Getting the UK electric vehicle sector into the fast lane

British car manufacturing history is dominated by iconic vehicles like the original Mini and the Jaguar E-Type. Both are recognised and associated with British manufacturing across the world. The only electric vehicle (EV) produced in the UK is the Nissan Leaf, not a brand high on the list of cars people know Britain makes. Nor do people see the UK as a leader in the EV revolution, that credit goes to California, the birth place of Elon Musk’s Tesla.   

The Prime Minister, Theresa May, wants this to change by “cement[ing] the UK’s position as a world leader in the low emissions and electric vehicle industry”. This aspiration has been joined by a commitment from Environment Secretary, Michael Gove, to phase out fossil-fuelled car sales in the UK by 2040. Unfortunately, neither will be enough to put Britain in the lead. But moving forward the ban on petrol and diesel cars ten years, from 2040 to 2030, would be a game changer.  

We need a strong EV market at home

The UK is somewhere in the middle of the pack in the global EV market. In 2017, Germany overtook us for the first time in EV sales, and China manufactured over half of all EVs worldwide. At the same time, other countries are committing to more rapid phase-outs of fossil fuelled cars, with Norway planning a 2025 phase out and Scotland setting a 2032 target. A 2030 UK target would help to strengthen the domestic market, supporting UK based EV manufacturers to grow and bringing down costs.

Green Alliance has quantified the benefits. More rapid phase out of petrol and diesel vehicles will have health and environmental benefits: cutting carbon dioxide emissions, air pollution and noise pollution. Economic upsides would be a reduction of the UK automotive trade deficit and halving oil imports by 2035. Estimated oil cost savings associated with a drop in vehicle imports could be as high as £6.63 billion a year by 2035.    

A twin track approach to phase out by 2030

2030 is only 12 years away, so the UK needs to move quickly. We propose a twin-track approach to get there building on two key cost points: whole life and upfront costs.

The first track focuses on shifting government and private fleets from internal combustion vehicles to EVs, until EVs achieve upfront cost parity, expected in 2022. EVs are already cost effective for fleet managers who can take advantage of their lower lifetime operating costs. Private fleets make up over half of all new sales in the UK, and it is estimated that EVs could save company car owners £7,400 over three years.

Once upfront cost parity has been reached, the focus can shift to the second track, managing the phase-out of diesel and petrol cars run by the wider population. By introducing a zero emission vehicle (ZEV) mandate, domestic manufacturing can be aligned with demand. If this mandate is combined with clean air zones, similar to London’s ultra-low emission zone, it will help to boost EV sales among those driving into cities regularly.

Whether all of this means the world will start to associate Britain with EV manufacturing remains to be seen, but it would be an excellent start for a nation aspiring to lead the revolution.

Bente Klein is a Policy Assistant at the environmental think tank Green Alliance

The views expressed in this article are those of the author, not necessarily those of Bright Blue

Putting the environmental sector at the heart of the Government’s industrial strategy

One of the driving ideas at the heart of Theresa May’s vision for Britain is the rebirth of a term that since the 1970s has been rarely uttered by those in government – industrial strategy. Backed by the creation of a new department, the Department for Business, Energy and Industrial Strategy, and championed by its Secretary of State, the Rt Hon Greg Clark MP, the foundations were laid out in the ‘Building our Industrial Strategy’ Green Paper published at the beginning of this year. The Green Paper mandates the need to “build on our strengths and extend excellence into the future”. As the leading trade association for environmental technology and services, at the Environmental Industries Commission we contend that the UK’s environmental sector is a strength to be built upon, and therefore should be central to the industrial strategy.

