Cable: No car subsidies
July 1st, 2010 by Richard Aucock
VINCE Cable has told the UK automotive industry that it is the ‘hinge’ to economic strength in the country.
But the industry should not expect a continuation of short-term subsidies such as scrappage.
Addressing delegates at the SMMT International Automotive Summit, he said ‘it is becoming clear Government success depends on the automotive industry.’
It employs 800,000 people, he acknowledged, and the car industry accounts for 10 percent of all national exports.
‘Government sees the automotive industry as extremely important. Therefore, how do we back it in an affordable and helpful way?
‘It is important we create a good business environment (for the industry).’
‘Different era’
This will be without Government intervention, though. ‘We are in a different era. The future is not in large scale Government support.’
Unlike other countries, Cable is not looking to offer handouts – ‘we can’t fight in and win a subsidy war (with other countries).’
So where does the £5000 low-carbon grant stand in this? Cable said he heard delegates’ frustration at the uncertainty, but was not in a position to announce whether it will go ahead or not.
‘We are aware of its urgency – and I will relay back to Government we need a fast decision. But I cannot say when that will be.’
It thus still remains unclear what will happen to the flagship programme to incentivise the take-up of ultra low carbon cars through car dealers. The business secretary did not rule it out, though.
Recession caused by ‘imbalance’
Speaking of the economic crisis, Cable said it was caused because there was an economic imbalance – the basic model was wrong.
The nation was too reliant on debt, there was a housing bubble, there was too much international banking and the UK was regionally unbalanced. ‘Our challenge in Government is in trying to rebalance the country.’
The car industry and its employees provide ‘a great example’ of flexibility, he said, which has helped beat the recession. ‘Not enough credit has been given here.’
The industry is also shedding its old heavy-industry image and is becoming closely alighted with the new values of high-technology and ecological awareness that are emerging.
It remains to be seen how Government support for low-carbon technology pans out in the light of this.
Midway through a week of briefings to the UK car industry, the business secretary did reveal a personal side though – and admit a lurking enthusiasm for ‘fast noisy cars’ to delegates. He was on Desert Island Discs a few years ago. His one luxury?
‘A fast Aston Martin – and a road track around the desert island…’
Tags: aid, government, grant, green, SMMT, vince cable