK as a place for global innovation investment, it is important that the APC is established early in 2014 and delivers a suite of successful initial projects. The R&D tax credit should be set at a higher, globally competitive rate. Government funding for automotive technologies, through bodies such as the TSB, the KTNs and catapults/APC, should continue to be scaled up and focused on areas with significant potential. In doing so, government and industry should work together through the Automotive Council to maximise the UK's share of EU R&D funding for automotive technologies.
Business Environment – Following publication of the Sector Strategy, the Automotive Council’s Business Environment and Skills Working Group (BES) is being formally established. Establishing shared priorities for a supportive business environment for UK automotive will be critical to securing the UK as an investment destination and lead supplier and market for premium products and ultra-low carbon technologies. Consideration of the impact that all initiatives and policies have on the UK’s competitiveness must be a priority and understood across government. SMMT calls on HM Treasury and other key departments to engage in the BES workstream to deliver the measures necessary to ensure we have a competitive business environment in the UK.
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The Sector Strategy acknowledges the importance of the European market and the EU as a regulatory and policy influence on the sector, as well as the need for strong automotive input as the EU pursues its strategy on global trade. SMMT supports the UK’s championing of the EU-US TTIP, the need to abolish non-tariff barriers (NTBs) in all trade negotiations and to ensure that the impacts on industry are understood when pursuing an ambitious free trade agenda. Domestically, the need to ensure strong local engagement, such as with LEPs, is also recommended. Further to this action on the business environment, the Strategy also commits government to continue to enhance the competitiveness of the UK tax system.
Two strategic business environment areas for the group to focus on are business rates and business energy taxation. Industry has raised its concerns regarding the current system of business rates valuation of large motor manufacturing sites, which can result in high fixed costs compared to locations across Europe and further afield. Industry seeks a system which better supports the manufacturing sector, and calls on government to address this disadvantage. SMMT supports broader business calls to cap business rates increases at 2% to reduce burdens on business now. However, strategically what is needed is the political will and initiative to address the fundamental rebalancing issue and deliver globally competitive business rates for large UK manufacturing sites.
The impact of high energy costs and uncertainties over future energy supply on UK automotives international competitiveness is a long-standing concern of industry, affecting the supply-chain and highly mobile companies, which could be subject to carbon leakage. This is exacerbated by the complexity of the energy efficiency regimes in the UK, which are a significant issue for our sector – and SMMT reiterates its calls for simplification of regulations and reporting and, in particular, restoration of the general CCA exemption rule in the CRC. We also encourage government to make as much use as possible of existing reporting regimes in meeting forthcoming European and domestic measures on business energy use and abatement measures (e.g. within the Energy Savings Opportunity Scheme). Business energy costs impact on the global competitiveness of UK industry and present a competitiveness challenge to attracting investment, particularly as other European countries offer much greater incentives than the UK to companies which could be subject to carbon leakage.
Ultra-low emission vehicle strategy – Supporting the business environment for automotive includes creating a strong and competitive domestic market that further encourages investment. The UK has ambitions to be a leading developer and market for low carbon vehicles and technologies.
As recognised in the Sector Strategy, a long-term approach with stability and certainty in the motoring tax regimes is important for vehicle makers, consumers and fiscal sustainability. The Strategy’s recommendation for a long-term framework to be developed is welcome; we seek your department’s support on this as well as wider strong engagement from HM Treasury in the Automotive Council.
This ambition is proactively supported by the Office for Low Emission Vehicles (OLEV), and the announcement this summer of £500 million of funding from 2015 - 2020 as part of government’s ultra-low emission vehicle (ULEV) strategy is a very welcome long-term approach, which is essential to achieve a strong and developed market. SMMT has worked closely with OLEV on the development of this strategy and looks forward to contributing to the consultation on future government funding. The sector seeks a balanced approach to supporting low carbon vehicles, infrastructure and R&D, as well as committing funds to a joint consumer campaign to encourage the take up of these vehicles. Measures to support a long-term market for ULEVs have the potential to deliver significant growth for the UK.
Modernisation of UK motoring services/DfT agencies – Whilst the automotive sector has long- welcomed the coalition’s ambitions to transform UK motoring services and agencies (DVLA, VCA and VOSA), industry is concerned that the current process of modernisation has underperformed and resulted in significant disruption and cost to both the automotive industry and consumers. UK motor sales, particularly in the commercial vehicle sector, are still in a state of fragile recovery and any disturbance in this balance has the potential to cause lasting damage that can stall or set the recovery back years. Industry has already communicated to government its concerns on DVLA office closures and process changes, VCA reform and changes to VOSA sites and services. Early resolution of these concerns is of vital importance to the health of the UK automotive industry, as collectively they have
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the potential to cause serious damage to the progress that has been made by industry and government in recent years.
I would be pleased to discuss these priorities with you or ministerial colleagues and officials at a suitable date, and look forward to hearing from you.
Yours sincerely,
Mike Hawes Chief Executive, SMMT
CC: Rt Hon Dr Vince Cable MP, Secretary of State for Business, Innovation and Skills Rt Hon Patrick McLoughlin MP, Secretary of State for Transport Rt Hon Edward Davey MP, Secretary of State for Energy & Climate Change Rt Hon Oliver Letwin MP, Minister for Government Policy, Cabinet Office Sajjid Javid MP, Exchequer Secretary Nicky Morgan MP, Economic Secretary Michael Fallon MP, Minister for Business and Enterprise
INDUSTRIAL STRATEGY UPDATE
Business Environment and Skills Working Group At the October informal Automotive Council meeting, the new Business Environment and Skills (BES) Working Group was approved and Nigel Stein, GKN, confirmed as chairman. The BES group has four key working groups with industry chairs. The four working groups are:
Skills (Lead – Jo Lopes, JLR) UK international competitiveness (Lead – tbc) UK business environment (Lead – Gareth Jones, ebmPapst) Europe (Lead – Andrew McCall, Ford)
The BES Group will meet four times and year and report to the full Automotive Council. It will have its first meeting on Monday 25th November. It will aim to improve the competitiveness of the UK business environment. The secretariat and strategic support will be provided by BIS, SMMT, GKN plus secondees. The membership is yet to be agreed.
Skills - Industrial Partnership bid In March 2013, an outline bid for an automotive Industrial Partnership (IP) was submitted to the UK Commission for Employment and Skills (UKCES) under the Employer Ownership of Skills pilot fund. Through an IP employers have a unique opportunity to create the mechanism to take end-to-end responsibility for addressing the skills needs in their sector.
The impact of the automotive IP will be: Simple and transparent frameworks and processes for the entire sector which represent the consensus view of employers Alignment of strategy and investment leverages more and better outcomes at sector level Ensuring delivery at micro level fits within an overall hierarchy Removes duplication of activity across the industry to provide real value to employers Allows industry level consensus on prioritisation of needs to focus scarce resources Cleans up accountability of all stakeholders Ultimately ensure all activities aligned with delivery of the Automotive Consensus Skills Roadmap
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At the end of July 2013, UKCES invited the automotive industry to develop a full IP bid, for submission in mid-October. UKCES advised that funding up to £30 million was ring-fenced for the automotive and aerospace sectors to bid to establish IPs. The IP, if successful, would have both government funding and also require industry to support through in-kind contributions and funding.
