Erin Baker: Diesel – politicians don't know what they are talking about

The anger in the industry was palpable, and is still reverberating. I had dinner with a member of the board of directors for Jaguar Land Rover earlier this week. JLR, and in particular Jeremy Hicks, its UK CEO, have been outspoken in their dismay at the political demonisation of diesel over the last year, and rightly so. The company is to be heartily congratulated for not keeping its mouth shut in the hope of currying a better post-Brexit deal from government, and instead being brave, and principled, enough to speak the truth to power about the reality of what this Government has done to the industry with such naive, ill-thought through pronouncements on the damage that new diesel cars (don’t) do to the environment.

The Budget tax on new diesels was, in the words of a senior global director at JLR, “counter-intuitive… we still don’t get it now”. New diesels are in many cases now cleaner than their petrol counterparts. Models that should bear the brunt of penalties are older diesel-engined cars, and yet, in order to get them off the road, the Government would have to tax those same people they encouraged to buy diesel a few years ago, and that’s a political no-no.

And so we are now witnessing the rapid death of diesel-engined cars, just as car manufacturers have cracked the technology, at a substantial R&D cost to them, of producing clean engines. In order to recoup the huge spend on such technology, manufacturers need to sell those new diesel cars to the public. Only the Government has put a stop to that, because confidence about reselling a diesel car, and recouping any of the cost, is now at an all-time low. The result will be redundancies in UK-based manufacturing plants belonging to brands which have invested in new diesel tech such as JLR, Honda, Mini, Nissan, Toyota and Bentley. So well done to the UK government, for stalling sales of clean diesels before they’ve begun in earnest, and thereby damaging an industry which accounts for roughly five per cent of UK GDP, with a turnover of £77.5bn, according to the latest figures from the Society of Motor Manufacturers and Traders.

Excellent work, Philip Hammond. As usual, it will be left to innovative thinking by skilled bosses in the automotive sector to make the best of a bad fist. Which they will do, of course, because they’re used to bailing out UK Ltd and thriving despite the Government’s best efforts. Don’t you just wish, sometimes, that politicians would help, instead of hindering, one of the UK’s most profitable sectors?