Weak new UK car market continues

The new car market was growing before the Brexit vote, grew well after the vote and continued growing after the Article 50 letter.It turned down in April of this year as a result of Tressury  and Bank of England policy.

The Bank has required banks to rein in car loans. The Treasury hit buyers with higher VED on dearer vehicles. The government put question marks over diesel and petrol vehicles leading people to worry about future values. This continued decline was to be expected and I have explained this before on this site.

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121 Comments

  1. Sakara Gold
    Posted October 5, 2017 at 6:01 am | Permalink

    It might be an opportunity for a UK based Elon Musk type entrepreneur to develop and build an electric vehicle for use in our cities. The public hates breathing toxic air and would welcome the choice

    • Hope
      Posted October 5, 2017 at 11:31 am | Permalink

      Grayling and Gove have equal blame in this. A car is the second largest purchase any family or person is likely to have after their home. Why would anyone work hard to buy a car to be told “think carefully” before buying a new car and that diesels will be scrapped! Your govt at a critical moment in our economic history issues these stark warnings, how utterly stupid. Aided by the BoE apocalyptic Brexit warnings and the chancellor spreading doom at every opportunity about Brexit.

      Your party then wants to lynch Boris Johnson for trying to be upbeat about leaving which the lmajority of people voted for! It was alreit for Alan Duncan telling a conference the reason we voted leave was that it was the working class having a tantrum. What a pompous stupid (man ed). He should be sacked.

      • Chris
        Posted October 5, 2017 at 7:47 pm | Permalink

        Your various posts echo what a lot of people are feeling. I share your exasperation and anger at our political class, in particular the “Conservatives” who are governing us at the moment.

    • Richard
      Posted October 5, 2017 at 4:12 pm | Permalink

      Petrol was fine, diesel smells. I’ve never met anyone first hand who is concerned about air quality. I get the impression that Musk’s ideas are only viable in a market distorted by ‘green’ taxes.

      • Lifelogic
        Posted October 5, 2017 at 6:52 pm | Permalink

        Indeed with current technology Musk’s ideas are indeed only viable in a market distorted by ‘green’ taxes.

        Oh and electric cars, in general, use more energy and produce more CO2 than efficient and much cheaper, conventional and hybrid ones.

        • Hope
          Posted October 6, 2017 at 8:01 am | Permalink

          Diesel generators are our back up for electricity under STOR! This is govt policy! You could not make it up.

        • Iain Gill
          Posted October 6, 2017 at 12:35 pm | Permalink

          and distorted by regulation which ignores the pollution in the battery production and end of life disposal, happily pushes some of that pollution to other countries with less strict rules, and does not account for the pollution in the electricity production properly

    • stred
      Posted October 6, 2017 at 5:14 am | Permalink

      Sakara Gold. Did you not know that there have been all electric cars which work in cities for years. One well known one is made in the UK by Nissan. It costs more than a conventional mini, has limited range and the battery costs £5000. There are afew charging points. Why don’t you buy one. They are doing deals, as few customers want a car that has short range.

      Also, did you know that the air is far less toxic than it used to be. Standards set by the EU and UN have been lowered to the point where almost every part of the world, even away from roads has become ‘toxic’. But children of the past were breathing far more toxic air and somehow we survived. Even the PM toxins produced by diesel cars have not increased over the past ten years depite the increased number, as the engines and filters have improved. The amount has stayed flat and the increased levels are only found at some times when winds are low and in roads which are congested, often with buses. This is all available to see on websites produced by DEFRA.

  2. Lifelogic
    Posted October 5, 2017 at 6:07 am | Permalink

    Indeed and similarly the decline in property transaction (particularly the higher priced ones in the South East) is largely due to the absurd up to 15% stamp duty levels from Osborne and Hammond, the taxing of non existent profits on landlords (and thus pushing up tenant’s rents further) and similar bank lending red tape and restrictions pushing up lending margins and restricting money supply.

    The government is, as always, the problem and not the solution – but T May & P Hammond clearly think the complete opposite as we saw in May’s Corbynesque speech yesterday.

    The government can, for example, only build more council houses by taxing others to pay for them – and wasting, probably well over 50%, of the money on bureaucrats and administration in the process.

    Just why should some have to pay for their own housing and pay for the housing of other able bodied people too?

    • bigneil
      Posted October 5, 2017 at 11:32 am | Permalink

      Not only pay for their housing. Add on their benefits. Add on their NHS. Add on their children’s schooling ( complete with translators costs ) etc etc free lives for arriving then sitting down to do nothing. No need to work. . . and the EU wants us to take millions more. Way past madness or stupidity.

      • Ken Moore
        Posted October 5, 2017 at 6:25 pm | Permalink

        I returned from a short break in Latvia on Sunday.

        The Airbus A330 I travelled on was packed with Latvians. Another 2 flights from the Baltics had just arrived – Doncaster airport was so busy I had to queue to get into the terminal building.

        Cheerful boards read ‘Welcome to the Uk border’ and other numerous messages invited me to claim asylum. I almost expected the Uk border staff to roll out a red carpet and offer tea and coffee to the new arrivals such was the gratitude that this rather motley crew had chosen to disembark in the Uk..

        This was in stark contrast to the borders in other Eu countries that are rightly far more business like…

        This was just one Sunday of largely one way traffic from Eastern Europe at one airport. Only the most blinkered politician could see this isn’t sustainable.

        A similar flight from Manchester was also full. I never saw anyone else with a Uk passport. The individuals were mostly young people but also many older people nearing retirement age. How did they all support themselves I wondered…would those that looked unhealthy be eligible for free NHS care?.

        The tragedy is that Latvia is like a ghost town in stark contrast to bursting at the seams Britain – the trains and streets are largely empty and rows of houses lay boarded up. Last yeat 2500 Lavians died and just 1600 new births were recorded.
        The do gooders in the Uk and beyond are literally destroying poorer EU nations with these ridiculous open borders that starve them of workers.