Following the UKCES invitation to submit a full-bid, the Automotive Council were invited (in August 2013) to nominate colleagues to be involved in an Automotive Skills Industrial Partnership Development Workshop. This group wrote and submitted on 18 October a full Automotive Industrial Partnership bid. The Automotive Council endorsed the draft and full bids. In the Sector Strategy it was confirmed that the IP - should a bid be successful - would be well-placed to deliver the draft consensus skills roadmap and the recommendations in the ‘skills’ chapter of the Strategy.
There are two parts to the full bid – infrastructure and participation pilots. The infrastructure element of the bid establishes the structure, processes and governance to deliver the consensus skills roadmap. The participation pilots element establishes test initiatives to deliver on some agreed areas from the consensus skills roadmap – basic skills/traineeships, apprenticeships and people in work. These areas were chosen as being both priority areas but also easily developed in the timeframe available.
Further to submission of the bid, industry will be invited to present to UKCES on the bid and expect to be advised on whether it has been successful in early 2014.
Advanced Propulsion Centre - £75 million for pilot projects On 7 November, government announced £75 million funding for pilot projects under the auspices of the Advanced Propulsion Centre (APC), which was announced in July. The APC will channel £1 billion investment from government and industry to fund the development of new technologies over the next 10 years. The competition to find the pilot projects for the APC will be run by the Technology Strategy Board. To apply for a share of the £75 million APC fund, bidders must form a group which includes at least one vehicle manufacturer, an SME and at least one supply chain company. The competition, which will support a range of powertrain technologies, will open on the 2nd December 2013, with projects expected to begin from April 2014.
Government has also announced funding of £1.5 million for the LUTZ project that will test driverless cars in a pedestrianised area for the first time. The ‘pods’ will be able to carry 2 people and will be run on designated pathways in Milton Keynes city centre. It is planned that in 2015, an initial batch of 20 pods will be driver-operated and will run on lanes separated from pedestrians. By mid 2017, 100 pods that are fully autonomous will be running on pathways alongside people and will use sensors to avoid obstacles. The early collaborators on the project are Arup, the Transport Systems Catapult, the Automotive Council, and Cambridge and Oxford Universities.
BIS-CBI Industrial Strategy conference SMMT attended the BIS-CBI Industrial Strategy conference on Wednesday 11 September 2013. Alongside this conference BIS published a written ministerial statement, and an economic analysis of key themes cutting across the sector strategies. These papers bring together insights from the analysis underpinning the sector strategies using the four themes of the conference – Exports, Innovation, Skills and Supply Chains. The key announcements focused on:
Round 2 of the Employer Ownership Pilot - Government wants to give employers more direct control of how public funding for vocational skills is spent and are testing this through the Employer Ownership Pilot. Round 1 of the programme is funding 36 projects with £102m of Government funding matched by £108m of private investment. Under Round 2 of the project, 39 bids have progressed to the next phase and we will be announcing the first wave of these bids.
Round 3 of the Advanced Manufacturing Supply Chain Initiative - the initiative was first established in December 2011 to help existing UK supply chains grow and achieve world class standards, while encouraging major new suppliers to come and manufacture here in Britain. The Autumn Statement 2012 provided an additional £120 million for two additional funding rounds of AMSCI – Rounds 3 and 4 – taking the total government contribution to this scheme to up to £245 million. Subject to due diligence five supply chain projects from the
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aerospace, chemicals, electronics and life sciences sectors will be receiving over £115 million of joint public and private sector investment and we expect their projects to create and safeguard over 1,500 jobs.
£150 million investment in Green Construction projects - £60 million is being invested through the Technology Strategy Board to support the UK construction industry in designing and developing more energy efficient buildings. Government expects the projects to attract an additional £60 million of industry investment and £30 million extra funding from across Government. The construction industry contributes almost £90 billion to the UK economy and supports around 3 million jobs.
The See Inside Manufacturing programme will be expanded from three to ten sectors, with seven new industries joining automotive, aerospace, and food & drink. The seven new sectors include construction, offshore wind and the life sciences. See Inside Manufacturing enables young people and teachers to get behind the scenes of the manufacturing industry and see first hand the opportunities available.
Alongside the conference, the CBI published a ‘year-on’ progress report on 11 September 2013.The main message of the report was the need to focus on timely implementation of the strategies and also focus on supply-chain development. Automotive and aerospace are prominent in the report. Ahead of Party Conference, EEF also published a review of progress on industrial strategy. EEF acknowledges progress has been made, and that the government has taken a number of positive steps to encourage investment in new equipment and research and development and to support exporters, however there is only limited progress in creating a more balanced growth.
SKILLS UPDATE – NOVEMBER 2013
Apprenticeship trailblazers project The automotive sector is participating in the apprenticeship trailblazers project, a pilot which aims to implement the recommendations of the Richards Review of Apprenticeships supported by government in its ‘Future of Apprenticeships in England: Implementation Plan”.
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The automotive trailblazer is chaired by Ian Eva, Jaguar Land Rover, with members of the core group meeting weekly. Participating organisations include all the major UK VMs, whether attending all meetings or kept in the loop via email updates, the supply chain (represented by EEF and Semta but with wider engagement planned), and SMMT and SMMT Industry Forum.
The occupation chosen for the automotive trailblazer is “Mechatronics Maintenance Technician”, as this was identified as both an area of critical skills shortages for the sector and was also chosen due to its similarities and linkages with maintenance technicians in other key advanced manufacturing sectors (for example aerospace are developing a trailblazer for a similar occupation).
The group has identified the key workstreams to be developed and sub-groups are developing these areas and reporting back to the full group for discussion and agreement. Core amongst these areas are developing the high-level assessment approach, in line with government’s requirements for an end test and grading, and the establishment of the core competencies for the occupation.
The deadline for the submission of the trailblazer is February 2014 with Ministerial sign off expected in March. The chair, Ian Eva, regularly speaks with the automotive trailblazer relationship manager, Olly Newton (BIS), and is in constant liaison with representatives from the other advanced manufacturing projects.
The key government documents for the trailblazer scheme can be found online here: https://www.gov.uk/government/consultations/future-of-apprenticeships-in-england-richard-review- next-steps
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Government launched trailblazers at an event at BMW’s MINI plant in Oxford. The BIS press release is below:
Department for Business, Innovation and Skills Improved Apprenticeships, which will bring greater focus on quality for the learner and ease of use for employers, will be unveiled by the Prime Minister at MINI Plant Oxford today.Under the reforms, employers will be put in the driving seat to create new Apprenticeship standards that will deliver the skills businesses and learners need to compete in the global race.
Groups of companies, including BMW Group UK, have come together to give industry the power to lead the design of these new Apprenticeships. More than 60 companies who took on more than 13,000 Apprenticeship starts in 2011/12 are involved in these groups, which are known as Trailblazers.
