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One in five (18%) of drivers aged 17-24 admit to taking part in video calls while behind the wheel, while almost a third (29%) of all drivers make and take calls on handheld phones, new research from the RAC suggests.

The illegal use of handheld mobile devices has been studied by the RAC since the 2016 Report on Motoring highlighted the issue was at ‘epidemic levels’.

However, this latest data suggests tougher penalties introduced in 2016, have failed to change in behaviour among motorists, particularly younger drivers.

With police resources stretched, four out of five (79%) drivers told the RAC they support the introduction of camera technology to identify illegal mobile phone use in the UK, with the vast majority (52%) strongly in favour of this happening.

RAC road safety spokesperson Simon Williams said: “Our figures highlight what many drivers already know – that the problem of illegal phone use at the wheel has far from disappeared.”

Furthermore, Williams says that the situation is not helped by mobile phone laws. Mobile phone use that doesn’t involve telecommunications, such as checking text messages, recording a video or changing pre-downloaded music, is not covered by the legislation, although drivers could be convicted for not being in proper control of their vehicles.

He added: “It’s significant that motorists are united in their desire to see camera-based technology, like that already in use in other countries, introduced on our roads to catch drivers who risk everyone’s safety by breaking the law in this way.

“If the behaviour of those who continue to think it’s safe to use a handheld phone while driving upwards of a tonne of metal is ever going to change, they need to believe there’s a reasonable chance of being caught.”

An increased popularity in video call services from the likes of WhatsApp and Snapchat are particularly concerning, with younger drivers more than twice as likely to say they make or receive video calls while driving – on average 8% of all UK drivers say they do this, with the figure rising to 13% among those aged 25 to 44.

Equally concerning is just under one-in-10 drivers aged 17 to 24 (9%) say they play games on their phones while driving, making them three-times more likely to do this compared to the average UK driver.

Other drivers’ use of handheld phones is the second biggest overall motoring-related concern identified in the 2020 RAC Report on Motoring research, after the state of local roads – a third of all UK drivers surveyed (32%) say the issue concerns them and strikingly nearly eight-in-10 (79%) now want to see camera technology introduced to catch drivers acting illegally.

The 29% of drivers of all ages in 2020 that say they make and receive calls on handheld phones while driving is a five percentage point increase on last year and the highest proportion since 2016.

While younger drivers are still more likely to do so (42%, down from 51% last year), those in the 25 to 44 age group are also statistically more likely to break the law in this way (32% admit to doing so, almost unchanged on 2019’s figure of 33%).

More positively, the proportion of drivers admitting to other dangerous activities such as checking or sending text messages or taking photos or video appear to be reducing – although it is unclear whether this is simply down to lower overall car use this year as a result of the pandemic.

Less than one in 10 (8%) of all drivers say they text or send other messages while driving, down from 14% last year and from a high of 20% in 2016.

But young drivers are again much more likely to break the law – 15% of those aged 17 to 24 say they are doing it in 2020, although this is down substantially on 2019 (37%).

More than one-in-10 motorists (14%) this year say they check texts or other app notifications while driving, down from 17% in 2019. Among younger drivers, the proportion is 22%, down from 35% last year.

Williams said: “While there’s been a reduction in some elements of this dangerous activity, more people say they are making and taking calls now than at any point since 2016, shortly before tougher penalties were introduced.

“Our findings from 2016 were a watershed moment which led to the UK Government calling for people to make illegal mobile phone use while driving as socially unacceptable as drink-driving.

“The fact drivers still state it’s their second biggest motoring concern of all shows that more progress still needs to be made here.”

Brake, the road safety charity, is calling for a complete ban on the use of a phone when driving, including hands-free.

The road safety campaigners claim this view is supported by evidence, which shows hands-free devices impairing driving as much as hand-held and are urging the Government to provide clarity in the law, before more lives are lost.

Joshua Harris, director of campaigns for Brake said: “Any use of a phone behind the wheel is dangerous but the fact that such a large proportion of young people admit to making video calls and playing games when driving really beggars belief.

“We need clarity in the law around phone use behind the wheel, and we need it now. The Government must implement a full ban on phone use when driving, including hands-free, to make the dangers crystal clear to the public and to crack-down on this reckless behaviour. The police must also be provided with the right tools and investment to enforce the roads effectively.

“In the wrong hands, a car is a lethal weapon and even a moment’s distraction from the road can have catastrophic consequences. More than 75 people are killed on UK roads every day and with driver distraction levels seemingly on the rise, the Government must step in and act, now.” 

Inspector Frazer Davey, of the Avon and Somerset Police Roads Policing unit, said that the importance of concentrating on driving “cannot be overstated”.

“Using a mobile phone while in charge of a car puts you and everyone else at risk. The consequences of allowing yourself to be distracted while you are driving can be catastrophic. It’s simply not worth it.”

