- Motion to Approve
- 8:07 pm
- Moved by
- That the draft Order laid before the House on 16 October be approved.Relevant document: 1st Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
- My Lords, this Order in Council creates regulatory frameworks with the purpose of reducing road transport emissions from new cars and vans in Great Britain and Northern Ireland and supporting the vehicle manufacturing industry in the transition to new zero-emission technologies.The Government’s cost-benefit analysis projects emissions reductions of 411 million tonnes of carbon dioxide out to 2050 as a result of the instrument. The trajectory they set for the transition to new zero-emission cars and vans out to 2030 is strongly supported by industry and is the most ambitious of its kind in any country in the world. It is in such ambition that there is opportunity. Already, over £6 billion has been invested in UK automotive manufacturing from the likes of Tata, BMW and Stellantis. It is a particular pleasure to congratulate Nissan’s Sunderland plant on its success in securing the fully electric Qashqai and Juke models. Beyond manufacturing, there has been a further £6 billion investment in charging infrastructure from the private sector. This demonstrates beyond all doubt that legislation will provide certainty, and that certainty will deliver investment, growth and jobs.As noble Lords know, effective consultation is crucial. The Department for Transport, along with the Scottish Government, the Welsh Government and the Department for Infrastructure in the Northern Ireland Executive, has consulted extensively since the UK Government first committed to bringing forward a zero-emission vehicle mandate in 2021 in support of the commitment for all new cars and vans to be 100% zero emission by 2035. For such an impactful policy, a wide range of views had to be taken into account: global multinationals investing billions in net zero, specialist vehicle manufacturers at the cutting edge of new technology, charge point operators tracking demand to inform investment, and the general public who rely on these vehicles for their day-to-day needs.Industry supports these measures because at every opportunity the Government have sought to engage constructively. This includes not just the UK-based manufacturers—Aston Martin, BMW, Bentley, Ford, Jaguar Land Rover, McLaren, Nissan, Stellantis, Toyota and more—but international manufacturers such as Hyundai, Mazda, Mercedes-Benz, Mitsubishi and Tesla. Across the economy these measures have support. The chief executive of the Society of Motor Manufacturers and Traders called this“the single most important measure to deliver net zero”.The chief executive of the AA has said that the measure will“support investment in ZEVs and associated technologies and industries … and … it will help the UK’s motorists manage the transition”.Such positivity is down to how the Government have listened to industry. The chief executive of the British Vehicle Rental and Leasing Association said that
- 8:15 pm
- My Lords, I declare an interest, as I sit on the Environment and Climate Change Select Committee, which is currently looking at electric vehicles. However, the views here are my own.I am very pleased that the Government have brought forward a ZEV mandate, for all the reasons that the Minister has given. Quite a lot of us were fearful that it might not appear after the Government retreated into the herd when they slipped the phase-out target to 2035. The Government appeared to step back and let the manufacturers take the strain, which is a pity because Governments have a clear role in taking this issue forward.The worry that I had was on the chilling effect of that change of date. There was a particularly poignant moment last week when the Select Committee was undertaking one of its outreach sessions with young people across the country in support of its electric vehicle enquiry. It was great to talk to these young folk. They are incredibly committed to the environment and absolutely get the net-zero thing. We were talking to them about the greater environmental awareness of young people, the pester power that they have with parents, and I asked them whether they were using their pester power to persuade their parents to adopt electric vehicles.It was a bit shattering to hear them say, “There is no point in us trying to influence our parents on this because the Government have just said to them, by slipping the date, ‘Don’t worry, there is no rush. You don’t need to do it now—you can take all the time you like’”. I would like the Minister to understand just how chilling some of these changes of direction are. Even if they have internal logic of their own, the public see them as less commitment by the Government to these issues.It would be great to see the Government active in some other measures to encourage uptake of electric vehicles, as well as introducing the mandate. I am a great believer that bans work—if you have an ultimate date for something not being permissible it concentrates the mind wonderfully—but it would be great if the Government undertook a major campaign of reliable information to counteract the huge amount of misinformation about electric vehicles that is currently out there. The progress that has been made in both the technology and supporting technologies, such as charging, has been so great over the last few years. Any cries of doom and gloom about electric vehicles not being practicable at this stage are really misinformation. I hope the Minister could be persuaded to do more to have reliable information presented to the public, rather than just have it on the government website.