The reformed Apprenticeships will be: employer-led and designed so they respond to the needs of industry, meaning each apprentice has the skills required by the sector focused on quality so the apprentice has to demonstrate their ability through rigorous assessment at the end of their Apprenticeship graded on completion – pass, merit, or distinction – to mark the level of achievement. Prime Minister David Cameron said:
“If you want an apprenticeship, we’re going to make sure you do the best apprenticeship in the world. The reforms we’re announcing today will put employers in the driving seat and ensure that we deliver rigorous training that supports you and our economy for years to come.”
Eight Trailblazers will represent a broad spectrum of businesses from a range of different sectors; aerospace, automotive, digital industries, electro-technical, energy, financial services, food and drink, and life and industrial sciences. Their participation will mean that apprenticeships are firmly driven by those who deliver and use them.
Skills and Enterprise Minister Matthew Hancock said:
“We asked Doug Richard to review the Apprenticeship system and tell us what was needed to make the British system a world leader. Our reforms will do just that and I am pleased to welcome industry leaders as Trailblazers to make the new system a reality.
“Our aim is that the new Apprenticeships will focus squarely on rigorous training for learners and simplicity of use for employers. This will mean that our Apprenticeship system will respond to the needs of the modern economy.”
Being involved in the Trailblazers will give employers and professional bodies the opportunity to develop the new Apprenticeship standards for occupations in their sector. These will become the industry standard for any Apprenticeship in that occupation.
New apprentices can expect to take part in reformed Apprenticeships as early as the end of 2014.
Dr Frank Bachmann, managing director of MINI Plant Oxford said:
“As a major employer of apprentices, BMW Group is supporting this important skills initiative which is designed to develop the first apprenticeship standards across many industrial sectors including automotive. We’re delighted to host and help launch this new Government programme.”
Industrial Partnership/EOP At the end of July, it was confirmed that the sector had been successful in its draft bid to UKCES for an Industrial Partnership (IP) – an infrastructure to address the long-term skills challenges for a sector. The sector was invited to submit a full bid by mid-October. This bid has now been submitted
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with a decision expected in early 2014. To support this process representatives of the bid will present to UKCES on 13 December.
The IP was included in the automotive sector strategy document, with a focus to address/deliver the draft automotive skills roadmap. (see below)
A group, chaired by Jo Lopes, Jaguar LandRover, formed to develop a full bid. Key automotive companies, Semta, SMMT and SMMT Industry Forum were all involved. SMMT support included providing support in facilitating and administering the group before formal structures are established.
UKCES advised they would provide £30 million for aerospace and automotive to bid for – with advice to companies whose EOP participation bids were unsuccessful that this may be a route to access some funds. The automotivel bid focuses on establishing the IP infrastructure with the skills roadmap as the priority focus, and also a number of pilot participation bids to test out some solutions under the priority skills roadmap workstreams.
Draft skills roadmap
For more information, contact Jennifer [email protected]
See Inside Manufacturing (SIM) See Inside Manufacturing (SIM) is a joint initiative between BIS and industry, designed to change outdated perceptions of manufacturing in the UK and build awareness of the careers opportunities available in the sector. Automotive has been involved in the scheme since its inception in 2011.
Key points to note on the 2013 scheme are: Events under See Inside Manufacturing 2013 were held during the month of October The initiative was expanded to include the following sectors: automotive, aerospace, food & drink, life sciences, nuclear, oil and gas, offshore wind, construction, chemicals and electronics The BIS SIM website can be accessed here: http://discuss.bis.gov.uk/seeinsidemanufacturing/
Automotive organisations taking part hosted events such as factory tours, discussions with employees, and competitions, under the SIM banner. In total over 50 days of activities were hosted by the following automotive organisations: Allied Vehicles, BMW, Ford, GKN, JLR, Nissan, McLaren, Michelin, Millbrook, Toyota, Vauxhall.
For more information, contact: Josh Harris [email protected]
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Perkins review of engineering skills The Department for Business, Innovation and Skills has published the Perkins Review of Engineering Skills. Professor Perkins is the Chief Scientific Advisor at BIS.
A key theme of the recommendations is further collaboration between industry and government to promote, raise awareness and facilitate the uptake of engineering careers. This is through recommendations as diverse as instigating campaigns to encourage young people (particularly women) into the engineering careers to reviews of funding for higher education. Key amongst these recommendations are: The engineering community, including all the professional engineering institutions, should join in partnership with Tomorrow’s Engineers, to agree effective core messages about engineering and cooperate to disseminate these messages to young people. Government should provide seed funding to develop nationwide roll-out of the Tomorrow’s Engineers employer engagement programme and help schools and colleges connect with employers. The engineering community should work with government to develop and promote new Level 2 and 3 qualifications that will create high quality vocational routes for 16-19 year olds to enter engineering careers. Government should review funding arrangements for engineering degree courses to ensure that it is financially sustainable for HE institutions to deliver high quality engineering programmes.
In response government is making available nearly £49 million in funding for engineering skills, this will be spent on the following initiatives: up to £30 million in funding in the new year for employers to bid for to address engineering skills shortages in sectors with specific needs an £18 million investment in a new elite training facility at the Manufacturing Technology Centre in Coventry. This is part of the High Value Manufacturing Catapult, which works with companies from start-ups to the likes of Rolls Royce in developing innovation and next generation technology £250,000 of seed funding to enable Tomorrow’s Engineers to accelerate the nationwide rollout of its employer engagement programme aimed at encouraging children in school to consider engineering careers £40,000 to support the Daphne Jackson Trust to develop a new fellowship to support people returning to professional engineering jobs after a career break a portal on the National Careers Service website matching businesses that want to promote engineering careers in schools with organisations who can deliver educational outreach activity.
The press release for the report can be found online here, and the full report can be found attached and online here.
TRADE POLICY UPDATE
Latest status on trade dossiers Transatlantic Trade and Investment Partnership (TTIP) A second round of negotiations on the Transatlantic Trade and Investment Partnership (TTIP) between the US and EU were held at the beginning of November. This round was previously due to take place in October but was postponed due to the US government shutdown. During the latest round of negotiations, the European Commission met with key US government stakeholders to discuss issues concerning the automotive sector, including recognition of equivalence of regulatory systems. The Commission was joined by the Office of the US Trade Representative (USTR), officials from the Department of Commerce, the Department of Transportation and the National Highway Traffic Safety Administration (NHSTA). The European Commission and US officials discussed at very initial stages how recognition of equivalence and associated methodology could be used to overcome barriers. Negotiators also discussed harmonisation of General Technical Regulations (GTRs) and how to improve the international harmonisation process.
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The Commission has indicated that the third round of negotiations scheduled for December will be key in terms of the Commission putting forward more substantial proposals on methodology. ACEA’s US counterpart, the Auto Alliance, will be appointing a consultant to look further at potential methodology for functional equivalence. Initial ideas are expected to be shared by ACEA with the Commission ahead of the third round.
On 14 November, SMMT met with Alex Lau, Senior Policy Adviser in the BIS Transatlantic and International Unit, who has been tasked to lead on issues related to automotive. SMMT provided an overview of the automotive industry position on TTIP and discussed specific issues related to low volume manufacturers, recognition of equivalence, engagement with US regulators and the industry’s export profile to the US.