Type of handheld mobile phone use while driving	2020 and 2019 figure (all drivers)	2020 and 2019 figure (drivers aged 17-24)
Make and receive calls	29%, up from 23%	42%, down from 51%
Send texts, social media posts or use the internet	8%, down from 14%	15%, down from 37%
Check texts, social media posts or app notifications	14%, down from 17%	22%, down from 35%
Take photos or record video	6%, down from 13%	14%, down from 35%
Make or receive video calls	8%	18%
Play a game on a mobile phone	3%	9%

Source: representative sample of UK drivers from RAC Report on Motoring. UK sample size: 3,068  By Graham Hill thanks to Fleet News

I warned of this situation even before we voted to exit the EU. Whenever the EU arranged a trade deal with a country outside the EU bloc in order for the goods (not just cars) to be considered European and therefore qualify for free tariffs the majority of the product, in this case the car, had to be manufactured within Europe.

Some reports suggested 51% others as high as 60% had to be manufactured within the EU. I raised the question at the time that whilst we would possibly end up with a deal with Europe resulting in duty free sales of cars both to and from the EU it still meant that we would be outside the EU.

So what did this mean? Whilst in  Europe we have movement of components backwards and forwards but as long as the majority of the cost of a car was sourced in Europe it met the conditions attached to free trade with other countries.

So let’s look at an example, not genuine but for illustration. The EU has a Free Trade deal with South Korea. Mercedes sell cars to South Korea duty free based on the cars being predominantly manufactured in Europe by value. So currently the Mercedes is made using UK parts, say dashboards, screens, interiors etc. all considered to be EU parts.

The UK content accounts for say 10% of the cost of the car contributing to say 55% made in the EU. The rest is sourced from say China, India, US etc. Once out of the EU the EU content drops to 45% as we no longer contribute to the EU portion which means that the car now falls outside the free trade rules and becomes subject to duty charges.

I was ignored at the time as I was told that this would all come out in the trade deal. It hasn’t and could easily lead to European manufacturers replacing UK parts with parts manufacture in the EU.

And it gets worse.

When we manufacture items in the UK we often source components from outside the EU but under the rules of origin we have been able to use parts from outside the UK but the finished item can still be sold as British. The technical term is Cumulation.

It seems that many of the components used in UK car manufacturing come in from Turkey and Japan. It seems that according to our chief negotiator David Frost the EU has thrown out the practice of cumulation insisting that 60% of the component cost of anything sold to the EU must be sourced in the UK to qualify for free trade.

Component parts from Turkey and Japan that have traditionally been regarded as part of ‘made in the UK’ under cumulation rules will in future fall outside the UK content. Which means that whilst we could have a free trade deal between us and the EU if vehicles don’t contain sufficient UK components to meet the rules, tariffs will have to be paid.

This will certainly be bad news for Jaguar Landrover, Ford, Nissan and Vauxhall all of which use a lot of parts from Turkey and Japan and sell many vehicles into Europe.

Frost has also confirmed that the EU has rejected the UK’s request for electric cars, batteries and bicycles to be treated leniently under the rules of origin if the majority of components come from elsewhere.

Sadly it seems that the originally agreed Theresa May withdrawal agreement had addressed and resolved this issue – according to the Guardian. 2 years ago the average British produced content of cars built in the UK was about 44% which means they will all fall foul of the country of origin rules.

As I understand it if we come out with a deal, components that are made in the EU that feed into British made items will pass the rules of origin test but components from outside the EU won’t in the future. We have some difficult times ahead. By Graham Hill

Every so often I receive directions to dealerships by solicitors to protect them from consumer claims. Anything to avoid carrying out a repair or paying back money. In this missive, they explain what a dealer should do when it comes to carrying out repairs as a gesture of goodwill.

Dealerships often have a policy on when they will allow goodwill repairs.  They may be offered because the warranty has recently run out, the problem is recurring due to possible driver error, or because the customer just likes to complain and it gets them off your back.

Most customers will accept goodwill gestures for what they are, a goodwill gesture and not a legal obligation. But there is always one customer who tries it on, pushing to get all they can out of you, taking advantage of your generosity.

There is a danger that you carry out a goodwill repair to something that didn’t exist at the point of sale or has been described as falling within the constraints of the Consumer Rights Act, giving the customer the impression the problem is the dealer’s responsibility and the problem existed when they bought the car.

By carrying out a repair, you are potentially taking ownership of the problem. The repair must resolve the problem brought to you in the first place or else you could be pursued to court on the basis that your repair caused the fault that is now being complained about. 

A goodwill repair can blow up in your face as it could infer an extension to the warranty or that there is a warranty on the parts that you fit.  This is made worse if you suspect that the problem has been caused by the customer driving or modifications carried out.

Your repairs could mask the true cause of the original problem and make it difficult to prove further down the line. 

If legal proceedings are issued by the customer, goodwill repairs can also make it more difficult in your defence to argue that there was nothing wrong with the vehicle when sold. Judges don’t generally need too much persuading to conclude that a vehicle was faulty at the point of sale.

This doesn’t mean that goodwill repairs should not be carried out. They are an important tool in generating loyal customers, especially as for many consumers it’s how a complaint is dealt with that can say far more about you than how the sale was dealt with.

However, it is important you document your decision by making it clear it is a goodwill repair – it is not under the warranty, there is no warranty for any new parts fitted as part of(s) provision, and it is in no way an admission the vehicle has any defects or issues. By Graham Hill

The following article mentioned specifically fleet managers being responsible for offences that drivers are convicted for. But beware if you are a director, owner or partner of a company that either provides company cars or pays an allowance for employees to use their own cars on business (either a car allowance or mileage allowance) as the same rules apply to the person responsible.