        • Mitchel
          Posted October 6, 2017 at 10:09 am | Permalink

          I read that Latvia is replacing it’s emigrants with Ukrainians desperate to leave their own basketcase-whether they are Ukrainian Ukrainians or Russian Ukrainians I don’t know-but I’m not sure this will be a sensible thing in the longer term.

        • Iain Gill
          Posted October 6, 2017 at 12:36 pm | Permalink

          you should watch the coaches crossing the channel full of Bulgarians

      • Chris
        Posted October 5, 2017 at 7:50 pm | Permalink

        It is a straightforward social engineering project by the EU and UN which they unashamedly promote e.g. Peter Sutherland, Soros, the EC. Our governments have gone along with this too. All part of the New World Order multiculturalism project apparently.

    • Stan Matthews
      Posted October 5, 2017 at 12:58 pm | Permalink

      “Just why should some have to pay for their own housing and pay for the housing of other able bodied people too?”

      Classic “I’m alright Jack” attitude.

      Why stop there? By the same token why should healthy people pay for the health care of those stupid enough to become ill? Why should intelligent people pay for the education of everyone else? Why should we help anyone other than ourselves?

      The answer to your question is because some of us would prefer to live in a society where everyone gets a fair chance to access the basic requirements of a decent society, health, housing, education

      • Narrow Shoulders
        Posted October 5, 2017 at 5:21 pm | Permalink

        But there are degrees Stan and the welfare system has gone too far in its provision for the undeserving.

      • Lifelogic
        Posted October 5, 2017 at 6:56 pm | Permalink

        I did say “able bodied people” – clearly some are not able to work and deserve help but the vast majority are and would do if only state stopped paying them not too.

  3. APL
    Posted October 5, 2017 at 6:12 am | Permalink

    JR: “The new car market was growing before the Brexit vote, .. ”

    The financial credit market was growing before the Brexit vote, but with the looming hike in interest rates announced by the BoE, people are starting to look at their debt obligations in light of a possible up trend in interest rates over the next couple of years.

    Taking on more and more debt doesn’t look nearly as attractive in a rising rate environment as it did when rates were being forced down by the government.

  4. Lifelogic
    Posted October 5, 2017 at 6:17 am | Permalink

    Electric cars are really not yet sensible with current technology – other than perhaps as a second city car. They use more energy (not less) in general (when the full life cycle, generation of electricity, the charging & transmissions losses and manufacturing is fully considered). So why does our silly government push them on to consumers prematurely using bribes and tax breaks stolen off other taxpayers?

    People will buy them without grants when they work and are cost effective.

    Hybrids however can certainly make some sense, particularly in start stop city driving but less so for long journeys where they have little or no advantage. Though they are more expensive and more costly to service and repair.

    • Dennis Zoff
      Posted October 5, 2017 at 11:10 am | Permalink

      Electric cars are a nice dream, which I personally support (manufacturers wet themselves on the possibility of enhanced profits), but the reality is they are expensive vs conventional combustion engines, and more importantly, the infrastructure is way behind. As it stands today, electric cars are impracticable for day to day activities, with high running costs.

      The key issue is battery life, which frankly is still a joke, regardless of the Car manufacturers spin! Once they have sorted the battery out, (requires radical technology development) infrastructure and running costs, then perhaps the interest will grow. At the moment it is still simply a very expensive niche!

      • Lifelogic
        Posted October 5, 2017 at 4:48 pm | Permalink

        Agreed, wait for a good battery do not roll out duff technology now. I cannot help thinking that companies like Tesla are (to put it mildly) rather over valued.

        • Dennis Zoff
          Posted October 5, 2017 at 7:39 pm | Permalink

          When the big players with Government backing start to put some serious skin in the game, then we will see something viable for the average populace. But as you say, until then, they are overvalued play things seeking wholesale acceptance!

          • Diogenes
            Posted October 6, 2017 at 4:53 pm | Permalink

            One problem is that there are very few people interested in research on batteries for electric cars in Britain. From an item I saw here in France, roughly 80 percent of patents related to electric cars are owned by US or Chinese companies.
            Talk about the vision of British entrepreneurs.

      • David Price
        Posted October 6, 2017 at 5:58 pm | Permalink

        The average age of car on the road in the UK is 7.8 years. EV batteries are warranteed to remain at least 80% effective for 8 years. After that time they get repurposed as storage batteries with a warranteed effective life of 10 years giving 18 years minimum usage.

        The key issue is the cost of Lithium and a key factor limiting availability is the length of time taken to extract lithium from salts by evaporation. However a new process has been developed that can extract Lithium Carbonate much more rapidly and cheaply from Petroleum Brine which is produced as a by product of oil extraction and normally thrown away. The process also results in clean water, We’ll have to see what effect this development has on battery prices and availability.

    • Mike Wilson
      Posted October 5, 2017 at 3:33 pm | Permalink

      I read the Toyota Prius is the car of choice of taxi drivers as they appear to be doing 300,000 miles and more on the original running gear. I was in a Toyota garage recently and they were posters up saying something like ‘Bit worried about trying out this new fangled hybrid technology … Toyota has sold over 8 million hybrid vehicles’ (something like that).

      • stred
        Posted October 6, 2017 at 5:27 am | Permalink

        Black cab drivers in London will have to buy the new hybrid cab, costing £56,700 from 2019 and run it on petrol. They will still produce toxins, as does the much cheaper Pius.

    • David Price
      Posted October 6, 2017 at 6:41 am | Permalink

      And yet not a peep from you about the bribes and tax breaks to oil companies and landlords “stolen” from the taxpayers.

      I wonder why?

      Just because you cannot see the value in something doesn’t mean it doesn’t have value and just because you won’t see the costs in something doesn’t mean there aren’t those costs.

  5. matthu
    Posted October 5, 2017 at 6:30 am | Permalink

    Don’t forget the impact of all this talk about the switch to (vastly overpriced, heavily tax-payer subsidised, useless) electric cars and denigration of diesel cars.

    Effectively threatening to rob diesel car owners to profit green energy investors.