SMMT participated in a roundtable in the House of Lords by EU Sub-Committee C on External Affairs on 24 October as part of their inquiry and the UK parliamentary scrutiny process of TTIP. SMMT will give formal oral evidence to the Committee as part of an automotive panel (including Jaguar Land Rover, McLaren Automotive and Ford Motor Company) on 12 December.
EU-Japan trade relations Formal negotiations for an EU-Japan FTA were launched on 25 March 2013. A third round of negotiations was held in Brussels between 21 and 25 October, which focussed on each side’s proposals for the text of the future FTA. The European Commission will hold an inter-session meeting with Japanese negotiators in December ahead of a fourth round of negotiations in early 2014. A key focus for discussions between negotiators is progress on the roadmap of NTBs outlined as a result of the scoping exercise before negotiations were opened. Member States have stressed the importance of focussing on the roadmap in the Council’s Trade Policy Committee.
On 17 October, SMMT met with the Commercial Counsellor of Japanese Embassy in London and JETRO, where an assessment of the implementation of the Government of Japan’s cabinet decision in relation to NTBs was presented.
UK government has commissioned an economic study into the effects of NTBs on UK companies to ascertain more detailed priorities. BIS has sent an information request to a range of vehicle manufacturers requesting feedback on how NTBs in Japan are affecting their exports. BIS will also continue to monitor progress on NTBs alongside the official review built into the mandate, which will be triggered a year after negotiations open.
EU-India FTA There has been limited progress in negotiations between the EU and India. There is little progress likely in the coming months due to Indian elections and the appointment of the new European Commission in 2014. Indications from the Commission, however, note that if an agreement on the services package in the FTA is forthcoming, this may provide pressure on closing a deal. Overall, there is little likelihood that the FTA would be concluded this year or next. The automotive industry’s position remains firm on tariff dismantling and regulatory convergence, particularly around the principle of “zero-for-zero” on import duties for vehicles and components. ACEA has assessed the current offer for automotive and concluded that it would lead to an unbalanced agreement with no leverage for further liberalisation on the Indian side.
EU-South Korea FTA implementation There are ongoing issues regarding the application and implementation of the FTA. Key concerns at a European level have been voiced by ACEA and CLEPA to the Commission. The Commission has raised these issues directly with Korean authorities, however little progress has been made. ACEA has identified a list of NTBs that it considers the most significant obstacles, which include: acceptance of UN ECE regulations; evaporative emission standard and Euro 6 On-Board Diagnostics (OBD) for petrol cars; truck tractors; vehicle width; and duplicated certification of fuel economy.
Doha trade facilitation agreement A ministerial WTO meeting is due to be held in Bali, Indonesia from 3 to 6 December to find agreement on a trade facilitation package as a result of no progress in the Doha round of trade talks. It is estimated that a deal on trade facilitation and other measures could potentially amount to half of
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the value of a full Doha agreement. Lord Green, the UK government’s trade minister will act as Vice- Chair of the conference at which political momentum is hoped to persuade a number of countries to clarify implementation plans resulting from an agreement on trade facilitation. The CBI is also attending the conference as part of a UK government-business delegation, alongside the new Director of Trade and International in the Department for Business, Innovation and Skills, Chris Barton.
SMMT activity in Q3 & Q4 2013 SMMT met with Edward Barker, Head of BIS TTIP Unit, 23 July SMMT participated in CLEPA conference call on TTIP, 25 July SMMT participated in ACEA/AAPC/Alliance conference call on TTIP, 5 September SMMT attended CBI member roundtable on TTIP, 10 September SMMT and members met with BIS TTIP Unit officials, 12 September SMMT met with Ken Clarke MP on TTIP, 1 October SMMT met with Japanese London Embassy on EU-Japan FTA, 17 October SMMT met with Special Adviser to Ken Clarke, Kathryn Laing on TTIP, 23 October SMMT participated in House of Lords roundtable on TTIP, 24 October SMMT attended British American Business conference on TTIP, 12 November SMMT meet with Alex Lau, BIS TTIP Unit, 14 November SMMT met with CBI, ESCA, CLEPA in Brussels, 19 November SMMT attended ACEA Trade group in Brussels, 20 November SMMT attended BIS TTIP Core Stakeholder Group meeting, 27 November Ongoing contact with CBI Brussels office, CLEPA and ACEA on trade issues Regular updates in SMMT Policy Report
Member engagement Current requests for member feedback - South Korea FTA implementation issues - BIS Japan NTB analysis and request for information
Key next steps SMMT to attend BIS core stakeholder group meetings on TTIP SMMT to meet with BIS Trade Policy Unit in early 2014 to discuss progress on EU-Japan FTA Further engagement on TTIP with members and BIS Trade Policy Unit Continue monitoring EU/UK activities including ACEA/CLEPA engagement Continue feedback to BIS on South Korea implementation
Contact Jonathan Hawkings Policy Manager [email protected] 020 7344 9217
EUROPE UPDATE – NOVEMBER 2013
CBI report On 4 November, at their annual conference, the CBI published their report ‘Our Global Future: the business vision for a reformed EU’, setting out the need for the UK to stay in the EU but with reform urgently needed. The report followed an in-depth study and surveys, and includes research findings such as that membership of the EU is worth approximately 4-5% of UK Gross Domestic Product every year, or £62-78 billion.
The CBI highlights the following costs of membership: Common rules are essential to the Single Market but the UK’s lack of unilateral control over some regulations is the biggest downside, especially on employment law where the Temporary Agency Workers Directive and Working Time Directive have caused deep frustration The European Commission has a strong tendency to regulate, giving a sense of ‘mission
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creep’, particularly in areas around health and safety, and welfare legislation There is an EU membership fee although net costs are less than often reported – equivalent to £116 per person every year – and it is dwarfed by the benefits of membership.
The CBI argues that the EU must be more outward looking, open and competitive to stay a key player in the international arena. It says: The EU must be open and competitive, building a Single Market fit for the 21st century – that means a genuine Single Market for Services and the creation of a Digital Single Market to reduce barriers to e-commerce, allowing member states to remain responsible for policy where possible The EU must be more outward looking, signing trade deals with large established markets such as the US, along with high growth emerging markets The EU must work for all its member states, so that with an increasingly integrated core, legal safeguards are in place for non-Eurozone countries, as has been achieved in Banking Union negotiations The EU must recognise and respect the boundaries set by member states and look to add ‘value’ not ‘functions’ The EU must improve and streamline how it operates by refocusing Commissioners to key growth portfolios like external trade and the Single Market, rather than 26 different Commission portfolios, each with a separate Commissioner and legislative agenda. The EU must improve the process for assessing new regulations and reduce the cumulative regulatory burden, particularly on SMEs.
The CBI claim, business would like to see: A moratorium on legislation where there is a case for decisions to be made at national level, such as employment law and ‘life-style’ regulation The opt-out from the Working Time Directive made permanent.