Fleet decision-makers could face the same penalty points as their employees should they be convicted of a driving offence, the Licence Bureau is warning.

The supplier of driver licence validation services says it is witnessing an increasing number of these cases being recorded on its system.

Responsible parties can incur the same penalty points as the actual vehicle driver due to the often unknown and much misunderstood ‘cause or permit to drive’ legislation.

Licence Bureau says that it means even though the initial offence was committed by a third party, it was ultimately the fleet manager’s responsibility.

Steve Pinchen, sales director of Licence Bureau, explained: “This much unknown rule has some very serious implications indeed for individuals and businesses alike.

“Those responsible for business fleets – of any scale – really do need to do their homework and ensure that they have all bases covered when it comes to compliance. Not only that, but there is a cultural aspect here too where everyone must be attuned to minimising road safety risk.”

According to the Road Traffic Act 1988/1991, ownership of a vehicle involved in an offence is irrelevant. This therefore implicates both owned business fleet and grey fleet operators.

The Act also cites that causing or permitting driving otherwise than in accordance with a licence can incur three to six points with fine up to £1,000.

The points remain for four years on licence from date of offence. The ‘person responsible for the fleet’ can have the points added to their own personal driving licence.

At present, the majority of these ‘dual penalty recipient’ offences recorded on Licence Bureau’s system relate to ‘causing or permitting using a vehicle uninsured against third party risks’ – an offence which carries six to eight penalty points.

Pinchen said: “Beyond the actual penalty points there are the knock-on implications for elevated risk profiles within the business and what that might mean for insurance premiums; professional and personal impacts for fleet managers; as well as potential for reputational damage for the company.”

Other offences recorded on Licence Bureau’s system include ‘using a vehicle with defective tyres’ which carries three penalty points for each individual implicated, and ‘using a mobile phone while driving a motor vehicle’ which carries three to six penalty points.

The volume of motoring fines and penalties incurred by company car and van drivers increased by 3% in 2019, according to figures from Lex Autolease released earlier this year.  By Graham Hill thanks to Fleet News

Automotive companies from across the UK and EU are calling for an ambitious free trade deal, warning that ‘no deal’ will have a catastrophic impact on the industry.

If no deal is reached and ratified before December 31, World Trade Organisation (WTO) non-preferential rules, including a 10% tariff on cars and up to 22% on vans and trucks would apply.

Such tariffs – far higher than the small margins of most manufacturers – would almost certainly need to be passed on to consumers, making vehicles more expensive, reducing choice, and impacting demand. Furthermore, automotive suppliers and their products will be hit by tariffs, they say.

New calculations, published on Monday, September 14 by the Society of Motor Manufacturers and Traders (SMMT), suggest that a reduction in demand resulting from a 10% WTO tariff for cars and vans could reduce EU and UK factory output over the next five years by three million units.

That would equate to losses worth €52.8 billion (£48.7bn) to UK plants and €57.7bn (£53.2bn) to those based across the EU. Suppliers would also suffer from these changes, it says.

The lead organisations representing vehicle and parts makers across the EU, the European Automobile Manufacturers Association (ACEA) and the European Association of Automotive Suppliers (CLEPA), along with 21 national associations, including the SMMT, have joined forces to warn that this combined loss in trade value would seriously harm one of Europe’s most valuable assets.

Collectively, the EU27 and UK automotive sector is responsible for 20% of global motor vehicle production and spends some €60.8bn (£56bn) on innovation each year, making it Europe’s largest R&D investor.

The SMMT’s chief executive, Mike Hawes, said:  ”These figures paint a bleak picture of the devastation that would follow a ‘no deal’ Brexit.

“The shock of tariffs and other trade barriers would compound the damage already dealt by a global pandemic and recession, putting businesses and livelihoods at risk.

“Our industries are deeply integrated so we urge all parties to recognise the needs of this vital provider of jobs and economic prosperity, and pull out every single stop to secure an ambitious free trade deal now, before it is too late.”

The industry says that any deal should include zero tariffs and quotas, appropriate rules of origin for both internal combustion engine and alternatively fuelled vehicles, plus components and powertrains, and a framework to avoid regulatory divergence.  

Crucially, it says that businesses need detailed information about the agreed trading conditions they will face from January 1, 2021, to make preparations. This, combined with targeted support and an appropriate a phase-in period that allows for greater use of foreign materials for a limited period of time, will ensure businesses are able to cope with the end of the transition period.

Eric-Mark Huitema, ACEA director general, said: “The stakes are high for the EU auto industry – we absolutely must have an ambitious EU-UK trade agreement in place by January. Otherwise our sector – already reeling from the COVID crisis – will be hit hard by a double whammy.”  By Graham Hill thanks to Fleet News

Early terminations and contract extensions from fleets and company car drivers are being reported by leasing companies as job losses increase.

Over the past three months, the number of people claiming out-of-work benefits (job seekers allowance and low income benefits) has more than doubled, reaching 2.7 million in July, according to the Office for National Statistics (ONS).

The latest data also shows more than three million people were still furloughed as the Government scheme begins to wind down.

The ONS says that more than one-in-10 workers (12%) were, effectively, having their wages paid by the Government between late July and the middle of August, a 50% reduction on May’s figures.