    Hardly likely to make me rush out to buy a new car, is it? No, I will just continue to drive the same old car for another 100k miles, thank you very much.

    To my mind, this mad green crap has far more impact on car buyers than BoE policy.

    • fedupsoutherner
      Posted October 5, 2017 at 12:03 pm | Permalink

      Matthu

      Absolutely right!! I wont’ be changing my diesel for a long time. If I travel down to Sussex from Scotland I will have to quick charge a couple of times at least on the way and then where do I do a full charge of say 6-8 hours??? If our visitors don’t have a charging point do I drive to a local garage and then park up to connect to a charger? Then how do I get home while it charges? Bus, taxi etc??? Madness.

      • fedupsoutherner
        Posted October 5, 2017 at 12:04 pm | Permalink

        On the subject of madness I see that the Tory party is considering giving subsidies to on shore wind again. Apparently it’s ok if the community wants it. They haven’t stopped to think about us in Scotland where the communities don’t want it but we get it anyway because the SNP are wind mad. Never mind that wind farms up here are receiving millions to switch off because there are too many. More madness and there was me thinking Mrs May might get some good ideas in her head.

        • Know-Dice
          Posted October 5, 2017 at 4:47 pm | Permalink

          FUS – “SNP are wind mad”, shouldn’t that read “SNP are wind bags”?

          • fedupsoutherner
            Posted October 5, 2017 at 11:16 pm | Permalink

            Great reply Know Dice

        • Lifelogic
          Posted October 5, 2017 at 4:50 pm | Permalink

          Lunacy if they need subsidy do not do it is a good rule.

        • Martin
          Posted October 5, 2017 at 6:27 pm | Permalink

          I am happy with wind farms. When I ask old Tory types,who are encouraged by the Tory press to oppose wind farms, what sort of power station they want I get no answer, especially when I suggest a dirty old coal station next to their back yards.

    • Mike Wilson
      Posted October 5, 2017 at 4:02 pm | Permalink

      … this mad green crap …

      Yes, this desire not to burn filthy oil, it’s just so MAAAAAAAAAAAAAD.

      • fedupsoutherner
        Posted October 5, 2017 at 11:17 pm | Permalink

        Mike

        You have to realise you cannot operate the grid with reliable constant energy using wind farms or solar alone. Fossil fuels have to come into play somewhere along the line. It’s basic science. Without it we’d all be stuck.

  6. Posted October 5, 2017 at 6:33 am | Permalink

    Mrs May’s speech was simply catastrophic, even her kindly husband embraced her in a consoling way at the end. The comments – every single one – on Conservative Home say that her time is now up.
    The Labour blogs are triumphant. The Canary is worth a look too. Mrs May is the dreaded Headmistress and that appeals to “our young people”.
    It all looks very much like Mr Major before Tony Blair or Mr Brown before David Cameron.
    And that is crucial for Brexit, isn’t it?

    • Anonymous
      Posted October 5, 2017 at 10:33 am | Permalink

      To be fair – it is highly annoying that the Left are so self righteous that they feel they can interfere with an important democratic speech in this way, this on top of violent language towards those they disagree with and the hanging of Tory effigies.

      The ‘comedian’ who interfered in her speech is a Lefty. My. How original. How ground breaking.

      Alas this little upstart has managed to change the course of history, and I’m sure that the nerves he caused her had something to do with the cough.

      She has no credibility. The BBC aren’t allowing the ‘strong and stoic’ message to come through. They are literally revelling in this. One can see the joyfulness in the usually sour little Kuenssberg face.

    • Know-Dice
      Posted October 5, 2017 at 10:39 am | Permalink

      “And that is crucial for Brexit, isn’t it?”

      Not sure about that, could be better to have a new face than “Calamity May”…

      Listening to the Brexit debate in the EU parliament the other day, there seems to be zero respect for her in any case.

    • Ed Mahony
      Posted October 5, 2017 at 10:48 am | Permalink

      I don’t think the Tories realise how completely out of touch they are with so many of the young and younger voters (because of Brexit and for other reasons as well). I’ve worked in marketing/advertising and I know how key it is to understand your audience. So many of the Tories, don’t. They sit in political bubbles, discussing their vision for this country, which is quite out of touch with so many of the electorate.

      And they will pay a price for that like they paid for Tony Blair and Gordon Brown getting into power for so long. I’m absolutely sure Labour will get in. But all the evidence is that they will. And if they do, our country, still hit by debt. is going to pay a serious price for that – not just economically, but in terms of plans for Brexit, as well as even the Conservative Party being replaced by some kind central party, like in France, in order to boot out those on the more political extremes of the party.

      • Ed Mahony
        Posted October 5, 2017 at 10:50 am | Permalink

        ‘ I’m absolutely sure Labour will get in’

        – Sorry, i meant i am not absolutely sure Labour will get in.

    • Dame Rita Webb
      Posted October 5, 2017 at 11:21 am | Permalink

      She has been marked as a loser in the same way as Jimmy Carter was when he collapsed while out jogging and George HW Bush was with his bout of nausea next to the Japanese PM. Trouble is it does not matter who replaces her as you can bet the deeds of your house that they will continue with the same ruinous social and economic policies. Its inevitable Labour will replace them, its only a matter of time. They will then destroy the economy and the real problem will be then getting them away from the levers of power via the ballot box.

    • Lifelogic
      Posted October 5, 2017 at 6:12 pm | Permalink

      The real problem was not the frog in her throat nor the childish interruption. It was the absurd socialist content of the speech. I believe in free markets – so here are load of misguided policies to damage free markets, jobs and harm the economy – all over the place. Plus a bit of the David Lammy “I’m a victim” agenda thrown in for good measure.

      • stred
        Posted October 6, 2017 at 5:42 am | Permalink

        I wonder whether anyone ever explains to Mrs May that government green policies are the main reason for the electricity price increase and that, if she caps some tariffs, then the others will go up, or the small energy companies will fail.
        Amber Rudd ought to know this as she was sent to work ar DECC and the late Prof MacKay was there at the time. He did have difficulty explaining how things worked to ministers, so perhaps the facts never were understood.