The CBI report concludes there is no realistic alternative to EU membership that can combine all the benefits of the UK’s current relationship with none of the costs. Ultimately, all alternative models would leave the UK following market rules decided by others, rather than having a major role in setting the rules. The EU is increasingly having an impact on regulation not just on those who want to trade inside the EU, but at a global level. The report rules out the following options:
Customs union – this model would leave the UK with limited EU market access, a ‘standards- taker’ and with zero influence over trade deals – which means where the EU signs a trade deal, the third party country would have access to our markets but not necessarily vice versa. A customs union is no longer sufficient to give the access UK firms need in a complex global economy. Turkey currently operates with this model on the pathway to full membership, but their agreement does not cover services A bespoke UK-EU trade deal – there would be great uncertainty around the likelihood of a deal on favourable terms to the UK, with the EU having a stronger negotiating hand and unlikely to ‘reward’ an exit. This arrangement would not free the UK from having to comply with EU regulation Going it alone with the World Trade Organisation – this alternative would reduce market access by increased tariffs. There would be greater freedom for the UK to pursue its own trade deals, but it would be unlikely to get as favourable deals as the EU can and there would be a long period of dislocation while any new deals are negotiated Norway and Switzerland options - while the CBI recognises the different arrangements that Norway and Switzerland have with the EU work for them in many respects, they would not work for the UK.
EEF report In September, EEF published their report ‘Manufacturing: Our future in Europe’. Their report was developed through in-depth research, interviews and surveys. In summary they found: Manufacturers see advantages and disadvantages of being in Europe – key advantages are EU market access, investment, skills pool and ease to access multiple markets The EU needs to work better for growth – for example the UK better accessing EU R&D funds The UK must be better at being in Europe and influencing the debate
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Government and EU institutions must take a long-term view on Europe with a long-term economic plan
EU - key dates 1 January 2014 - Greece takes over EU presidency 1 January 2014 – Bulgaria and Romania see EU ‘free movement’ restrictions lifted Spring 2014 – New Commissioner candidates emerge 22 May 2014 – European Parliament and UK local elections Summer 2014 – EP votes in new Commissioners, New Commissioners appointed and new Commission starts 1 July 2014 – New state aid rules enter into force (follows challenging process to agree and restrictions on category C area/large enterprises eligibility 1 July 2014 – Italy takes over EU presidency 18 September 2014 – Scottish Referendum (‘yes to independence’ vote could require Scotland to negotiate and EU relationship) 1 January 2015 – Latvia takes over EU presidency 2015 – New EU Multiannual Finance Framework begins (EU Budget) 2015 – UK general election [BY 2017 – EU in/out referendum if Conservative government elected in 2015]
Jennifer Pheasey Senior Policy Manager [email protected] 020 7344 9221
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PCC-12-2013-P3 ENVIRONMENT & LOW CARBON VEHICLES
To receive updates on and discuss:
ULCV update - OLEV communications project & OLEV call for evidence London ULEZ – Update Diesel fuel filter blocking – Update To note: CO2 update, Marketing Best Practice Principles
LOW CARBON VEHICLE UPDATE NOVEMBER 2013
Government call for evidence on £500 million funding for ultra-low emission vehicles
Background Following the launch of government’s ultra-low emission vehicle (ULEV) strategy ‘Driving the Future Today’ on 4 September 2013, a call for evidence was launched on 7 November which looks to inform government priorities on the £500 million of funding allocated for ULEV uptake and development from 2015 to 2020.
Deputy Prime Minister Nick Clegg announced that alongside the call for evidence, Elon Musk, Co- Founder and CEO of Tesla Motors would be advising the government in a personal capacity on what further could be done to support the uptake of ULEVs in the UK. OLEV has noted that these views will be considered alongside the submissions of others as part of the call for evidence. The call for evidence will close on 10 January 2014.
The call for evidence is split into two sections, the first looking at core elements of government’s current support package and the second on other initiatives that could expand the ULEV market in the UK. The call for evidence also asks what measures beyond the scope of £500 million would be required to make the UK a clear global leader on ULEVs.
Outline of call for evidence questions
1. Core elements of the current support package
Consumer grants for cars and vans o Questions focused on the future of the Plug-In Car and Van Grants including whether the current emission threshold of 75g/km CO2 is appropriate o Consideration of scale of grant support needed for the purchase of hydrogen fuel cell electric vehicles o Consideration of an exit strategy for government consumer incentives o Consideration of support for the second hand ULEV market
Infrastructure o Consideration on where focus should be placed in terms of future charging infrastructure support as well as exit strategies from government support o Consideration of emerging infrastructure technologies and any required incentivisation o Consideration of funding for a national network of hydrogen refuelling stations o Consideration of funding for national network of gas refuelling points for commercial vehicles
R&D o Questions related to how government should channel funding for R&D, through the Technology Strategy Board or otherwise o What support in addition to the Advanced Propulsion Centre would make it more attractive to invest in the UK o Questions around the sufficiency and approach of collaborative R&D support in the UK
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and the need for further trials or demonstration of ULEV technology
2. Other initiatives government could support to expand the ULEV market in the UK
Consideration of new government support for ULEV taxis, private hire vehicles and car clubs Exploration of funding for public sector procurement of ULEVs Consideration of additional support for ULEV supply chain Consideration of an approach for targeting funding to regional or city schemes Exploration of targeting funding to other vehicle segments such as low carbon HGV technologies, L-category vehicles (quadricylces) and low emission buses Consideration of additional support to strengthen the energy grid and promote energy management Consideration of support for communications to communicate benefits of ULEVs
SMMT engagement
SMMT held a conference call with members on 13 November to discuss initial views on the call for evidence, a steer on the policy direction and SMMT’s response drafting process.
OLEV is hosting a workshop on 22 November designed to outline the call for evidence and answer initial questions from stakeholders.
SMMT will host a workshop on the afternoon of 5 December for members to outline SMMT’s first draft response and discuss issues in more detail. Further details of the workshop are due to be circulated shortly.
SMMT will incorporate comments to inform a second draft response during December and submit a final response to OLEV by 10 January 2014.
Ultra-Low Emission Vehicle Collaborative Communications Consortium (UCCC) The UCCC is in phase two of a project that will deliver a national communications campaign running through 2014 to encourage the consideration and uptake up ultra-low emission vehicles. The project is a collaboration between OLEV, SMMT and vehicle manufacturers.
In September, government approved co-funding of a communications campaign with five vehicle manufacturers confirming their participation and financial contribution.
Phase two of the project is progressing following the submission of signed contracts by all participating vehicle manufacturers. This phase will see the finalisation of marketing materials, website content and PR plans for approval by the Consortium. The project will deliver a website for the campaign during the middle of January 2014 with a media launch scheduled for the end of January.
London Ultra-Low Emission Zone SMMT hosted a workshop on 19 September for members to provide views to Transport for London (TfL) on feasibility work being carried out to inform policy options on an Ultra Low Emission Zone in central London by 2020.