Unsurprisingly, the highest number of furloughed staff were found in those companies yet to re-open – almost three-quarters of staff (71%) compared to 11% at those businesses back trading.

The scale of the downturn is unprecedented. The UK economy is now 17.2% smaller than it was in February 2020.

Furthermore, Quarter 2 2020 is now 22.1% below Quarter 4 2019, which is more than three times greater than the total fall during the next largest period of recession, which occurred during the global economic downturn of 2008 to 2009.

The Bank of England has warned that UK unemployment is expected to peak at 2.5 million by 2021, with more than a million jobs expected to be lost in the second half of this year.

It highlighted what it called the “considerable uncertainty” remaining about the prospects for employment after the furlough scheme finishes in October.

WINNERS AND LOSERS

Paul Hollick, chairman of the Association of Fleet Professionals (AFP), said: “Some companies have taken the bit between the teeth by introducing redundancies quickly, but they were already on shaky ground, with plans already in place.”

However, he explained there have been “winners and losers” as a result of the pandemic, with those in the hospitality and travel sector hit particularly hard, while anything that is digitised and can create online services and solutions is able to tap into growing demand.

The amount of money spent online increased by 61.9% in June when compared with February, ONS data suggests. This has resulted in an increase of £943.5 million in average weekly sales from £1.5 billion in February to a staggering £2.5bn in June.

Courier fleets have been among some of the biggest winners, with DPD announcing it was recruiting 6,000 new staff, including 3,500 drivers, in response to the unprecedented boom in online shopping.

The delivery firm is investing £200m this year to expand its next-day parcel capacity, including £100m on vehicles, £60m on 15 new regional depots (10 more than originally planned in 2020) and the remainder on technology.

The new jobs will include delivery and HGV drivers, warehouse staff, management positions and support staff, including mechanics.

CEO Dwain McDonald said the business was experiencing the “biggest boom in online retailing in the UK’s history”.

It is a similar story at APC, with 100 new roles available, all of which will be permanent positions, including drivers, warehouse operatives, customer services staff and IT.

The courier firm’s chief executive, Jonathan Smith, explained that the past five months have seen “unprecedented demand” for its delivery services.

For firms facing a more uncertain outlook, Hollick believes business owners and operators do not know what to do in terms of “rightsizing their business”.

He explained: “No one really understands the total impact yet, because everything is being propped up (by the Government), but I wouldn’t want to be an account manager at this time.

“The way that you operate with customers is going to fundamentally change post-Covid. I think it’s going to be a case of sitting in an office or at home to do an account review rather than face-to-face.”

EARLY TERMINATIONS

Account management and sales teams would, typically, be out on the road, potentially covering long distances to visit their customer base on a regular basis.

But lockdown has shifted customer meetings online and, with obvious productivity gains, returning to pre-pandemic working practices is not on the cards.

Volkswagen Financial Services Fleet reported it was seeing “no demand” from customers for a return to face-to-face meetings. Head of sales and marketing, Tom Brewer, said: “We’re seeing a desire to continue with remote meetings at the moment.

“In our experience, this approach doesn’t seem to have any detriment to the quality of the conversations or the effectiveness of the meetings. There are upsides for all parties – aside from minimising the risk to everyone’s health – in the productivity benefits for us and our customers; meetings tend to be shorter and there is no fuel cost and no time lost to travel.”

It is not planning a reduction in headcount, but elsewhere companies looking to tighten their belts are recognising that they can do more with less.

As a result, Hollick expects the traditional company car market will shrink due to the significant job losses already being seen and those yet to come as the furlough scheme ends.

Furthermore, he says other employees, who qualified for a car due to the amount of annual mileage they covered, face having the benefit removed due to now not hitting the required threshold.

Three-quarters (74.8%) of fleets told Fleet News in a recent survey that they expect greater use of video conferencing in the long term, while almost 61% expect to see average mileages fall. And more than a third (35.8%) said that they expect to be running fewer company cars in the future.

Alphabet has reported an increase in early terminations and reschedule requests in recent months, driven predominantly by individual and small-to-medium enterprise (SME)customers.

However, Gavin Davies, Alphabet’s general manager for customer relationship management and public sector, said: “We are seeing bulk early termination requests from some of our corporate fleets as well, but they are also utilising other options, such as putting new car orders on hold while they assess their individual situations and future fleet needs.

“This has been the case particularly in those industries that have been hit hardest by the lockdown or still have staff on furlough.”

He added: “As the furlough scheme has given an artificial stimulus to current demand, we do expect to see an increase in early terminations as the scheme comes to an end in October.”

Matthew Walters, head of consultancy and customer data services at LeasePlan UK, says contract extensions have increased by approximately 50% above average. “Many businesses are also increasingly interested in the efficiency savings gained by outsourcing their operations and fleet activity.”

Jon Lawes, managing director of Hitachi Capital Vehicle Solutions, told Fleet News that sales teams were particularly impacted by a lack of travel. “We’re seeing customers looking to reduce their contract mileage moving forward, meaning that policy benchmark mileages have reduced by approximately 10% across certain customers,” he said.

The greatest impact has been in the retail sector, with job losses resulting in company car numbers being cut.

“The headcount and vehicle allocation for retail store area managers has reduced as a result of companies streamlining their middle management to respond to the economic impact of the virus,” said Lawes.