      • rose
        Posted October 6, 2017 at 9:38 am | Permalink

        For “burning injustices” read “burning ambition”.

        I am not taken in by the inflammatory PC drivel. It is calculated to win Guardian/BBC support in the same way her espousal of homosexual marriage was – when she had previously been in favour of upholding clause 28, against lowering the homosexual age of consent, and against homosexual adoption.

        She has only one principle: how do I ingratiate myself with the people who have the real power? (The UN, the EU, the BBC, the intelligentsia, etc., not the voters, and least of all the taxpayers.)

        What she should be doing is what Boris does: lift people up, unite them, make them feel good, and then say, we can do even better!

        I know he is an unreliable liberal who would probably give an amnesty to 2 millon illegal immigrants but he knows how to lead and he is on our side.

  7. Andy Marlot
    Posted October 5, 2017 at 6:48 am | Permalink

    The government putting question marks over diesel and petrol vehicles is irresponsible and stupid. Electric vehicles are a ridiculous fad that create massive pollution when built, rely on fossil fuel power stations to run them and have a very short life meaning they are hugely expensive compared to internal combustion vehicles. Add to that short range and long charge times and you have the total impossibility of running transport on electric toy cars. Any politically motivate attempt to do so would be a disaster as almost all government decrees are.

    • ian wragg
      Posted October 5, 2017 at 12:12 pm | Permalink

      It’s the same wherever you look. Telling all and sundry that we are to be rid of all carbon burning power stations by 2030, then wondering why no one will build cheap CCGT plants which have a life of around 50 years.
      I run a 47kw gas boiler which costs 2.2pence per kilowatt or about £125 per month in winter. To covert to a similar electric boiler with cost at 15.4 pence per kilowatt would cost £860 per month.
      Is there anyone in the government with just a modicum of common sense.

      • Lifelogic
        Posted October 5, 2017 at 6:59 pm | Permalink

        It seem not, basic arithmetic is beyond them.

    • Mike Wilson
      Posted October 5, 2017 at 4:04 pm | Permalink

      Yet in more enlightened countries you see car ports outside offices, covered with solar panels, with the employees’ electric cars plugged in. Never happen in this country. Too many idiots in it.

      • Lifelogic
        Posted October 6, 2017 at 3:49 am | Permalink

        Gesture politics and expensive greencrap that basically does not work yet with current technology. Do the sums.

    • Lifelogic
      Posted October 5, 2017 at 6:12 pm | Permalink

      Exactly.

  8. alan jutson
    Posted October 5, 2017 at 7:02 am | Permalink

    So Government policy has meant a reduction in the sales of cars, just like Government taxes (stamp duty) have reduced house sales, ref yesterday’s post.

    Thus the two largest purchases made by consumers have been reduced by self inflicted policy changes.

    What next ?

    • fedupsoutherner
      Posted October 5, 2017 at 12:07 pm | Permalink

      Alan

      Yes, JR’s posts recently have been very much against much of what his party are actually implementing. Are they trying to run the country into the ground on purpose or do they want us to feel so hard up we will change our minds about Brexit. I feel there is a secret agenda at work.

  9. agricola
    Posted October 5, 2017 at 7:15 am | Permalink

    I can understand government wishing to rein in the borrowing of money, but other interferences were inept. If there is a problem with vehicle exhaust fumes then solve the problem technically rather than trying to screw up the market. I have read one or two articles suggesting that there are technical solutions. The overbearing inclination on the part of government needs drastic pruning, then perhaps they would not need to borrow so much money to sustain their house of cards.

  10. MikeP
    Posted October 5, 2017 at 7:27 am | Permalink

    Yes you’ve mentioned this before, and yes I and doubtless many others agree that Government policy is greatly to blame. So I hope the Chancellor has been reading and listening, otherwise it could be as industrially and economically damaging as the rundown of the mining industry

    • ian wragg
      Posted October 5, 2017 at 12:16 pm | Permalink

      You forget that the Chancellor is a rabid remainer and will use all the downturns to blame Brexit.
      No doubt his budget will raise taxes again so he can say Brexit has made it necessary.

  11. Newmania
    Posted October 5, 2017 at 7:39 am | Permalink

    None of the factors you mention have in the past caused this sort of slow down and investment has collapsed

    I look forward a non stop diet of Just So stories along these lines

    ” How the Country Got Its Recession “

    • Anonymous
      Posted October 5, 2017 at 10:37 am | Permalink

      The Bank of England set alarm bells going about teenage car salesmen printing money in the economy – just like mortgage lenders did prior to 2008.

      The recession has always been with us. It’s just been hidden under a blanket of cheap credit.

      PS, house on the market yet ? You going to sell it for top dollar while you still can ?

    • ian wragg
      Posted October 5, 2017 at 12:21 pm | Permalink

      Rubbish as usual, some years ago when the government gave notice of the end of mortgage relief for new mortgages, there was a stampede to buy followed by a large reduction in sales.
      The government is nearly always the problem when it comes to recession.

  12. Bryan Harris
    Posted October 5, 2017 at 7:39 am | Permalink

    I really am wasting my time trying to join in the discussions – either my posts get deleted or ignored – or approved so late that nobody else sees them

    • Anonymous
      Posted October 5, 2017 at 10:39 am | Permalink

      You’re not the only one, Bryan Harris. The difference is that the rest of us understand this is an amateur blog run on a voluntary basis and don’t complain.

    • Know-Dice
      Posted October 5, 2017 at 10:41 am | Permalink

      You are not the only one – dodn’t forget it is Conference season though…

      The problem with this Blog style posting, comments do disappear off the bottom of the page quickly vs. forum style…

    • Dame Rita Webb
      Posted October 5, 2017 at 11:28 am | Permalink

      Consider it a badge of merit. We say stuff here months ahead before the pundits on TV and politicians start talking about it. If JR is not publishing your comments you are obviously hitting a raw nerve.

    • Bob
      Posted October 5, 2017 at 2:35 pm | Permalink

      @Brian
      I always enjoy your contributions.