SMMT met Matthew Pencharz, Environment and Political Adviser to the Mayor of London on 13 November to discuss the Ultra Low Emission Zone proposals and the likely policy direction of the Mayor. Mr Pencharz stressed the importance of a broad-base of consensus for ULEZ policy, noting that it was the intention to find an appropriate “sweet spot” between reduction in NOx emissions and the costs of ULEZ measures on industry, users and businesses. It was also noted that the Mayor intended to announce in January a date from which it would be required that all new licensed London taxis be “zero-emission capable”.
SMMT attended a workshop hosted by Michèle Dix, Managing Director, Planning, at TfL on 14 November where TfL presented an update on its feasibility work and initial conclusions. It
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was noted by TfL that a good starting point for the basis of criteria across vehicle types was Euro 6. The assessment carried out by TfL indicated that a Euro 6 basis achieved the greatest emissions reductions (NOx) at the most acceptable cost to industry, users and businesses. TfL would look to refine this work ahead of submission to the Mayor in December.
SMMT is due to finalise an initial position paper incorporating member views and priority principles at the end of November to submit to TfL and the Greater London Authority.
The Mayor of London is due to make a final decision on policy options to take forward to consultation in December 2013. It is expected that a public consultation on a range of measures will be launched at the beginning of 2014, with a view to consult again on specific measures in 2015. This timeline is subject to Mayoral approval.
Update on registration figures for ultra-low emission vehicles
Plug-In Car Grant Latest figures on uptake of the Plug-In Car Grant demonstrate that as of 30 September 2013, 5,702 claims have been made since the scheme opened in January 2011. (https://www.gov.uk/government/publications/plug-in-car-grant)
SMMT new car registration figures for electric and alternatively-fuelled vehicles in October 2013 are shown below:
Monthly Electric and Alternatively-Fuelled Vehicle registration figures: http://www.smmt.co.uk/category/news-registration-evs-afvs/
Plug-In Van Grant Latest figures on uptake of the Plug-In Van Grant demonstrate that as of 30 September 2013, 364 claims have been made since the scheme opened since the scheme opened in February 2012. (https://www.gov.uk/government/publications/plug-in-van-grant).
Jonathan Hawkings Policy Manager [email protected] 020 7344 9217
SMMT POSITION ON PROPOSED CENTRAL LONDON ULTRA LOW EMISSION ZONE
28 NOVEMBER 2013
Summary This paper outlines SMMT’s position on the proposals for an Ultra Low Emission Zone (ULEZ) in central London, announced in February 2013 by Mayor Boris Johnson. SMMT welcomes the early engagement with Transport for London (TfL) and the Greater London Authority (GLA) as feasibility work is undertaken on the Mayor’s proposals. This paper underlines principles from the UK automotive industry ahead of the anticipated publication of a consultation following a Mayoral decision in December 2013.
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In summary, SMMT calls on the Mayor’s office and TfL to ensure that the ULEZ:
Stems from a strategic approach to reducing emissions in London and is consistent with the wider regulatory direction of travel on air quality and CO2 Is part of a coordinated approach on air quality between local, national and European authorities Helps promote London as a leading city in Europe for the uptake of ultra-low emission vehicles, resulting in economic benefits for the rest of the UK Takes into account the impact on businesses and vehicle and road users Is clear, transparent, easy to understand and affordable Reflects recognised regulated emission standards and is technology neutral
SMMT position
Recognition of air quality challenges in London SMMT recognises the significant challenges that the Mayor and TfL face in efforts to reduce air pollutants and improve air quality for Londoners. A number of sources impact air quality in London and there is a shared responsibility between different actors, industrial sectors and transport modes to take action in reducing environmental impacts on air quality.
There should be a coordinated approach between London, national and European-level action on air quality to ensure that the automotive sector has certainty in policy direction with measures supporting the global nature of the industry.
TfL should take into account non-road transport sector emissions in its analysis and modelling of an ULEZ. While it is recognised that the highest amount of roadside activity and public exposure to air pollutants occurs in central London. Figures for 2010 show that, in Greater London, 66% of NOx emissions and 44% of PM10 emissions were from non-road transport sources. A wider action plan is required to tackle air quality issues outside the zone and from other sectors such as industrial emissions, domestic gas, aviation and construction.
TfL analysis suggests that some of the biggest sources of NOx emissions in central London are buses and taxis. An incentivised and accelerated fleet renewal of buses and taxis, which are operated or licensed by TfL, would reduce NOx emissions cost effectively in the central London Zone. SMMT supports an approach that identifies achievable and measurable criteria for different vehicle types (i.e. cars, vans, buses, heavy commercial vehicles).
A strategic approach to reducing emissions in London The Mayor and TfL should ensure that policies to reduce emissions in London stem from a strategic approach and identify clear objectives. There have been concerted efforts by both the automotive industry and public authorities at a London, national and European level in reducing emissions from road transport, both in terms of CO2 reduction as well as air pollutants (NOx, PM10 and PM2.5).
ULEZ proposals should be justified, objective and consistent with the wider regulatory approach on air quality and CO2 emission reduction targets.
Where local air quality has been identified as a primary concern, ULEZ vehicle criteria should be appropriate and proportionate. Establishing vehicle criteria that directly reflect widely recognised regulatory standards, such as EuroVI/6, is crucial.
TfL should ensure that ULEZ proposals are coordinated with UK government’s funding for national ultra-low emission vehicle (ULEV) policy from 2015 to 2020. The Office for Low Emission Vehicle’s Call for Evidence looks at key issues which will affect the national framework of support for ULEVs up until 2020, including consumer incentives as well as policy to support UK-based R&D and manufacturing.
Proposals for an ULEZ should be consistent and coordinated with other local transport policies. Where policy measures have been put in place previously to encourage the uptake of ultra-low emission vehicles (i.e. Congestion Charge discounts), new measures should also
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provide a basis for incentivisation while not inhibiting efforts to reduce emissions from the wider vehicle parc. TfL and the GLA should ensure that policy around an ULEZ reflects future plans for the Congestion Charge Zone.
Policy around night-time deliveries and other traffic reducing measures should be taken into account when looking at measures for an ULEZ. TfL and the London boroughs should put in place more permanent arrangements to allow night-time deliveries following the successful trials during the London 2012 Olympics. TfL’s report1 on the transport legacy from the Olympics demonstrated that greater use of night-time deliveries should be possible with the development of noise-reducing technologies and positive results in reducing fuel consumption.
Driver and road user behaviour should be considered when looking at reducing emissions in London. Reducing unnecessary journeys and encouraging more efficient driving will have a large impact and should be factored into ULEZ policy development.
With a proposed timescale of an ULEZ from 2020, it is important to recognise that although there will be an increase in the number of ULEVs on the road, the vast majority of vehicles will remain conventionally fuelled in 2020. The Department for Transport projects that ULEV car sales as a proportion of all new car sales in the UK in 2020 will be between three and seven percent2. ULEZ policy should incorporate this trajectory in its planning and feasibility stage.