The environmental sector is one of the UK’s fastest growing. In the decade since EIC was formed in 1995 the value of the sector has grown tenfold – from £13 billion to £124 billion in 2015. Between 2010 and 2014 it grew by 11% compared to the 7% growth seen by the economy as a whole. It provides 373,000 largely skilled jobs, and contributes 1.6% to GDP with £29 billion of value added to the economy – more than pharmaceuticals or aerospace. The growth of the sector is all but guaranteed, as it is largely driven by Government initiative, and there is now a consensus across the main parties that climate change and the health of the environment in general are essential issues. For instance, the current commitment to combat poor air quality across the country will spur the growth of the air quality management sector, while the necessity to build new housing on brownfield land boosts the contaminated land remediation sector. 

The global market also poses a great opportunity for UK environmental business. The expanding middle-classes of emerging powers such as India and China necessitate governments to clean up their environments. The UK has both the expertise and innovative technology solutions required to meet some of that demand, but at the moment we aren’t doing enough to promote ourselves. UK environmental exports currently total 0.6% of the $1 trillion global market and even without increasing our share we predict 26,640 new jobs will be created by 2025. Increase that share by 50% and 40,000 new jobs will follow.

Despite the existence of world-class research and expertise in this country, there is still much room for improvement, and in relative terms the UK lags behind nations such as Finland, Denmark and Ireland. These nations have burgeoned the growth of their environmental sectors through government backing for research and development, and support for early-stage green investments to help pioneering technology reach the market. In Denmark’s case, 3% of GDP is invested in research and development, while $657 per capita is allocated for early-stage green investments (as in Ireland), compared to the UK’s $163.  In Finland, a 2012 strategy made ‘cleantech’ one of the four focal points of Finland’s economy. This included the setting up of a Cleantech Finland board, headed by their Prime Minister and including ministers, business leaders and key civil servants. Finland also prioritises the promotion of its green technology in all its international influencing activities.

We represent many small environmental technology firms that have come up with ingenious ways to deal with a plethora of environmental challenges. As amazing as this technology is, it often doesn’t get the market exposure it deserves. We are doing our part to promote our members’ work in Government and beyond, but the green industry also needs the firm backing of Government, whether that’s through early stage investment through bodies such as Innovate UK, favourable economic policy instruments that support the growth of green business, or by better promoting the sector for export.

By setting out an environmental industrial strategy, the Government can fight on two fronts – supporting the green industry is both economically sound and would help the UK, and by extension the world, to be more effective at tackling its environmental problems and building a sustainable future.
Sam Ralph is the Policy Executive at the Environmental Industries Commission, the trade association of the environmental services and technologies sector

The views expressed in this article are those of the author and are not necessarily shared by Bright Blue

Three ways product design can reduce poverty overseas

One day, your smartphone will probably be recycled by a teenager on a rubbish tip; perhaps in Ghana or Nigeria. Months before that, it will likely have been repaired and sold on by an entrepreneur in the same country.  The health and livelihoods of these women and men depend on the way we design our products in the EU – the toxic chemicals we permit and the ease of repair that we require. 

Most of the electronic goods we dispose of eventually end up in developing countries (for computers, the figure is 90%). Most of this equipment is repaired and sold on; creating jobs and allowing access to cheap IT for those who would otherwise not benefit from it. In Accra, Ghana, for example, the refurb sector provides more than 30,000 jobs, and 80% of devices are either secondhand, repaired or refurbished.

However, there is also a dark side to this story. Your mobile phone contains arsenic, lead and a host of other toxic materials that pose a threat to life when it is no longer (re)useable. If the phone is sent to landfill, these chemicals can leach into soil and groundwater. Under appropriate conditions, recycling is safe. But if the recycling is conducted by a child with no safety gear on a Ghanian rubbish tip, the consequences can be brutal. Unfortunately, the latter is common. The biggest e-waste dump in the world is just outside Accra.

This newly released Tearfund paper examines how product design standards (and in particular the EU’s Ecodesign legislation) could be used to enhance the livelihoods of those engaged in repair and recycling in poor nations, rather than endangering them. This perspective is entirely absent from the debate about these standards at present.