Since March, Lex Autolease has granted payment holidays to more than 3,000 customers, from small fleets to those with thousands of vehicles.

Mileages have also been amended to encourage rental cost-savings and existing vehicles redistributed. As a result, Andy Barrell, head of business development at Lex Autolease, said: “We’re not seeing mass vehicle terminations across our customer base.

“Customers are naturally more inclined towards short-term agreements when there is ongoing uncertainty, so it’s no surprise we’ve seen an increase in demand for short-term daily rental, alongside our informal extension agreements – giving customers more time to assess future requirements.”

The total number of new cars registered to fleet and business so far this year is 45.3% down year-on-year, with 433,868 units registered in 2020, compared with 792,091 in the same period last year.

Historic HMRC data shows a declining pool of company cars, with 890,000 employees receiving the benefit in 2017/18, compared with 940,000 the previous year.

Officials blamed the dramatic decline on reporting issues leaving some vehicles unaccounted for, but the figures for 2018/19, in the coming weeks, are still expected to show a downward trend.

Hollick, however, is predicting leasing firms and carmakers could benefit from a renewed interest in salary sacrifice. He explained: “A few big fleets have already mentioned to me that they are relaunching salary sacrifice schemes to take advantage of the low rates for electric vehicles (EVs). But it’s going to be a fascinating market and I don’t think anybody will know the true impact until the start of next year.”

Hitachi Capital’s Lawes says employees are concerned about the long-term economic impact of Covid-19 and committing to a company car contract, with some perk schemes affected.

That being said, he also sees the renewed potential of salary sacrifice. He told Fleet News: “Now is a prime time to take a salary sacrifice EV with 0% BIK charges.”

Although Alphabet has seen an increasing demand to move to cash incentives in recent years, Davies also highlighted the “significant taxation benefits” for companies and drivers who choose to adopt ultra-low-emission vehicles (ULEVs).

“Alphabet has seen a huge uptake in EVs since the 0% BIK rates were introduced earlier this year,” he said.  By Graham Hill thanks to Fleet News

The Chancellor’s summer economic plan introduced a range of measures to help the UK economy recover from the impact of the coronavirus.

The plan, revealed to the House of Commons yesterday (Wednesday, July 8), to protect jobs, help younger workers and encourage spending with measures such as a temporary VAT cut, from 20% to 5%, for the hospitality sector and a restaurant voucher scheme.

However, help for the fleet industry and wider automotive sector, including a potential scrappage scheme, was not forthcoming.

Paul Hollick, chairman of fleet representative body the Association of Fleet Professionals (AFP), said: “The Chancellor’s announcement was all about carefully targeted help for various sectors that are felt to be among the most vulnerable and it is disappointing that none of this support has found its way into areas that are likely to benefit fleets.

“This especially applies to low-carbon transport initiatives but there could also have potentially been aid for dealers, manufacturers and even fleet service support companies, all of which are facing specific problems.

“Given the fast-moving economic and infection situation, we don’t think this is the last time we’ll see him making announcements of this type over the next few months and we remain hopeful that we will be included in future programmes, an argument we’ll be making as an organisation.”

The automotive sector had been hoping for a scrappage scheme, offering money off a new car purchase.

Mike Hawes, chief executive at the Society of Motor Manufacturers and Traders (SMMT), welcomed the Chancellor’s plans to safeguard jobs and encourage consumer spending in some parts of the economy.

However, he said: “It’s bitterly disappointing the Chancellor has stopped short of supporting the restart of one of the UK’s most important employers and a driver of growth.

“The automotive sector has been particularly hard hit, with thousands of job losses already announced and many more at risk.

“Of Europe’s five biggest economies, Britain now stands alone in failing to provide any dedicated support for its automotive industry, a situation that will only deter future investment.

“We urgently need government to expand its strategy and introduce sector-specific measures for UK auto to support cash flow such as business rate holidays, tax cuts, and policies that provide broader support for consumer confidence and boost the big ticket spending that drives manufacturing. Until critical industries such as automotive recover, the UK economic recovery will be stuck in low gear.”

The Chancellor instead offered a ‘job retention bonus’ to encourage firms to retain furloughed staff. The one-off £1,000 payment will be made to employers for every furloughed employee retained to the end of January 2021.

It applies to workers earning over £520 per month, with the cost estimated at up to £9.4 billion.

There is a six-month VAT cut for restaurants, hotels and attractions, from 20% to 5% from July 15 to January 12, 2021.

Food and non-alcoholic drinks in restaurants, pubs and cafes, as well as hot takeaway food will be covered. Accommodation in hotels and B&Bs and admission to attractions such as theme parks and cinemas also affected

The threshold for stamp duty on residential property in England and Northern Ireland will also rise from £125,000 to £500,000. It applies from July 8 until March 31, 2021.

Energy efficiency grants for homes have also been introduced.

In addition, a ‘Eat Out to Help Out’ scheme offers 50% discount for every diner, up to £10 a head, from Monday to Wednesday throughout August.

Support for young workers is to be delivered through the ‘Kickstart scheme’ – a £2bn fund to pay for six-month work placements for 16 to 24-year-olds on universal credit – and grants for training young people.