      As far as delay in publishing is concerned, since the referendum our host has been very tied up fighting against backsliders, and he insists on doing the moderation personally because he wants to maintain standards. I suppose you could say it’s a downside of Brexit.

    • A.Sedgwick
      Posted October 6, 2017 at 8:04 am | Permalink

      I make a contribution to give an opinion to an MP, who I rate, if he chooses to publish or ignore is irrelevant to me.

  13. Posted October 5, 2017 at 7:55 am | Permalink

    John,

    More importantly, If you look at the Bank Of England’s sectoral balances

    http://www.bankofengland.co.uk/research/Documents/workingpapers/2016/swp614.pdf

    If Hammond keeps on reducing the budget deficit then he keeps on reducing our private sector ” sterling savings” and foreigners ” sterling savings” so on aggregate it increases private debt.

    As the budget deficit = everyones ” sterling savings” to the penny which is not ideological or political but accounting fact. Then household debt to GDP will just keep on rising and household debt to personal income and less cars will get sold and retail sales will fall.

    Lidl and Aldi will continue to keep having a field day.

    The key to reducing the budget deficit is to leave domestic private savings alone but reduce the external sector ” sterling savings”. However, as far as I can see after reading 100’s of economic papers is there is no way to do that.

    It’s not right that German car manufacturers can sell us their cars and then just park their ” sterling savings” at the BOE earning interest and not buy UK goods and services with it.

    As far as I can see there is only 4 options we have

    1) Taxation is one option.

    2) Cancellation is another.

    3) 30 days notice to spend it on UK goods and services or lose it.

    4) Or you can accommodate the ” Sterling savings” via the UK government purchasing the goods and services the exporters to the UK doesn’t want to buy. Then deploying it for the public good and public purpose.

    Number 4) would be the common sense approach.

    • Edward2
      Posted October 7, 2017 at 7:40 am | Permalink

      German car makers don’t park their money from UK sales in the Bank of England.
      Car dealers in the UK have to pay the manufacturer for the vehicles they sell and the money ends up in their bank accounts wherever that manufacturer is situated in the world.

  14. Geoff not Hoon
    Posted October 5, 2017 at 7:57 am | Permalink

    Since my time (and your’s) in the motor industry two things have happened. Buyers are getting older and trading down in size and have been for some years. Secondly the lease/hire deals available based on bullish residual values mean those people without hard cash find it simple to keep rolling over to new vehicles on monthly terms. With electronic this and that the days of nonfranchised repair shops working on vehicles are almost history leaving clients with cars out of warranty at the mercy of very very high labour costs for the simplest thing.
    Unless the finance deals are removed or their terms considerably tightened the sales will return to c.2m within a year or so. Only MHO.
    How nice if we could get back to the days of cash is king when a dealer would give discount for a cash sale.

    • Anonymous
      Posted October 5, 2017 at 10:42 am | Permalink

      Dealers want you to sign up to a credit deal. They have become vehicles (‘scuse pun) for finance.

  15. Chris
    Posted October 5, 2017 at 8:01 am | Permalink

    It would appear that they lack clear heads at the Treasury, and also common sense. More importantly, they do not seem to be keen to enact Conservative policies but instead seem intent on emulating Comrade Corbyn.

  16. Duncan
    Posted October 5, 2017 at 8:08 am | Permalink

    The BOE is pro-EU. The Treasury is pro-EU. Hammond and May both pro-EU. It would not surprise me at all if these, I don’t want to express my true feelings for fear of being banned, people are deliberately trying to create a set of circumstances that turns people against Brexit

    They played the race card to tarnish people and force them to vote Remain, which didn’t work but they use it anyway as a political tactic

    These pro-EU forces will stop at nothing to undermine the process of Brexit and its eventual conclusion

    I am convinced that unless Tory Eurosceptic MP’s force out May and Hammond and replace them with people true to Brexit then we will forever remain tied to the EU in both a legal and constitutional sense

  17. formula57
    Posted October 5, 2017 at 8:31 am | Permalink

    “The Treasury hit buyers with higher VED….”.

    Perhaps part of the solution is imposing a price cap on rip off government?

    • Bob
      Posted October 5, 2017 at 2:48 pm | Permalink

      @formula57

      “Perhaps part of the solution is imposing a price cap on rip off government?”

      what a fantastic idea!

      • Lifelogic
        Posted October 5, 2017 at 7:04 pm | Permalink

        Indeed say 20% of GDP then the government would have an interest in increasing GDP rather than just strangling the economy.

  18. Edward2
    Posted October 5, 2017 at 8:47 am | Permalink

    In addition to the negative moves made by Government affecting vehicle sales, we have several city councils threatening to ban some types of vehicles from city centres all together.
    Their warning which comes without any detail attached, has led to many businesses and individuals holding back on decisions to replace their current vehicles until they know what the rules are going to be.
    Presumably their own fleet of old buses and refuse lorries and the elderly taxis they licence will be exempt.

    • Bob
      Posted October 5, 2017 at 2:50 pm | Permalink

      “their own fleet of old buses and refuse lorries and the elderly taxis they licence will be exempt.”

      but of course, you can’t expect them to abide by their own rules.

  19. Bob
    Posted October 5, 2017 at 9:09 am | Permalink

    According to BBC Radio 4 the decline is largely due to Brexit.

    The BBC have been encouraging people switch from private cars to public transport and bicycles in order to prevent global warming. They must be delighted.

    • Anonymous
      Posted October 5, 2017 at 10:45 am | Permalink

      Indeed. Less consumption should please the BBC Environment editor.

    • Mark
      Posted October 5, 2017 at 1:58 pm | Permalink

      So they think their propaganda doesn’t work?

  20. oldtimer
    Posted October 5, 2017 at 9:18 am | Permalink

    The SMMT says that September car sales were down 9.3% on September in the prior year. That is significant. Are the Treasury and the Bank of England seeking to contrive a recession which can be blamed on Brexit?

