It is widely accepted that Britain must rebalance its economy, towards manufacturing and exports in particular. Since the UK already has a comparative advantage in making cars, it is well placed to capture a global share of the growing market in low-emissions vehicles. Although the government has made some progress with its policy agenda, there are a number of gaps. As it develops its policy review, Labour can hold the coalition’s feet to the fire.

Countries making up two-thirds of the world’s economy have stringent vehicle emission standards in place. These mean that car manufacturers will need to sell fewer petrol and diesel cars and more electric cars. The UK government has described this change as ‘inevitable’. Last year, though, the UK was only 15th in Europe for sales of electric cars. If sales don’t improve, manufacturers may well move to markets where there is greater demand. For example, if Sunderland’s Nissan LEAF plant is to have a future, the British public needs to start buying its cars.

Last week, the government updated its electric car strategy. There is good news in it – especially the announcement of £500m to be made available over the next parliament to support electric cars. However, there are clear problems with this strategy so Labour has an opportunity to set out its own, more radical, agenda.

IPPR research has shown that in other countries innovative local policies drives sales. In Amsterdam, electric cars don’t pay the €5 an hour charge and are put to the top of the five-year waiting list for a permit. In the global capital for electric cars, Oslo, drivers can use the bus lanes. In China, electric cars are exempt from Beijing’s licence plate lottery which limits the days on which drivers can use their cars.

With these examples in mind Labour should encourage all local authorities to work together, and with local enterprise partnerships, to examine the potential for creating new polices in their jurisdictions to promote electric car sales, beyond building charging points. There also needs to be uniformity of these policies across local authority boundaries, particularly in urban areas, as drivers don’t take electoral maps into consideration when planning their journeys.

Central government can also assist local authorities with some practical difficulties. After all, how does a traffic warden tell the difference between a Prius and a Plug-In Prius? Labour should pledge to introduce a nationally recognised green badge that helps those traffic wardens spot the difference and allows local authorities to fulfil their responsibility to the UK’s economic security and benefit from the transition to greener transport.

There is more that central government could do. In order to give more people experience of this new technology, it should pledge that by 2020 all of its own cars will have lower emissions by phasing in a fleet average government buying standard for cars of at least 95gCO2/km. Most electric cars are driven by businesses and last February’s decision to remove funding for charging points at depots should be reversed. Leasing companies buy most of the new cars sold in this country and the government should reintroduce their eligibility for capital allowances on electric cars.

Even in opposition in Westminster, Labour can help the industry’s long-term future. A district nurse considering buying an electric car, through their NHS employer, will receive company car tax benefits. Those benefits make the electric car more cost effective than a petrol car but only over a period of ownership of three or four years. As soon as possible, Labour should provide potential electric car buyers the reassurance that today’s policies would continue after a Labour victory in 2015.

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Mark Rowney is a research fellow at IPPR. He tweets @MarkRowney

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Photo: Ludovic Hirlimann