In terms of infrastructure, more is expected in the Budget, while the Prime Minister, Boris Johnson, has earmarked £100 million for 29 road projects.

Nick Molho, executive director of the Aldersgate Group, said: “Beyond the need to commit public investment to support shovel ready projects and early stage innovation trials, it is critical that the Government puts forward a comprehensive policy plan in the autumn to drive private sector investment towards the low carbon and environmentally resilient infrastructure needed to put the UK on track for its net zero and nature restoration targets.

“Clear policy commitments in areas such as energy efficiency, clean transport and industrial decarbonisation will be vital if the private sector is to do a lot of the heavy lifting to build a competitive, jobs rich, low carbon economy.” By Graham Hill thanks to Fleet News

The Government is being warned a ‘no deal’ Brexit could impact vehicle costs and prove fatal to the wider UK automotive sector.

A recent Society of Motor Manufacturers and Traders (SMMT) survey showed one-in-three automotive employees was still on furlough at the end of July, with up to one-in-six jobs at risk.

The impact of the coronavirus crisis is being felt across the sector, but jobs could also be threatened by the prospect of a ‘bare bones’ or no-deal Brexit, says the UK automotive trade body.

If the EU and UK do not agree a deal by the end of the year, the UK will leave the EU’s single market and the customs union without any agreement on future access from January 1, 2021.

The SMMT wants a full, zero-tariff deal in place by the end of the transition period to give businesses on both sides the chance to prepare.

Chief executive Mike Hawes said: “Before Covid-19, we expected to produce 1.3 million vehicles this year; the pandemic means we’re already looking at scarcely 900,000.

“A ‘no deal’ Brexit would wreak further long-term damage on the sector. Tariffs would add cost, custom duties and complexity, which would disrupt supply.”

The SMMT suggests a ‘no deal’ scenario could see UK vehicle volumes falling below 850,000 by 2025 – the lowest level since 1953. This would mean a £40 billion cut in revenues, on top of the £33.5bn cost of Covid-19 production losses over the period for UK automotive.

“The industry cannot withstand the shock of a hard Brexit,” explained Hawes.

“Covid-19 has consumed every inch of capability and capacity. There is not the resource, the time nor the clarity to prepare.”

Almost all countries in the world are part of the World Trade Organisation (WTO) which regulates international trade. Should the UK leave the EU without a deal, its trade with the EU will be governed by WTO rules.

When joining the WTO, each country negotiates the maximum tariffs it can set on various types of goods. The tariff charged by the EU on imported cars is 10%.

Leaving without a deal would mean UK-built cars facing a 10% tariff cost and vice versa, says the SMMT’s annual UK Automotive Trade Report.

Tariffs would result in a price increase of almost £3,000 on the average UK exported car to the EU, a £2,000 price increase on UK vans exported to the EU and a price increase of £1,800 on cars and vans imported from the EU, if fully passed on to UK consumers.

The report adds that additional customs duties, costs and complexity would significantly disrupt sourcing of parts and components from the EU.

Executive director, business transformation at Ford of Britain, Graham Hoare, said the manufacturer had implemented measures to ensure product is available for fleets.

He explained: “We’ve brought a lot of cars into the UK and have maintained that availability. That’s really important so we don’t have disruption to our supply chains as the change happens.”

But he warned: “A Free Trade Agreement is necessary for the viability of our business. If you think about all the other changes we’re embarking upon… another burden just makes the activities we’re performing in the UK a little less viable.”

JUST-IN TIME

Frictionless trade within the EU has been critical for enabling the UK car industry to develop supply chains that cross EU borders several times.

A separate report, produced by The UK in a Changing Europe on Manufacturing and Brexit, highlights how supply chains have to operate with supreme efficiency, and parts have to be delivered ‘just-in-time’ throughout the day.

As an example, 350 trucks arrive from the EU every day at Honda’s plant in Swindon, bringing in about two million parts. Components arrive from five-24 hours after ordering. The plant is scheduled to close a year from now.

Meanwhile, a typical driveline system produced by GKN, the British-based supplier, incorporates specialist forged parts from the UK, Spain, Italy, France and Germany.

These are assembled at GKN Driveline’s factory in Birmingham and supplied to automotive assemblers in the UK and EU.

The components, assembled drivelines and the final assembled car could cross the English Channel several times, says the report.

It is a similar story for BMW, which assembles engines at its Hams Hall engine-assembly plant near Birmingham.

Engine blocks come from France and are processed at the plant. They may go to Germany for further work before being assembled.

The engine may go into a Mini assembled in Oxford or the Netherlands, or into a BMW assembled in Germany.

“The final car could be sold anywhere in Europe or globally,” the report says. “This close integration and the need for minimal trade friction becomes even more important as most UK car producers operate on very low profit margins (around £450 on a £15,000 car).”

BREXIT TALKS

After a meeting between Prime Minister Boris Johnson and the EU Commission president Ursula von der Leyen last month, both agreed new momentum was needed in negotiations.

Official talks resumed at the start of this month, but ended with the EU’s chief negotiator, Michel Barnier, saying that “regardless of the outcome” there would be “inevitable changes” from January 1, 2021. The next round of negotiations began last week, with no apparent progress made.

The commission has also told member states and businesses to revisit plans for a ‘no deal’ Brexit.

