Harsh net zero rules will force more car factories to close, industry warns
After UK production fell for a 12th successive month in February, the Society of Motor Manufacturers & Traders (SMMT) criticised Rachel Reeves for failing to support the industry during her Spring Statement.
The trade body said a lack of subsidies for drivers contributed to the latest 11.6pc drop in monthly production, claiming the decline would only worsen after new taxes were introduced on EVs next month.
Mike Hawes, the SMMT's chief executive, said: 'These are worrying times for UK vehicle makers with car production falling for 12 months in a row, rising trade tensions and weak demand.
'It was disappointing, therefore, to hear a Spring Statement that did nothing to alleviate the pressure on manufacturers and, moreover, confirms the introduction next month of additional fiscal measures which will actually dissuade consumers from investing.'
He added: 'Without substantive regulatory easements, our manufacturing viability remains at risk and the UK's transition to zero-emission mobility under threat.
'The market transition is not keeping pace with ambition and, while the industry can deliver growth – and green growth at that – it needs policies to deliver that reality.'
With EVs struggling to gain traction, the SMMT said the Government should take steps to bolster demand.
This includes reconsidering a policy change set to be introduced next month that will see EVs that cost more than £40,000 pay a higher rate of road tax.
The SMMT also said VAT on new battery electric vehicles should be halved.
The latest drop in production comes after Vauxhall owner Stellantis confirmed that its Luton plant would close next month, claiming that net zero rules were partially responsible for the decision.
In particular, bosses criticised the Government's ZEV mandate, which requires at least 28pc of cars sold by manufacturers to be electric.
Meanwhile, the latest SMMT figures revealed that more than half of the cars built in the UK in February went to the EU, with 20pc going to the US.
Overall production also fell to 82,186 cars in February, which was 10,787 fewer than last year.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
29 minutes ago
- The Guardian
Thames Water says new Abingdon reservoir could cost bill payers up to £7.5bn
Struggling Thames Water has said a new reservoir in Oxfordshire could cost more than three times the original budget, pushing the eventual cost to be covered by water bill payers to as much as £7.5bn. In a blow to government plans for an expansion in the number of reservoirs across south-east England, the heavily indebted utility said a review of the Abingdon project had sent the estimated cost of construction from £2.2bn to between £5.5bn and £7.5bn. Only last year, Thames told the Department for Environment, Food and Rural Affairs (Defra) that its assessment of likely costs was 'robust'. But the company has now told regulators that further tests, including of the ground and local waterways, had shown the final bill would be more than twice, and possibly three times, the current forecast. If the reservoir goes ahead, customers will pick up the tab. About half the costs are due to be recovered from Thames Water's 16 million customers across London and the south-east, with Affinity Water and Southern Water customers sharing the rest. Thames customers already face a 35% increase in bills over the next five years under a settlement by the sector regulator Ofwat, while those with Affinity face a 26% lift and with Southern the rise is 53%. The chancellor, Rachel Reeves, has pledged to build nine major reservoirs – the country's first in 30 years – in her determination to take on 'the blockers' opposing construction projects and renew the UK's ageing infrastructure. In an article published in the Guardian this week, she said the government wanted to 'break down the planning system to get Britain building'. Ministers have backed the scheme, which will be capable of holding 150bn litres of water in an area the size of Gatwick airport, after assessments found Thames will need to find an extra 1bn litres of water every day by 2050. Regulators have accepted that Thames Water would be unable to reduce leaks or redirect watercourses to mitigate this extra usage as part of a 50-year plan. Last year, the Abingdon reservoir was designated as a nationally significant infrastructure project and fast-tracked through planning approval without a public inquiry. The move prompted local campaigners to challenge the decision in the high court, but the appeal was rejected last month. Derek Stork, the chair of the Group Against Reservoir Development, said Thames must have known 10 months ago when it responded to a Defra request for more financial details that its costs had risen steeply. Stork, a retired former head of technology at the Atomic Energy Authority, said Thames must also have been informed of the rising costs when it defended the civil action earlier this summer brought by local residents and the countryside charity CPRE. 'We predicted this would happen, but even I am astonished by the increase to £7.5bn,' he said. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The reservoir has proved controversial after Thames Water said it would need to build walls up to 25 metres high to contain the mass of water inside. Local streams that run across the land will also need to be redirected close to homes in nearby villages, increasing the likelihood of local flooding, it is claimed. Most reservoirs are built in natural valleys or on substantial areas of clay, which are in short supply in the south-east of England. Thames Water said the reservoir remained a priority project despite the increase in costs. Nevil Muncaster, the firm's strategic water resources director, said: ''[Today] we published our Gate Three report for our proposed reservoir in Oxfordshire, in line with the regulatory process that we are following for its design and development. 'The report marks a critical milestone in our development of the reservoir. It reflects the extensive work we have done to evolve our proposed design and better understand what it will take to deliver it. 'Working through the development process, we are applying lessons from other major projects in the UK, wherever we are able. This has included providing an update on what we expect the reservoir to cost as early as possible and well before construction, when it becomes difficult to adapt to revisions. 'The reservoir is a critical piece of infrastructure for meeting future water demand in the south-east and remains one of the preferred options in our water resource management plan which sets out our strategy to protect water supply for the next 50 years and beyond.'' Thames has submitted the review amid a desperate struggle to avoid collapse. It has amassed a £20bn debt pile and a deal with private equity firm KKR to inject £4bn of funds to keep the company afloat was abandoned in June. The company's creditors have put forward a rescue plan contingent on regulators agreeing to waive hundreds of millions of pounds in sewage pollution fines. This week it emerged that Steve Reed, the environment secretary, has appointed City insolvency advisers to prepare for the company's potential collapse into a special administration regime (SAR) – a form of temporary nationalisation. It was also reported that if that situation arises, the Hong Kong infrastructure company CKI is a frontline contender to buy the company out of an SAR.