The paper represents our first investigation of this important issue, but we can already draw three conclusions:

1. Ambitious, open design standards could improve the livelihoods of repair and remanufacturing entrepreneurs in the Global South;
2. Restrictive standards that allow manufacturers to exert a monopoly over repair and upgrade could damage these livelihoods;
3. Restricting the use of hazardous chemicals (like those on the list of ‘Substances of Very High Concern’) could improve the health of huge numbers of children and adults currently involved in the informal recycling of electronics.

At present, design standards such as the EU’s Ecodesign measures are intended to improve the resource efficiency of products sold in Europe, which is a worthy aim. With a bit more thought, they could also be used to improve the lives of some of the poorest people in the world.

Richard Gower is the Senior Associate for Economics and Policy at Tearfund, an international development NGO. This blog also appeared on Tearfund’s JustPolicy platform

The views expressed in the article are those of the author, not necessarily those of Bright Blue 

Powering ahead: the case for a new green industrial strategy

If a week is a long time in politics, as Labour’s Harold Wilson famously said, this last month has felt like an eternity. It is scarcely more than a month since the UK took its most important collective decision in post-war history and voted to leave the European Union. Twenty days later, Theresa May became the UK’s second female Prime Minister.

Given the complexity of leaving the European Union, Mrs May’s time in No. 10 may be dominated almost completely by Brexit, yet all other policy issues – health, education, security, the environment and much more besides – are still there to be addressed.

From a trade union perspective, it has been a welcome surprise to see the new Prime Minister address a number of issues that have long been of great interest to us. These include corporate governance and the importance – or otherwise – of British companies remaining British. Particularly important has been Theresa May’s early commitment to an industrial strategy, even reorganising a government department to take that forward.

Yet some have expressed concern that climate change, a central part of the government’s agenda under both the last Labour administration and the Coalition, has been downgraded. Early action to dispel that fear would be welcome.

The Trades Union Congress (TUC) believes that on this issue, we could kill two birds with one stone. Our new publication, ‘Powering Ahead’, puts the case for a sustainable industrial strategy. By sustainable, we mean it must take account of social, economic and environmental concerns. It is natural that industries are born, grow and ultimately die as technology moves on, but the upheaval involved cannot always be left to the whims of the market. In recent decades, deindustrialisation has caused serious disturbances, to put it mildly, in the lives of families and communities. That is why trade unions call for a just or fair transition as we move to more green jobs and away from more polluting ones.

Based on new research from Germany and Denmark, ‘Powering Ahead’ calls for a target of 50 per cent of UK energy coming from renewable sources by 2050. The market, by itself, will not deliver this objective. In Germany and Denmark, two countries that have made great strides towards environmental technology, the enabling role of government has been harnessed in a mission to break into those industries.

The UK government needs to step up to this challenge, with its potential for significant economic and industrial rewards. The economist Lord Stern has predicted a future annual global market of $500bn in environmental goods and services, so investment in these sectors today could reap very real economic benefits tomorrow.

We also believe that government should steer new green tech jobs towards the UK’s former industrial heartlands, which lost their livelihoods with the demise of heavy industry and too often have not seen new opportunities moving in to take the place of jobs lost. The referendum campaign showed that too many people do not believe globalisation has worked for them.

‘Powering Ahead’ explores a range of policy options the government could adopt. It calls for funds to support companies and universities, working together, to tackle the problem of storing renewable energy. It also calls for the development of a proper strategy, based on the building of a political consensus and using a social partnership approach. As readers might expect, the TUC looks enviously at the role of Danish and German trade unionists, utilising their countries’ models of social partnership to influence company decisions from an employee perspective. Politicians of the centre-right, such as Angela Merkel in Germany, seem most comfortable with this approach. Germany’s continued success as the strongest economy in Europe bears witness to its value. Collaboration must also be international; for example the report argues for cross-country effort to develop Carbon Capture and Storage technology, if this is too expensive for the UK government to fund by itself.

