“Innovation and competition will drive us to lower vehicle emissions not government handouts for car giants”

By Andy Mayer - energy analyst at the Institute of Economic Affairs

The fast path to Net Zero is innovation of things that do not yet exist commercialised to be available at prices that are not yet possible. An outcome best driven by deregulation, competition and low taxes, not vouchers for carbon-friendly people carriers

Competition is the pressure to be better at doing that than others, such that only the best companies survive, and profits are reinvested rather than blown on executive pay. 

This is not the same thing as corporatism, a common misunderstanding, which treats incumbent large firms as the masters of industry, whose views and demands should drive wise policy. Corporatism is what trade bodies do, and the low carbon industrial complex, an unhealthy collusion between politicians and executives to drive Net Zero at the expense of the public, rather than by stimulating competition, is particularly awful in the car industry. That's why we end up with demands for taxpayer discounts on two-tonne fire hazards and newspaper hysterics whenever a company threatens to leave the country. 

No one in this story is acting with improper intent. It is entirely rational for the head of a failing old industry behemoth to seek state support to change, particularly in reaction to rules imposed upon them by that state. While politicians reasonably panic about losing a factory, jobs, and investment, from their constituencies, as their 'competition' will use it to get them out. But it's still wrong. The consequences of heavy-handed state support are to produce vehicles people don't want to buy from factories ever on the verge of collapse, and a trade deficit as lots fill with scrap-in-waiting. A country that produced British Leyland, has roads more suitable for horses, and greeted the new industry over 100 years ago by walking very slowly in front of it, carrying a flag, ought to know better. 

The response to the next chapter of Auto-neurotic catastrophising by a CEO should be a simple cheerio. Or better, an offer to make life easier for start-ups with sweeping reforms to planning, permitting and licensing rules for new technology, such that the time it takes from concept to showroom is at the lower end of 5-10 years. That's how to retain and grow the British car industry, not propping up the satellite offices of flailing global corporations better at lobbying for special treatment than inventing the future.

Do you agree with Andy Mayer? Tell us your thoughts in the comments section below...

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