- My Lords, like the noble Baroness, I too am a member of the Environment and Climate Change Committee doing a study of this. Unfortunately, I was unable to benefit from the huge wisdom of young people at the school she attended. Had I been there, I would have mentioned that, since we export over 80% of the cars produced in this country, the mandate for sales in this country and the phase-out date has very little effect on British manufacturers. They have to abide by the rules in their export markets. Meanwhile, 85% of the cars we consume are produced abroad.I want to ask the Minister whether I understand properly how this system will work. Take a year when we are half way through, when the zero-emissions mandate requires any manufacturer’s sales to be at least 50% electric vehicles and no more than 50% combustion engines. Supposing that a manufacturer finds, in the course of a year, that his sales of electric vehicles fall short and the ratio turns out to be 40:60, am I correct that the manufacturer will have to pay a £15,000 fine on all 20 extra vehicles—the difference between 40 and 60—per 100 that are combustion engine? If so, my arithmetic shows that he will effectively have a penalty of £5,000 for every combustion-engine vehicle he has sold. That is a very serious penalty. I do not think people realise quite how serious it is. I am not sure whether the Government have thought through the reaction there would be from motorists if that turns out to be the case, especially as the people who tend to buy combustion-engine vehicles rather than electric vehicles are those who cannot afford expensive vehicles—because electric vehicles tend to be more expensive. They would find themselves paying that fine on usually cheaper, smaller vehicles—to the benefit of the richer purchasers of larger, more expensive, electric vehicles. Am I correct that this is how the system works?The Minister may say that if manufacturers have excess sales of electric vehicles from previous years they can offset those, and can go out and buy permits from other manufacturers that are, perhaps, only selling electric vehicles. Who will be the manufacturers only selling electric vehicles? They will, by and large, be Chinese manufacturers exporting their vehicles to us. A manufacturer producing only electric vehicles and importing them into this country from China will be able to sell its permits on 50% of the vehicles it sells. It can get £15,000 for each of them and enjoy a subsidy equivalent to £7,500 for every vehicle it sells. Whizzo for the Chinese manufacturers—that far exceeds the effect of the 10% tariff they will have to pay on the vehicles. Am I correct too that we have invented a system that could really subsidise the import of Chinese electric vehicles?
- My Lords, I will leave it to the Minister to respond to those points. I am confident that he will be able to satisfy the noble Lord, Lord Lilley, but I cannot resist pointing out that it is a case not of summoning up more sun or wind but of capturing more sun and wind through solar panels and wind energy.
- Sorry, can I explain that to the noble Baroness? I am very grateful to her for giving way. At present, we use 100% of the electricity generated by wind or sun and it still provides less than 60% of the electricity, so if we increased the demand we would have to persuade the sun to shine at night or the wind to blow on calm days to create extra electricity from them now.
- Of course that is not the only option. The other option is to build more solar panels and more wind farms, and I am delighted to see that there is a gradual rolling out of those facilities across the country. The noble Lord is entirely right that as we build more we will use it all, as we should.I have no doubt about the need for this legislation, because the UK transport sector is responsible for the largest share of domestic greenhouse gas production and has seen relatively little reduction in the amount it produces since 1990, in contrast with other sectors. Cars and vans alone create 18% of the UK’s total domestic greenhouse gas emissions. There are also, of course, strong health reasons to support this legislation, because air pollution in particularly densely trafficked areas is a cause of lung and heart disease, and even has links to dementia.So the Government’s recent U-turn on their rhetoric about the date for phasing out the combustion engine was at least confusing and at worst reprehensible, because it has slowed down the transition to zero-emission vehicles and has had a negative impact on manufacturers and their investment. They have told me about their concern. The problem is that the media have obediently repeated that change in rhetoric and it has caused confusion.
- 8:30 pm
- I strongly welcome the principles of this order; it implements the ZEV mandate, with yearly targets for cars and vans which must be zero-emission. This applies only to new vehicles, so it is important to point out that, as a policy, it has a long tail, because there will of course be people buying second-hand, third-hand or fourth-hand vehicles, and those sales will continue for decades.
- The policy introduces—and I admire the Government’s response on this—a series of what I regard as cunning schemes to incentivise manufacturers to produce more ZEVs, by penalising those that fall short. There are plenty of sticks involved in this policy, but where are the carrots? This is a macro mechanism to steer manufacturers in the right direction, and I know that they welcome that, but consumers, many of whom are now confused by government rhetoric, need carrots to encourage them to buy electric vehicles.
- I have some questions. The first is very precise. The van targets are lower than those for cars—70% sales by 2030 as opposed to 80% for cars. I simply ask the Minister why. Light vans have the same technology as cars and often, as a class of vehicle, tend to do more miles than domestic family cars, so their potential contribution to climate change is higher.
- Secondly, members of ChargeUK, the charge point operator industry body, are concerned about the impact of the change in government rhetoric on investment in the charge point sector. Of course, there are also serious constraints on grid capacity in some areas, which is affecting the rollout of charge points. I want to raise with the Minister the disparity between one set of areas and another in the number of charge points per electric vehicle owned. There are some places in Britain where there is one charge point for every three EVs, whereas other areas in Essex, Hertfordshire and Lincolnshire—not every area in those counties but some local authorities—have over 50 electric vehicles per public charge point. That is not practical in the long term. Rural areas are a particular problem; that will not surprise anyone.
- There are some understandable reasons why some types of vehicle are exempt from the schemes the Government are introducing, and I understand in respect of small-volume manufacturers. I also understand why wheelchair-accessible vehicles are exempt, but I will just press the Minister on this issue. This is the kind of exemption that could become a loophole. Do the Government have a good, tight definition of what they mean by wheelchair-accessible vehicles?
- I am glad to see the Government working with the devolved Administrations on this policy in Scotland and Wales, but of course, as the noble Lord pointed out, Northern Ireland cannot have these regulations applying to it and has a separate scheme. What liaison has there been between the Republic of Ireland Government and the UK Government on the way in which the Northern Ireland scheme will operate?
- I shall explain my reasoning. I am concerned in case the scheme that will operate in Northern Ireland would put retailers, sellers and manufacturers of cars in that place at a disadvantage with those selling in the Republic, and I am very concerned that British manufacturers and British auto traders are given the best possible opportunity.