Daily Mail
29 minutes ago
- Daily Mail
Taxman uses AI to snoop on social media posts of suspected tax cheats
HM Revenue and Customs is using artificial intelligence to snoop on suspected tax cheats' social media accounts, it has emerged. The taxman is using AI tools to scour social media posts for evidence of tax fraud and inconsistencies in income. It's the latest revelation of a government body using AI for its decision-making and processes. But if you abide by the rules you won't have to worry about AI snooping on your Instagram posts. The tax office is adamant AI tools are only used for social media monitoring in criminal investigations and with legal oversight. This isn't a new process – AI has been used to monitor social media accounts for 'years', HMRC says. But this fresh revelation has sparked a wave of concern from experts and politicians who say there is a risk AI could get it wrong - and accuse innocent households of evading tax, the Telegraph reports. Tax experts say that this could spark case of mistaken identity if AI is used to collate information about an individual from social media. Plus, there is a risk that accounts could be hacked or fake accounts could be created which could complicate the process. But officials maintains that there are robust checks and balances in place. An HMRC spokesman said: 'Use of AI for social media monitoring is restricted to criminal investigations and subject to legal oversight. 'AI supports our processes but – like all effective use of this new technology – it has robust safeguards in place and does not replace human decision-making. 'Greater use of AI will enable our staff to spend less time on administration and more time helping taxpayers, as well as better target fraud and evasion to bring in more money for public services.' AI is currently used to 'streamline' administrative tasks at the Revenue including internally using chat assistants to allow better access to information and also to summarise calls for advisers so they can cut down the time it takes to wrap up a call. The revelation of HMRC's AI use comes as it is under pressure to close the tax gap – the difference between the amount of tax that HMRC should be raking into its coffers and the amount it actually does. It's thought the use of AI in the Revenue will become widespread on the quest to rake in more money as it was last month revealed AI tools will spread to 'everyday' tax processes. It is hoped this will pull in an additional £7billion for the tax office. One of HMRC's new processes will be using AI tools to identify suspected tax evaders and nudge them to pay what they owe. It says AI tools will allow its staff to focus on more complex work instead of replacing jobs – it says it will hire some 5,500 compliance staff.