In a press briefing, prior to the SMMT’s annual International Automotive Summit, Hawes insisted: “We must secure a comprehensive Free Trade Agreement that maintains tariff- and quota-free trade. With such a deal, a strong recovery is possible.”

The UK in a Changing Europe report says the potential danger is that carmakers may simply decide that production in the UK is no longer profitable and shift their assembly plants to the EU.

Many manufacturers with plants in the UK also have plants in the EU to which they could move production. Moreover, many of these plants have spare capacity.

“Such relocations usually happen when new vehicle models are introduced, and the decisions about sites are normally taken at least two years in advance of planned production starts,” it says.

‘MULTIPLE CHALLENGES’

Key companies in the UK automotive sector, that account for the bulk of UK automotive production – Nissan, Jaguar Land Rover (JLR), and Groupe PSA (Vauxhall’s owner) – have all planned new models in the next couple of years.

“There is a real danger they will decide to produce them in the EU, not the UK,” says the report. “This would have a knock-on effect on other industries in the UK.”

UK steel, for example, despite not being subject to tariffs itself, would suffer because the car industry would contract, reducing demand for steel.

“Manufacturing matters,” said Professor David Bailey, senior fellow of UK in a Changing Europe.

“Much of the sector has already taken a hit through the Covid-19 pandemic and Brexit risks further disruption for manufacturers which they are keen to minimise.

“A no-trade deal is seen as the worst-case scenario for sectors like automotive given the impact of tariffs. But even a minimal Free Trade Agreement could bring disruption for manufacturers, for example via its impact on supply chains and in terms of regulatory divergence. Whatever the form of Brexit at the end of the transition period, manufacturing faces multiple challenges.” By Graham Hill Thanks To Fleet News

Before providing the latest report I must first warn those who are thinking of joining one of the many class actions against Daimler (Mercedes Benz) over their emissions cheat systems. Read the terms of the class action and make sure that you are not committing to any of the costs should the action fail. I’ll be keeping an eye on things for you as I had 3 Mercedes during the period in question!

Legal claims against Mercedes-Benz for emissions ‘cheating’ in England and Wales have been strengthened following a £1.6 billion settlement in the USA.

London law firm Fox Williams is pursuing claims for Mercedes owners in England and Wales in collaboration with US law firm Hagens Berman, which achieved a payout of more than £560 million for US Mercedes owners.

Mercedes, however, claims the cars sold in America are different to those in the UK.

It is estimated by Fox Williams that up to 1.2 million potential claimants owning (or having owned) impacted vehicles in England and Wales are affected. This includes private owners and businesses, such as fleet operators and hire car companies.

According to Hagens Berman’s investigations, Mercedes used defeat device, similar to the one used by Volkswagen, on its BlueTEC diesel vehicles.

Affected models are alleged to include the A-Class, B-Class, C-Class, Citan, CLA, CLS, E-Class, GL-Class, GLA-Class, GLC-Class, GLE-Class, GLS, M-Class, S-Class, SLK, Sprinter, V-Class, and Vito, built between 2008 and 2018.

Andrew Hill, the Fox Williams partner who is leading the action, said: “Like many members of the general public, I have been shocked at the allegations of deception and fraud made against some of the world’s largest and most prestigious automotive manufacturers, including Mercedes-Benz.  We believe business and private owners in England and Wales will very likely have good claims for the damage caused to them from unwittingly owning or leasing dirty diesels.”

Three other law firms, PGMBM, Leigh Day and Slater and Gordon, are also investigating potential group claims against Mercedes-Benz over emissions.

A spokesperson for Mercedes-Benz Cars UK said: “With regard to the US settlement, the vehicles in question were produced exclusively for the North American market.  The emissions control system of US vehicles differs in comparison to vehicles in Europe both with respect to hardware components and configuration of the control software.  In addition the legal framework and the certification process in the US is different to that in Europe.

“We believe the claims brought forward by the UK law firms are without merit, and will vigorously defend against any group action.”

Daimler AG, the parent company of Mercedes-Benz, was fined more than £700m by German prosecutors in 2019 over the diesel emissions scandal.

It has filed objections against the German Federal Motor Transport Authority’s (KBA) recall orders regarding diesel exhaust emissions and these objection proceedings are ongoing.  By Graham Hill thanks to Fleet News

The Government is being warned a ‘no deal’ Brexit could impact vehicle costs and prove fatal to the wider UK automotive sector.

A recent Society of Motor Manufacturers and Traders (SMMT) survey showed one-in-three automotive employees was still on furlough, with up to one-in-six jobs at risk.

The impact of the coronavirus crisis is being felt across the sector, but jobs could also be threatened by the prospect of a ‘bare bones’ or no-deal Brexit, says the UK automotive trade body.

If the EU and UK do not agree a deal by the end of the year, the UK will leave the EU’s single market and the customs union without any agreement on future access from January 1, 2021.

The SMMT wants a full, zero-tariff deal in place by the end of the transition period to give businesses on both sides the chance to prepare.

Chief executive Mike Hawes said: “Before Covid-19, we expected to produce 1.3 million vehicles this year; the pandemic means we’re already looking at scarcely 900,000.

“A ‘no deal’ Brexit would wreak further long-term damage on the sector. Tariffs would add cost, custom duties and complexity, which would disrupt supply.”