Vehicle technology, Euro standards and emissions Debate around the road transport sector’s contribution to air quality in London has focussed on the regulated emissions limits under the Euro standard regime, as well as the identification of diesel emissions as a source of pollutants in London’s vehicle fleet. There has been an increase in the penetration of diesel cars on UK roads in line with a focus on increasing fuel efficiency and reducing carbon emissions. This trend has recently stabilised with 2013 year-to-date new car registrations demonstrating that the UK market share of diesel and petrol cars is identical at 49.3%3. Average UK new car CO2 emissions stood at 133.1g/km in 2012, down 3.6% on 2011 and down 26.5% since 2000. Euro standard success in central London is evident; the London Atmospheric Emission Inventory shows a 45% reduction in NOx emissions by 20204.
The automotive industry in the UK and across Europe has invested billions of pounds in technology to reduce both carbon emissions and other pollutants. The industry has followed regulation through Euro standards which have progressively tightened emission limits over time.
The impact of the regulated emission limits in real world conditions has led to a change in approach with more robust Euro standard development underway. For cars and vans, the emissions test limit values under the Euro standard regime have seen and will continue to see significant reductions to Euro 5 and Euro 6. At each of the Euro standard changes additional tests have been introduced to provide wider robustness to the emission measurement process over wider operating conditions. The future of Euro standards is likely to focus on increasing stringency of the test procedure, its robustness and incorporating real world testing elements. It should also be noted that Euro 6 diesel NOx limits are almost equivalent to petrol vehicles.
The reduction in limit values under the Euro standard regime will see: 96% reduction in diesel PM from Euro 1 (1992) to Euro 6 (2014) 84% reduction in diesel NOx from Euro 3 (2000) to Euro 6 (2014) 60% reduction in petrol NOx from Euro 3 (2000) to Euro 6 (2014)
1 TfL report: London 2012 Transport Legacy One Year On, http://www.tfl.gov.uk/assets/downloads/london-2012-transport- legacy-one-year-on-report.pdf 2 ULEV strategy, ‘Driving the Future Today’, page 99, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/239317/ultra-low-emission-vehicle-strategy.pdf 3 SMMT New Car Registrations, October 2013, http://www.smmt.co.uk/2013/11/new-car-registrations-grow-20-months-smmt- ups-forecast/ 4 London Atmospheric Emissions Inventory, 2010, Table A1 http://data.london.gov.uk/datastore/package/london-atmospheric- emissions-inventory-2010
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The type approval test for Euro standards is designed to be pass/fail, therefore using individual test data for other purposes is inappropriate and not a robust basis for use in ULEZ criteria setting. In relation to this, UK government’s Vehicle Certification Agency (VCA) says that such data “should not be used to directly compare different models of vehicle”5.
TfL should ensure that its proposals are technology neutral and use the basis of the existing Euro standard regime. Consideration of ‘zero emission’ options should be clearly defined and linked to strategic objectives on air quality or CO2 as outlined previously alongside socioeconomic impact.
Opportunity for London to lead on ULEVs and new technology London has been a leading city in Europe on ultra-low emission vehicles, with a focus on electric vehicle infrastructure, public procurement in the Greater London Authority’s fleet and incentivisation of vehicle up-take through discounts to the London Congestion Charge. London is also a stand-out city internationally for hybrid buses and trialling new technology, from hydrogen vehicles to introducing biofuels into the bus fleet.
In looking to create an ULEZ in London, it is important to recognise the economic growth opportunities for the UK in the design, development, manufacture and sale of low and ultra- low carbon vehicles. SMMT believes that the approach through incentivisation and supporting a variety of technologies is the most appropriate way to enable London to become a lead market for ultra-low emission vehicles.
A concerted and parallel focus should be placed on supporting the infrastructure needed to achieve ULEZ policy ambitions. There is also scope for national funding to be linked to ULEV deployment and take up in London. The aspiration to have electric or ‘zero emission-capable’ taxis in London by 2020 should be underpinned by a strategic network of multi-standard charging solutions that will enable the technology to proliferate and be accepted by both drivers and users.
Measuring and monitoring the impact and operation of an ULEZ TfL should follow principles of better regulation, including ensuring that the ULEZ proposals are simple and do not create additional administrative burdens, undertaking impact assessments and cost/benefit analysis. Criteria and operational elements of the ULEZ should be clear, transparent and easy to understand for consumers, users and businesses.
Within this assessment, TfL should consider the social and economic impacts of the proposals. Identifying areas where the most significant challenges lie will help ensure that policy is directed effectively. Implementation of the zone should be monitored on a regular basis.
Acceptance from stakeholders is crucial and TfL should undertake comprehensive consultation with industry and announce plans sufficiently in advance. This is particularly important for fleet renewal and must take into account vehicle production and development cycles.
Affordability should be a key area of consideration in order not to inhibit business prospects or vehicle users. There are a range of low emission vehicles to suit individual needs, however TfL should also ensure that the ULEZ requirements do not place an unduly heavy burden on social groups that are most reliant on their vehicles.
Contact: Jonathan Hawkings Policy Manager [email protected] 020 7344 9217 / 07557 433604
5 VCA, Cars and Air Pollution, http://www.dft.gov.uk/vca/fcb/cars-and-air-pollution.asp
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DIESEL FUEL FILTER BLOCKING UPDATE
Summary Between October 2012 and April 2013, there were a large number of diesel car and van failures as a result of a blocked diesel fuel filter, leaving customers with an under-performing vehicle or, in the worst cases, one that would not start. AA and RAC data indicate 84 and 38 vehicle models respectively were affected, both old and new. Combining the AA and RAC data shows there were ~6400 additional cases between October and April 2012/13 compared to 2011/12. Several manufacturers have indicated an increase in dealer visits/warranty claims for this fault and in some instances repeat visits for the same fault. The cost in most cases has been covered by the manufacturer as goodwill. There has been MP correspondence about the issue. The vast majority of cases were reported in Edinburgh, Glasgow, Essex, Kent and Newcastle, perhaps indicating a localised fuel issue. SMMT informed the British Standards Institution (BSI) committee responsible for fuel quality and BSI appointed SMMT to set up a BSI task force to investigate the issue. SMMT also wrote to BSI’s CEO to encourage a precautionary approach to protect consumers with a robust containment plan. The issue has returned this winter and is monitored weekly as we move to winter grade fuel.
Background The SMMT first became aware of the issue following correspondence with the Down-stream Fuels Association (DFA) asking if any SMMT members had a fuel filter problem during winter 2012/13. SMMT member companies indicated there was an issue and the SMMT Fuels Working Group agreed to raise this formally with the BSI fuel standards group. BSI appointed SMMT to chair a task force to investigate the issue and the task force have agreed to implement an 8D problem solving approach. The group is well supported by experts from SMMT, UKPIA (UK Petroleum Industry Association), DFA and the fuel additives companies.
To date, the investigation has focused on defining the problem and collecting the information needed to establish the root cause. This work is still ongoing, but in parallel there is a need to put in place a containment plan to prevent the same issue occurring this winter. Early indications are that the fuel in the market meets the current fuel specification set out in the BS EN590 standard and that this is not traditional diesel waxing which can occur in cold temperatures. Preliminary results from the vehicle fuel tank samples contained 5-7% biodiesel, with the chemical analysis of the filter indicating a high level of saturated monoglycerides (SMG), pointing to a complex mix of tallow and waste material in the biodiesel.