  21. James Neill
    Posted October 5, 2017 at 9:22 am | Permalink

    A lot of other things are out of kilter to in this country, so I don’t know why you’re picking out the car market as being something special. Truth is, ever since this brexit thing has come about government is transfixed and seems to be caught in the headlamps, frozen, unable to move in any direction.

  22. Lifelogic
    Posted October 5, 2017 at 9:24 am | Permalink
  23. Dennis Zoff
    Posted October 5, 2017 at 10:02 am | Permalink

    Absolutely correct. All down to the Government meddling again! We blame the EU for many of our ills, but Westminster was doing a cracking job of similar meddling excesses, long before the EU became megalomaniacs!

    Incidentally JR, can you please point me to a time when a UK Government has positively produced something that has been beneficial to UK citizens….my memory fails me on this subject?

    • Bob
      Posted October 5, 2017 at 2:54 pm | Permalink

      ” something that has been beneficial to UK citizens”

      mass immigration.

      • Dennis Zoff
        Posted October 5, 2017 at 8:02 pm | Permalink

        Mass (uncontrolled) immigration.

        In this case…..my memory “does not fail” me on such a negative subject?…unless you are insinuating it is a benefit?….. and not being satirical?

  24. stred
    Posted October 5, 2017 at 10:16 am | Permalink

    The anti internal combustion engine campaign by green NGOs has been swallowed by politicians across Europe. Countries which manufacture and use mainly diesel cars have taken a more balanced view but the UK and others have allowed misleading statistics to give the impression that we are living in hugely increased pollution and this is causing thousands of deaths every year- 40k in the case of the UK. In fact, air pollution in the case of PMs and NO2 has greatly reduced over the past 20 years and roadside pollution exceeds new standards because standards have been lowered. mayor Khan has just started referring to WHO standards, which are even lower than EU levels and saying that all of London exceeds these and is planning the next bans. Yet their own figures show that most of PM pollution in Outer London drifts in from ouside the area. Their own documents also show that his planned ULEZ reductions in traffic pollution will only extend estimated life spans by weeks and days.There is a total lack of proportionate response from regulators.

    However, this and Gove’s moronic announcement that electric cars only will be allowed has lead buyers to delay purchases and keep their diesel cars, which are now worthless and cannot be traded in for new slightly less polluting vehicles. Hard luck for the car industry, but Mrs May seems to think her backing of electric cars will allow us to overtake the Japanese and Germans. We should have been laughing at this instead of her cough and sign problems.

  25. Ed Mahony
    Posted October 5, 2017 at 10:23 am | Permalink

    The Society of Motor Manufacturers and Traders (the trade association for the UK motor industry) blames ‘political and economic uncertainty’ as primary cause. No mention of the Bank of England.

    Source: https://www.smmt.co.uk/2017/10/demand-new-cars-declines-september-consumer-business-confidence-falls/

    I’m only trying to report facts that could help prevent our country dipping seriously, economically, over time, because of Brexit, with lots of unintended consequences like the socialists getting into power, our Conservative Party being replaced by a new centre party like in France, and we have to re-join the EU with even worse conditions that before.

    All the evidence, more and more, is pointing to Brexit lacking the leadership, strategy, and legs to make it through 20 years of economic decline (before things begin to improve, again, overall, economically).

    Reply If it was Brexit causing problems why did the car market do so well June 2016 to March 2017?

    • Ed Mahony
      Posted October 5, 2017 at 10:38 am | Permalink

      ‘If it was Brexit causing problems why did the car market do so well June 2016 to March 2017?’

      Firstly, let’s focus more on the evidence where people have had time to reflect more on the reality of Brexit and how things have panned out since the euphoria of the Referendum result.

      Secondly, let’s focus on what the SMMT have to say.

      Sorry, to rock the boat but I love my country. I’m only trying to stop the boat going into waters where we’ll be rocked by elements outside our control, and we might have to return to port, battered and sinking.

      (And we’re still only in the Phoney War stage of Brexit. We haven’t left the EU yet).

      I keep looking for positive signs for Brexit (in particular, at what Lord Dyson has to say). But the evidence seems to be shrinking all the time (but I’m open to persuasion and willing to have my opinion changed if the evidence and argument is there). I just seem to get a lot of wishful thinking and how evil the EU is (which i agree to a degree, but it’s also exaggerated for ideological reasons from people in Brexit, wanting to throw the baby out with the bathwater).

      Lastly, history is full of disasters and failures because people take polar positions, instead of being objective and pragmatic about the course of events, and looking at the pros and cons of a situation as things progress.

      • Dennis Zoff
        Posted October 5, 2017 at 8:06 pm | Permalink

        (but I’m open to persuasion and willing to have my opinion changed if the evidence and argument is there)

        …..but you are not, regardless of any positive Brexit evidence! You are only ever seeking a negative narrative! Please be honest?

    • Dennis Zoff
      Posted October 5, 2017 at 11:36 am | Permalink

      Oh my god, car sales are down for less than one quarter because of Brexit!…..we are all gonna die!

      Overly dramatic perhaps…but, I just wanted to know how it feels to be a Remainer for a moment?

      Conclusion: rather satisfying and relieved we are leaving the EU, before a real recession crisis kicks in, from EU excesses!

    • Mike Wilson
      Posted October 5, 2017 at 4:13 pm | Permalink

      Reply If it was Brexit causing problems why did the car market do so well June 2016 to March 2017?

      Because the hysteria about Brexit grows daily and, to be quite honest, the way your government is carrying on, the hysteria will keep increasing until no-one is buying anything and all we do is save waiting for whatever is coming.

      Lucky shot that time. Choose all images with a store front – in Spanish too! Wasn’t sure about one of them but got lucky. Only had to do it once.

      You do realise it is very easy to count how many times a request to a web server takes place from the same IP address and lock the IP address out if repeat attempts (automated attempts) are made to post data. Of course one can change one’s IP address by rebooting one’s router, but that is a fag and no automated system is going to do that every, say, 3 attempts to post data.

