The boss of one of the largest automotive retailing groups in the country has warned that Government policies are hurting the car market.
Robert Forrester, chief executive of £5bn turnover Vertu Motors, used a speech to single out the impact of the Zero Emission Vehicle target and proposed VAT levy on Motability vehicles for disabled people could harm supply and jobs. The outspoken executive has previously criticised ZEV mandate for "wreaking havoc" in the industry.
In his speech to The London Press Awards he said: "The policy had started to result in the rationing of new petrol vehicles, well before the well-publicised ban comes into effect. Governments of both colours supported environmental rules that favour electric vehicles, doing so because of the eco-zeitgeist rather than practical reality. It was difficult to push back against this without being wrongly labelled a climate change sceptic."
In unaudited interim results for the six months to the end of August, Vertu saw an 82% increase in battery electric vehicle sales - outpacing the market growth of 55% - which it said was aided by cheaper vehicles and Government grants. However, at the time Mr Forrester told BusinessLive at there is "no way, at all" the industry was going to hit Government targets between now and 2030 - risking fines for manufacturers and more market disruption.
Following speculation that the Government could scrap tax breaks for users of the Motability scheme, Mr Forrester said such a move could add £6,500 to the cost of a car for people with disabilities. Around 860,000 people currently use the scheme.
He said: "Car ownership is subject to tax at every point: VAT on purchase price, registration fees, luxury car tax on modest cars, vehicle excise duty, company car tax, VAT on fuel and then fuel duty on top, road tolls and parking charges, if that is not enough the Government seems to be considering a new tax. Let’s call it what it is; a Motability tax, or a Blue Badge Tax.
"Instead of tackling the real problem of who qualifies for the subsidised cars for disabled people, we are hearing about an extraordinary policy to levy VAT on the vehicles – a Blue Badge tax which could increase what the car costs by an average of £6500. This would force disabled people to choose the cheapest models or abandon them altogether. Some disabled people need more complicated cars, such as estates or larger hatchbacks.
"The idea has industry consequences too; it would increase the cost of the cars, which would reduce the numbers ordered, which would reduce the numbers manufactured in the º£½ÇÊÓƵ costing jobs, and also leading to a reduction in cars entering the second-hand market later, thus increasing the cost of used cars in three years time."