The SMMT suggests a ‘no deal’ scenario could see UK vehicle volumes falling below 850,000 by 2025 – the lowest level since 1953. This would mean a £40 billion cut in revenues, on top of the £33.5bn cost of Covid-19 production losses over the period for UK automotive.

“The industry cannot withstand the shock of a hard Brexit,” explained Hawes.

“Covid-19 has consumed every inch of capability and capacity. There is not the resource, the time nor the clarity to prepare.”

Almost all countries in the world are part of the World Trade Organisation (WTO) which regulates international trade. Should the UK leave the EU without a deal, its trade with the EU will be governed by WTO rules.

When joining the WTO, each country negotiates the maximum tariffs it can set on various types of goods. The tariff charged by the EU on imported cars is 10%.

Leaving without a deal would mean UK-built cars facing a 10% tariff cost and vice versa, says the SMMT’s annual UK Automotive Trade Report.

Tariffs would result in a price increase of almost £3,000 on the average UK exported car to the EU, a £2,000 price increase on UK vans exported to the EU and a price increase of £1,800 on cars and vans imported from the EU, if fully passed on to UK consumers.

The report adds that additional customs duties, costs and complexity would significantly disrupt sourcing of parts and components from the EU.

Executive director, business transformation at Ford of Britain, Graham Hoare, said the manufacturer had implemented measures to ensure product is available for fleets.

He explained: “We’ve brought a lot of cars into the UK and have maintained that availability. That’s really important so we don’t have disruption to our supply chains as the change happens.”

But he warned: “A Free Trade Agreement is necessary for the viability of our business. If you think about all the other changes we’re embarking upon… another burden just makes the activities we’re performing in the UK a little less viable.”

JUST-IN TIME

Frictionless trade within the EU has been critical for enabling the UK car industry to develop supply chains that cross EU borders several times.

A separate report, produced by The UK in a Changing Europe on Manufacturing and Brexit, highlights how supply chains have to operate with supreme efficiency, and parts have to be delivered ‘just-in-time’ throughout the day.

As an example, 350 trucks arrive from the EU every day at Honda’s plant in Swindon, bringing in about two million parts. Components arrive from five-24 hours after ordering. The plant is scheduled to close a year from now.

Meanwhile, a typical driveline system produced by GKN, the British-based supplier, incorporates specialist forged parts from the UK, Spain, Italy, France and Germany.

These are assembled at GKN Driveline’s factory in Birmingham and supplied to automotive assemblers in the UK and EU.

The components, assembled drivelines and the final assembled car could cross the English Channel several times, says the report.

It is a similar story for BMW, which assembles engines at its Hams Hall engine-assembly plant near Birmingham.

Engine blocks come from France and are processed at the plant. They may go to Germany for further work before being assembled.

The engine may go into a Mini assembled in Oxford or the Netherlands, or into a BMW assembled in Germany.

“The final car could be sold anywhere in Europe or globally,” the report says. “This close integration and the need for minimal trade friction becomes even more important as most UK car producers operate on very low profit margins (around £450 on a £15,000 car).”

BREXIT TALKS

After a meeting between Prime Minister Boris Johnson and the EU Commission president Ursula von der Leyen last month, both agreed new momentum was needed in negotiations.

Official talks resumed at the start of this month, but ended with the EU’s chief negotiator, Michel Barnier, saying that “regardless of the outcome” there would be “inevitable changes” from January 1, 2021. The next round of negotiations began last week, with no apparent progress made.

The commission has also told member states and businesses to revisit plans for a ‘no deal’ Brexit.

In a press briefing, prior to the SMMT’s annual International Automotive Summit, Hawes insisted: “We must secure a comprehensive Free Trade Agreement that maintains tariff- and quota-free trade. With such a deal, a strong recovery is possible.”

The UK in a Changing Europe report says the potential danger is that carmakers may simply decide that production in the UK is no longer profitable and shift their assembly plants to the EU.

Many manufacturers with plants in the UK also have plants in the EU to which they could move production. Moreover, many of these plants have spare capacity.

“Such relocations usually happen when new vehicle models are introduced, and the decisions about sites are normally taken at least two years in advance of planned production starts,” it says.

‘MULTIPLE CHALLENGES’

Key companies in the UK automotive sector, that account for the bulk of UK automotive production – Nissan, Jaguar Land Rover (JLR), and Groupe PSA (Vauxhall’s owner) – have all planned new models in the next couple of years.

“There is a real danger they will decide to produce them in the EU, not the UK,” says the report. “This would have a knock-on effect on other industries in the UK.”

UK steel, for example, despite not being subject to tariffs itself, would suffer because the car industry would contract, reducing demand for steel.

“Manufacturing matters,” said Professor David Bailey, senior fellow of UK in a Changing Europe.

“Much of the sector has already taken a hit through the Covid-19 pandemic and Brexit risks further disruption for manufacturers which they are keen to minimise.

“A no-trade deal is seen as the worst-case scenario for sectors like automotive given the impact of tariffs. But even a minimal Free Trade Agreement could bring

disruption for manufacturers, for example via its impact on supply chains and in terms of regulatory divergence. Whatever the form of Brexit at the end of the transition period, manufacturing faces multiple challenges.”  By Graham Hill thanks to Fleet News