  26. Billyg
    Posted October 5, 2017 at 12:30 pm | Permalink

    People shouldn’t be buying cars if they cannot afford them. Finance for the purpose of buying cars should be restricted to people who can afford and who are in need..it’s time we reined in all of this borrowing and started to pay back outstanding debt.

  27. ian
    Posted October 5, 2017 at 12:56 pm | Permalink

    By the time MPs political uni advisor have finished, there be fining and banning electric cars as well. Not a lot of point talking about politics and party these day. because they are all over seem by uni political advisor who writes all the speeches and come with all the ideas that MPS follow to the letter, so when you vote for MP now your really voting for their advisor who makes all of the decisions.

  28. Ed Mahony
    Posted October 5, 2017 at 1:12 pm | Permalink

    It’s now transpiring that countries outside the EU, including the US and Canada, are now rejecting Britain’s proposed import arrangements for crucial agricultural goods such as meat, sugar and grains after Brexit.

    (Not forgetting how the US has behaved over Bomardier and jobs in Northern Ireland)

    Another unintended consequence of Brexit. The reasons against Brexit are just stacking up more and more. And we haven’t even left the EU yet.

    • Diogenes
      Posted October 5, 2017 at 7:23 pm | Permalink

      Maybe a topics for JR’s Friday post?

    • Mitchel
      Posted October 6, 2017 at 10:28 am | Permalink

      Then we should start to establish relations with the Mr Putin’s Eurasian Union.I’m sure we would get good terms as the value to them of splintering a West(that is disintegrating anyway) would be worthwhile.

  29. Theresa Mary May
    Posted October 5, 2017 at 1:15 pm | Permalink

    Too many of my Comments are “Awaiting Moderation” on your blog or simply disappear.

  30. ferdinand
    Posted October 5, 2017 at 1:16 pm | Permalink

    I have just heard a person on the BBC from Warwick University claiming that the downturn in the car market is due to Brexit, and he said it several times. He made no mention of why Brexit – which hasn’t occurred yet – could have caused this. He did mention a falling pound. As you say finance and diesel pollution are the main forces acting downward on the market. Where do the BBC get these pundits from ?

    • Lifelogic
      Posted October 5, 2017 at 6:18 pm | Permalink

      The BBC have endless lefty economists, experts, green crap pushers, EU fanatics, dopey academics and the likes to call on. Some many ex-BBC employees like Paul Mason and Stef. Flanders. I assume they keep them in the basement somewhere where they have their lefty brain washing machines.

  31. Ed Mahony
    Posted October 5, 2017 at 1:41 pm | Permalink

    Sorry, Mr Redwood. I don’t want to appear negative. But i am genuinely concerned by Hard Brexit and Cliff Edge. It’s about my country. And it’s about my family and friends. I’m happy to be persuaded that things will be fine. But the evidence to me, at moment, is that we won’t be if we carry on with Hard Brexit. I’ll stop commenting. But i think our best move forward is to pull right back from Brexit and pay off our debts and build up our economy and try and reform the EU (with a weakened Merkel, this could now be more possible). The EU won’t budge. They’re scared of the EU unravelling. And once we’ve built up our economy, really prepared well for Brexit, and have a strong leader in place to unite the country around Brexit and implement something as complicated as a ‘moon landing’ then we can re-think about Brexit.’
    Best wishes.

    • Ed Mahony
      Posted October 5, 2017 at 1:44 pm | Permalink

      ‘The EU won’t budge’ i mean on the UK not paying a high price for access to the single market. But i believe it would budge on reform. Because many people in the EU want reform, and Mrs Merkel is now much weaker than before.
      Regards

    • Na
      Posted October 5, 2017 at 4:40 pm | Permalink

      But i think our best move forward is to pull right back from Brexit and pay off our debts and build up our economy and try and reform the EU

      >
      Is Ed Mahony really Mr Cameron is disguise?

      There comes a point where we have to admit the EU cannot be “reformed” anymore than Babylon could in the book of Jeremiah and God said the ONLY option was to flee! (And not look back).

      • Ed Mahony
        Posted October 5, 2017 at 5:41 pm | Permalink

        I’m way too thick academically, and in other ways, to be Mr Cameron but thanks for the compliment ..

        God cursed Egypt under the Pharaoh and then blessed the kingdom again under the stewardship of Joseph ..

        With smart stewards such as John Redwood, Ken Clarke (and Mrs May, Boris, and others) working together, with the right approach, the EU could be reformed.

        ‘We’re all in the gutter. Some of us are looking up at the star.’ – Oscar Wilde.

        • Lifelogic
          Posted October 5, 2017 at 6:26 pm | Permalink

          Cameron was quite rather……. Had he had a sound sense of direction – low taxes, get out of the EU and cut the green crap he would have won both of his sitting duck elections very easily and would be about to win another.

          Instead he pretended to be a low tax EUskeptic Conservative but was nothing of the sort. He was a good presenter but with a broken compass. May is even worse.

        • Dennis Zoff
          Posted October 5, 2017 at 8:30 pm | Permalink

          “Lord Darlington. No, we are all in the gutter, but some of us are looking at the stars.’

          The quote comes from Oscar Wilde’s play “Lady Windermere’s Fan”.

          Question: did Oscar Wilde write this before or after he left prison. Would make a marvellous metaphor for leaving the EU!

          Ed, don’t be so fearful!. Have courage and look forward to the future. The world is not going to collapse when we leave the EU, but may if we stay?

    • John
      Posted October 5, 2017 at 6:24 pm | Permalink

      Where were you on the Referendum campaign where all the arguments for and against were set out and the Leave campaign slam dunked it!

      Stop re running the referendum campaign and move on. Soon 90% of world trade will be outside the EU. The average wage in the EU is about $2000 lees than the rest of the world and that’s based on the UK in it.

  32. Prigger
    Posted October 5, 2017 at 2:16 pm | Permalink

    The media, naturally for once, is going wild on speculation Mrs May will resign. The main problem for the Tory Party it is more than likely will elect a person even worse in electoral terms. Someone like Amber Rudd. Yes she seems the the election loser Tories will choose. The Tories by their ill choice for PM have betrayed the Country even more than Corbyn will do.