The SMMT members via the Car Section Committee gave permission for the AA and RAC to provide daily breakdown data to the SMMT to track the issue. This is being fed to the fuels industry to trace the issue back to a terminal. The BSI standards have limited scope, but are being pursued along with providing data to ensure the oil and biofuel blenders resolve the issues as a commercial matter.
Next steps The task force are working on the following tasks in parallel: The next 3 months The next 12 months Continue industry-wide data collection on the Continue investigating to isolate the root source of the fuel prior to the breakdown cause Request a more stringent UK winter diesel Encourage CEN to develop an improved limit if the issue recurs in the market testing method to be included in the standard Ensure the PR and political messages are in Conduct SMMT market fuel survey to gather place and used as appropriate independent evidence of the fuel quality
Consideration for Executive Committee Awareness of the warranty issues and the mitigation actions that can be put in place this winter. Agree an outline approach to take with the BSI committee and wider if the issue reoccurs this winter.
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NEW CAR & VAN CO2 UPDATE
This paper provides an update on the deals struck in trialogue for 2020 car and van CO2, plus a mention of the post-2020 proposal expected from the Commission soon.
Cars An informal trialogue deal was struck on the review of new car CO2 2020 modalities on 2 November. The June trialogue text applies, with the additional points: Phase-in for year 2020, with the 95g/km target applying to 95% of new cars (100% in 2021) Super-credits averaged 2020-22, with a 7.5g/km cap over that period.
The deal was agreed by COREPER on Friday 29 November (member states' permanent representatives, for the Council).
SMMT has maintained regular dialogue with UK government officials and met recently with several key UK MEPs and UKRep (UK Permanent Representation to the EU). UK government is willing to be flexible to deliver agreement at first reading.
Comments from stakeholders: Presidency "On 26 November a provisional [trialogue] agreement was reached on the possible elements of limited additional flexibility that could still be included in the text and ensure the fair and equitable treatment of all manufacturers without compromising the overall balance of the compromise package agreed in June.
The Commission by 2015 will submit a report to the European Parliament and to the Council which should include proposals for amending this Regulation with a view to establishing CO2 emission targets for new passenger cars beyond 2020, including the possible setting of a realistic and achievable target for 2025, based on a comprehensive impact assessment that will consider the continued competitiveness of the car industry and its dependent industries, while maintaining a clear emissions reduction trajectory" www.eu2013.lt/en/news/pressreleases/agreement-on-reduction-of- co2-from-cars-big-step-towards-resource-efficient-europe
EP www.europarl.europa.eu/sides/getDoc.do?pubRef=-%2f%2fEP%2f%2fTEXT%2bIM- PRESS%2b20131126IPR26748%2b0%2bDOC%2bXML%2bV0%2f%2fEN&language=EN
Council www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/envir/139786.pdf
T&E www.transportenvironment.org/press/te-comment-final-cars-co2-trilogue-deal
“CLEPA welcomes the Council agreement on 2020 CO2 limits for cars which offer a clear and stable legal environment for investment, and will help the automotive industry to keep its technological leadership. The retention of super credits and eco-innovation for low emission vehicles will boost the development of breakthrough technologies”. www.clepa.eu/index.php?type=1001&damId=6701&cuid=&file=fileadmin%2Ffiles%2FPRESS%2F201 3_11_29_CLEPA_PR_CO2_limits_for_cars_agreement.pdf
Next steps The EU Parliament may consider the deal at ENVI Committee in December and then vote in plenary session 13 January (which will also vote on the vans deal). Council will finally approve the deal after the 13 January EP Plenary.
SMMT will maintain close contact with ACEA, SMMT members, UK government, and MEPs as appropriate.
Vans The June trialogue deal was approved on 5 November by the EP Environment Committee and, having already had approval from the Council; it now awaits a formal plenary vote in the EP. The text for the ENVI Committee is available at www.europarl.europa.eu/meetdocs/2009_2014/documents/envi/dv/envi20131104_co2_and_vans_/e nvi20131104_co2_and_vans_en.pdf
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Next steps Post-2020: the Commission is expected to present a Communication on the post-2020 regime, but this has been held back to keep it separate from the 2020 modalities review, above. SMMT has begun to discuss with members the basic lines for engagement on post-2020 CO2. Members are asked for their views on what elements they would like to see/not see in the post-2020 regime.
MARKETING BEST PRACTICE PRINCIPLES UPDATE
Background The Best Practice Principles for environmental claims in automotive marketing to consumers are a publication jointly endorsed by LowCVP, ISBA (Incorporated Society of British Advertisers) and SMMT.
The Principles are a reference point for consumers, the automotive industry and its marketers in the sphere of marketing communications for passenger cars and light commercial vehicles (up to 3.5 tonnes). The scope and basis for the principles is outlined clearly on the first page of the principles document.
The first version of the Principles was published in 2010, and an update project undertaken in 2011, with the second version of the Principles being published and relaunched in November 2011.
The 2011 update made changes to reflect the digital (online) remit changes of the Committee on Advertising Practice (CAP) Codes, to clarify comparative test data use, and update the legislative references and hyperlinks/web references.
2013 Principles Update The 2013 update project is a regular update, being led and co-ordinated by SMMT, on behalf of LowCVP and ISBA. The project plan and implementation was undertaken through full consultation with each of the partners and their members.
The following has influenced the updates – a need to: Update the legislative references, hyperlinks, etc Include appropriate terminology and references for plug-in hybrid vehicles Reflect discussions in 2012 with the Advertising Standards Authority (ASA) regarding ‘zero emissions’ claims and subsequent CAP advice Reflect recent ASA adjudications and advice on MPG claims Reflect recent CAP advice on electric vehicles advertising. Have an opportunity to remind audiences about the Principles and use of them
The most significant changes are the following: 3c) It should be clear whether environmental claims apply to the vehicle, to particular components or technologies, to the vehicle manufacturer or phases of the life-cycle e.g. ‘zero emission’ claims should refer to ‘whilst driving’ or similar. 4b) For plug-in hybrid vehicles, the equivalent drive cycle is the weighted combined cycle. It should be clear the weighted combined performance data relies upon both fuel and electricity e.g. MPG and miles/kWh (kilo Watt hours), and that the electricity is mains sourced. 4e) When using MPG figures to make efficiency claims, it should be ensured that they are sufficiently explained, for example by stating ‘MPG figures are official EU test figures for comparative purposes and real driving results may vary’ or similar. 4f) Electric-only-range figures should be sufficiently explained, for example by stating ‘Range figures are official EU test figures for comparative purposes and real driving results may vary’ or similar.
A ‘marked up’ version of the Principles (yet to be laid out by the designer) – showing the changes highlighted in red can be seen attached.
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Launching the new Principles – 3 December The new Principles will be launched on Tuesday 3 December. The launch includes: Press release, social media, etc Webinar – 3 December, 2-3pm, register here: https://www2.gotomeeting.com/register/419704882 Communication of an updated version (PDF) to members
Contact: Jennifer Pheasey Senior Policy Manager [email protected], 020 7344 9221
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