Scottish Sun
an hour ago
- Scottish Sun
Rachel Reeves eyes up inheritance tax changes - what you can do NOW to protect your finances
We explain what is happening and YOU can protect your finances DEATH TAX Rachel Reeves is eyeing up inheritance tax changes – what you can do NOW to protect your finances Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) RACHEL Reeves is rumoured to have set her sights on changes to inheritance tax as a way to fill the £50billion blackhole in finances. Parents could be stopped from making unlimited tax-free gifts to kids, under proposed plans. Sign up for Scottish Sun newsletter Sign up 2 Chancellor Rachel Reeves is planning inheritance tax changes Credit: Reuters 2 Currently you can give away unlimited amounts of cash to friends or family members without paying inheritance tax, as long as you do so seven years before you die. The Chancellor is reportedly also considering changing the tapered rate at which the tax is charged, according to The Guardian. Plus, inheritance tax will be charged on pension pots for the first time - a change that was announced in last year's Budget. Rachel Reeves said today that any decisions around taxes will have to wait for the autumn Budget - but what can YOU do now to protect your finances and how does inheritance tax affect your wallet? Read more on tax TAX IT HMRC spying on workers' social media posts in tax crackdown What is inheritance tax? IHT is a 40% tax on your estate when you die. Currently, your estate includes your house, cash savings and any other possessions. Your pension is exempt. You can pass on up to £325,000 in assets before any IHT is due, or up to £500,000 if you pass your property to your children or grandchildren. There is also no IHT due between spouses, and you can leave them your IHT exemption when you die, so they could pass on up to £1million. However, from April 2027, pensions will become part of your estate, which means they will also be liable for IHT. This week Labour also confirmed it will charge inheritance tax on workers' retirement pots even if they die before they reach the minimum pension age, which is currently 55. And from 2026, agricultural and business relief, which protects farms and businesses from IHT, will only apply up to £1million of assets. After this, 20% tax will be due. These changes could see people inheriting large pensions, farms or businesses being pulled into the net. What are the rules on gifting? YOU can currently give away unlimited amounts of money and assets to friends or family members without paying inheritance tax, as long as you do so seven years before you die. If you pass away within seven years then the amount of tax you pay is charged at a tapered rate. For example, gifts that were given three years before you pass away are subject to 40% inheritance tax. But those that are handed over five years before your death are subject to inheritance tax at 16%. How many people does IHT affect? IHT is a big concern for many families, but figures suggest Brits hugely overestimate how many people are affected. A YouGov poll in 2023 found that 31% of people thought their assets would be subject to IHT, while 28% said they weren't sure. In reality, around 5% of estates are impacted, according to HMRC. 'A lot of people are concerned about it when it probably won't affect their family,' said Charlene Young, senior pensions and savings expert at AJ Bell. 'In 95% of cases, no IHT is due whatsoever.' However, the upcoming changes could see more people owing the tax, which has sparked fresh concerns. The number of estates owing IHT is set to double to 10% by 2030, according to government estimates, with around 1.5% more estates impacted because of pension rule changes. Matt Smith, chartered financial planner at Buckingham Gate, said: 'We are seeing people being pulled into the net now who don't feel wealthy, they just see themselves as normal people who have saved diligently.' Who is likely to be affected most by the changes? The people most likely to be impacted by the IHT changes are those inheriting large businesses, farms or pension pots. Mr Smith explained: 'People who have most of their assets in their pension will go from having no liability to having a chunky liability. 'Farms are particularly likely to be affected as they often have expensive assets such as land, machinery and livestock, even if they don't have much actual cash." If you have a modest-sized pension and a typical home, your estate is still not likely to be impacted, particularly if you are planning to leave most of your assets to your spouse or children. For example, if your home is worth £268,000 - the average UK house price, according to Zoopla - and you have a private pension worth £111,700, which is the average pot size, according to Hargreaves Lansdown, you would have £379,700 of assets to pass on. If you left this to your spouse or kids, your estate would still be well below IHT thresholds. 'While plenty of people might be worried about the changes - particularly those who have worked hard to build up big pensions – most people will still remain unaffected,' Ms Young said. Tips and tricks to avoid paying IHT If you, your parents or your grandparents are concerned about IHT, there are a number of steps you can take to protect your assets. Make a will First, you should ensure your money gets to the right place by making a will, according to Ms Young. 'If you die without a will, your estate will fall under the rules of intestacy, which could mean a higher IHT bill. 'This is especially key for couples who aren't married, as unmarried partners will not automatically inherit from one another, even if they have lived together for many years.' Check how to make one in our guide. Get financial advice If you're worried it could be worth speaking to a financial adviser specialising in estate planning. They will ensure you have used all of your allowances and aren't paying more tax than you should. You can find one using - but remember, you will pay a fee. Utilise gifting allowances Until recently, pensions have been used as a way to harbour money to pass it on to loved ones, but experts say it may be more sensible to gift the money now if that was your plan. If your in retirement and income is more than you spend, then consider setting up a plan for utilising gift-free allowances. 'The 'annual exemption' lets you give away a total of £3,000 each year, either to one person or split between several, and you can bring forward unused annual exemption for one year,' Ms Young said. 'Unlimited 'small' gifts of up to £250 per person can also be made, if you haven't already used your annual exemption on the same person.' You can also gift up to £5,000 to a child tax-free or £2,500 for a grandchild if they are getting married. However, families with modest pensions and assets likely won't be affected by the changes, so don't give away any money unless you are sure you can afford to. Get life insurance Another way to ensure your family does not foot an IHT bill is to take out a life insurance policy. Mr Smith said you could use any extra income to pay the premiums, and this will pay out a lump sum to cover your IHT bill when you die. "You basically pay it at a discount, as what you pay in premiums is usually only 40% to 60% of what your beneficiaries would pay in IHT," he explained. Read our guide to getting protection. Invest for your children and grandchildren If you're got children or grandchildren, then you could invest for their future. You can save up to £9,000 a year tax-free into a Junior Isa - they will thank you for this in the future. A £50 a month investment could grow to almost £18,000 in 18 years - a nice chunk of cash for your loved ones.