    • Leslie Singleton
      Posted October 5, 2017 at 9:02 pm | Permalink

      Dear Prigger–We all know May lost the Election out of thin air primarily through various manifestations of execrable (lack of) judgement, and no other reason, so I see no reason for her proposed changes to picayune domestic policy (most of which I just plain disagreed with anyway as nowhere near reflecting Tory “values”)–We are at War over Brexit and, like Asquith in WWI (replaced by Lloyd George), May, although in some ways a jolly fine sort of chap, is no War leader–Think Churchill as well of course who, though he made errors, very definitely did get the country on a War footing–May is so terribly ineffective — Whatever anybody wants to say about Boris, he would galvanise some action and people would start to sit up and pay attention under him — He might even just tell the EU to go hang themselves

  33. Ken Moore
    Posted October 5, 2017 at 2:56 pm | Permalink

    Mrs May is a technocrat better suited to back office policy matters. She is not an inspiring communicator and her recently difficulties were caused because she cannot handle the pressure. She doesn’t have the sort of empathy and understanding of the nation necessary to move the party forward.

    It’s harsh but front line politics is a tough game – she has had her go it’s time someone like Dr Redwood made a move to put potential Conservative voters and her out of our collective misery.

    • Dame Rita Webb
      Posted October 5, 2017 at 4:54 pm | Permalink

      Sorry but Mrs May’s CV disallows her from being given the dictionary definition of a “technocrat” . Her time at the Home Office should have warned the Conservatives of her unsuitability for the top job. She only fails to take the award of Britain’s worst PM from Blair and Cameron because she has not led the UK into yet another foreign policy disaster.

      • rose
        Posted October 6, 2017 at 9:50 am | Permalink

        If we are left shackled to the EU, paying through the nose, and accepting unlimited immigration and ECJ judgements, but without influence, that would be a foreign policy disaster.

  34. roger
    Posted October 5, 2017 at 3:22 pm | Permalink

    Perhaps then I may be allowed to mention the BoE which yesterday stated that unless Brexit negotiations reached an agreement on certain points by Xmas then Bankers in general would trigger planned re locations to offices in the EU.
    Yet another example of the arch remainer Carney ‘s blatant attempts to derail Brexit and encourage the EU in their preposterous demands and increasingly contemptuous treatment of the UK.
    Watching the continued humiliation of the sycophantic Cameron in office was embarrassing enough, but TM ceding on every point shames not only her and her conservative government, but shames us all.

  35. Mike Wilson
    Posted October 5, 2017 at 4:09 pm | Permalink

    Well, my car is 5 years old and had done 48k. I have an extended warranty for another two years. I will keep it at least another 5 years. Maybe by then it will be clear what is allowed and what isn’t. Very pleased I bought a petrol engine car last time. Big family estate car, still does almost 40 to the gallon though.

    How inane does this reCaptcha nonsense have to be? Select all squares with vehicles. Okay, did that. Can’t imagine how some sort of auto completer of forms could do that within 10 seconds – but that’s not enough! Oh no! Do it again. Utter idiocy. There are much better ways of doing this.

    • Lifelogic
      Posted October 5, 2017 at 6:20 pm | Permalink

      Surely it only need to be done once or twice for each name and email combination and not every time?

      • matthu
        Posted October 5, 2017 at 8:39 pm | Permalink

        Certainly only once for each IP address, name and email address.

        You get the feeling the program is using your undivided attention to benchmark a couple of extra pictures at the same time.

        Here goes … store fronts!

      • fedupsoutherner
        Posted October 5, 2017 at 11:29 pm | Permalink

        L/L and Mike

        I never have to do the caption bit. Just tick on ‘Im not a robot’ and then post comment.

  36. Prigger
    Posted October 5, 2017 at 9:08 pm | Permalink

    Mrs May is looking more like Monty Python’s dead parrot than the dead parrot. Has she no shame? Anyone else would know their own limitations by now and gracefully resign. Must she be thrown out with the bottom of cage litter?

  37. The Prangwizard
    Posted October 5, 2017 at 9:10 pm | Permalink

    If Doris hadn’t dithered after the referendum and got on with sending the notice we wouldn’t be in this appalling situation. Yet she continues to dither and appease our opponents and enemies by giving way to their threats which will benefit us not at all. She is helping them.

    The country is suffering grievously. Tory MPs are in the main too wimpish to speak out.

    Please will someone throw a metaphorical brick or two at the PMs window to get her to deliver Brexit as initially promised before people start throwing real ones. I’ve never been so insensed at the ineptitude of our leadership and their obvious contempt for we the people.

  38. DaveM
    Posted October 5, 2017 at 10:34 pm | Permalink

    OT.

    Seriously John, how much longer are you going to carry on with the current front bench? I’ve been part of my organisation for 26 years and am totally loyal to it, but if the people at the top were tearing it to bits the way the four great officers of state are, I would have to do something about it or go elsewhere. You must be crying inside.

  39. A.Sedgwick
    Posted October 6, 2017 at 8:29 am | Permalink

    After 3 years pure battery cars are worth 20% of their purchase price, so it is not unrealistic to say within 5 years the worth is scrap.

    Generally new cars are vastly overpriced, the personal finance deals have papered over the cracks in the market. The development of gadgets and gizmos over simple, reliable vehicles will not fool people forever. As everyone, except the green nuts, seem to know current battery technology is hopeless, in fact not much has changed since the milk floats I grew up with.

  40. Lindsay McDougall
    Posted October 9, 2017 at 12:41 am | Permalink

    The Bank of England and the Treasury are not working together, are they? The Bank of England has pursued an ultra-loose monetary policy for years. Now it and the Treasury are belly-aching about the consequences without acknowledging the Bank’s culpability. If Mr Hammond doesn’t like it, he should request Mr Carney’s dismissal and be willing, nay eager, for the Treasury to take over responsibility for monetary policy again.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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