GUEST OPINION: What will the Con-Lib coalition mean for fleet?
08 June 2010
Following the formation of the Conservative-Liberal Democrat coalition, Phil Peace, director of sales at Hitachi Capital Vehicle Solutions, outlines what he believes will be on the new Government's transport agenda for the future
CO2 is clearly on the Government's global agenda and the transport sector is a big contributor to the problem. The Labour Party took a hard-hitting approach to taxing company cars that had high CO2 emissions. In my opinion, this has achieved the desired results and I would expect this approach to be continued by the new Government. The scrappage scheme, originally intended to boost the failing economy, also went a long way towards tackling the problem, with more people replacing old cars with new, more efficient models than ever before. However, this was an extremely costly initiative, and one the new Government doesn't have the funds to repeat.
The Conservative manifesto pledged to facilitate the switch to green cars by creating a national car-recharging network. The new Government must support this green pledge, not only by developing the infrastructure to support a wider roll-out of electric vehicles, but also by working closely with the manufacturers that are plugging away tirelessly to design and produce these vehicles.
In the run-up to the General Election, all the political parties spoke about the need to cut back on public spending. David Cameron has pledged to plough more money into the NHS, but this won't be possible without making cuts elsewhere. Government agencies have some of the biggest fleets in the country, so I anticipate these to be hit hard. Agency budgets will be slashed, which means that staff volumes will be reduced overall. In turn, this will reduce fleet budgets, so fleet managers in public organisations should brace themselves for some tough times ahead.
Both the Conservatives and Labour had been talking about a new 10-year plan to reduce road fatalities by 30%. Since the introduction of the Corporate Manslaughter Act in 2007, driver safety has been a key focus for all business car managers. But what will the Government do to achieve the reduction?
The new secretary of state for transport, Philip Hammond, has said he will stop central Whitehall funding for new fixed-speed cameras, but has been decidedly vague with regards to variable ones. Hammond might also focus his efforts on controlling speed in suburban areas, with the introduction of more 20mph zones.
In addition to this, with the development of GPS technology, many vehicles have already been fitted with a chip by manufacturers. I would anticipate this becoming more common practice in new cars. These chips have the potential to measure driver behaviour, which will give fleet managers much more visibility on what each driver is doing and enable them to reduce speeding and encourage better driving.
The current economic climate has resulted in unemployment of two and a half million. Assuming 10% of these are business car drivers, there are potentially around 250,000 fewer company cars on the road. People have become much more conscious about the cost of travel and are looking for alternative solutions. However, once the country's economy recovers, the congestion problem is likely to rear its head. There will be a lot of pressure on fleet managers to keep drivers mindful of the cost of congestion.
As part of Hammond's pledge to "end the war on motorists", he has promised to stabilise the cost of fuel by reducing taxes if the price of oil rose sharply and vice versa if it was to fall. On the face of it this seems like great news, but as the old adage goes, it could be too good to be true. Hammond has been fuzzy on the finer details of this neutralisation. What is this cap level going to be? Will it be more expensive than the price drivers are already paying today? For the time being, I am struggling to see the benefits to motorists or fleet managers, particularly if the price of fuel is to be fixed at or above the extortionate fee we are currently paying.
All in all, the new Government faces a number of significant challenges with regards to transport and the lack of clarity in their current pledges. That said, I am sure any policies will result in hitting both the fleet motorists and organisations in the pocket.