What is undoubtedly true is that pollution and environmental degradation know no borders and affect all of us, young and old, rich and poor, supporters of all political parties and of none. We all have an interest in the future of the planet and none of us have a monopoly of wisdom in how to safeguard it.

Outside of the EU, the TUC believes that challenge has become even harder. It was Lord Deben, described by Friends of the Earth as “the best Environment Secretary we’ve ever had”, who said he first became interested in environmental issues in the 1990s when the UK was described as the “dirty man of Europe” due to its poor recycling rates. Brexit may mean Brexit, but there is no mandate to return to those dark days and the Conservative Government needs to demonstrate how the UK’s environmental standards will be maintained and enhanced outside of the EU. The Green Conservatism project of Bright Blue has an important role to play on this issue and the TUC stands ready to support its work. 

Tim Page is senior policy officer at the TUC

The views expressed in this article are those of the author, not necessarily those of Bright Blue.

Accelerating productivity investment

Theresa May’s new government has an unprecedented opportunity to reshape the UK economy and it should not be wasted. Now is the time for Government to review its role in helping to finance productivity enhancing capital investments.

Lost confidence due to Brexit uncertainty and persistently weak productivity growth, the ultimate driver of long-run economic growth, are major concerns and new supply side investments and reforms are urgently required. While the amount of financing available is returning to pre-crisis levels, the length of loans and the cost of capital have not. Financing is available for too short a period of time and is too expensive, which results in many potentially profitable and productive investment opportunities failing to go ahead.

Given the massive difference between long-term UK government borrowing costs and those available to private investors, it would make sense to pass on some of this difference in capital costs and length of loans to those making productivity enhancing investments in social, physical, technological, and human capital.

An approach could be based on existing instruments created since 2010, namely the UK Guarantees Scheme for Infrastructure (the Scheme) and the UK Green Investment Bank (the GIB). Both of these policy instruments were created to help unlock financing for infrastructure, but both are severely constrained - largely because of the need to comply with EU State Aid rules.
State development banks in other European countries, such as KfW (originally Kreditanstalt für Wiederaufbau) in Germany, have block exemptions from these requirements as they were established prior to the EU existing and were folded into EU treaties and directives.

Now that we are committed to Brexit, the Scheme and GIB should be similarly unshackled so they can provide concessional finance. Providing low cost finance to sectors (as opposed to specific companies or ‘national champions’) through fair and competitive tendering processes can boost growth, without unfairly and counter-productively ‘picking winners’.

Such a reform would allow lower cost capital to be invested in assets able to improve long-run productivity. Concessional finance can be disbursed through tenders, or by allocating funds to banks or asset managers operating in selected sectors. This would be an important public policy tool able to accelerate investment in key areas. It could also improve the UK government balance sheet: interest would be charged on finance provided and these rates would be above the government’s own cost of capital, but below market rates.

Priorities for financing could include energy efficiency or capital improvement loans for households and small businesses – dramatically improving the attractiveness of borrowing to invest for those groups. Projects eligible for Contracts-for-Difference (CfDs) - which underpin power generation investments - could also receive the option of low cost loans, which also have the benefit of reducing their overall cost. Other priorities could be energy intensive industries – providing low cost finance for new technologies that improve the resource efficiency of industrial processes – and the deployment of a new national electric vehicle charging network. An offer of low cost capital could unlock the construction of an ambitious new UK electric vehicle charging network that would be privately owned and operated on a commercial basis.

Investments that are more resilient (for example, those future-proofed against flooding) and supportive of multiple government objectives (such as pollution and biodiversity) should be prioritised. HM Treasury and the new Department for Business, Energy and Industrial Strategy (BEIS) should determine these win-win opportunities together with the independent Committee on Climate Change and Natural Capital Committee. The creation of BEIS is a significant opportunity for a joined up approach to supporting investment.

The government can enable important productivity enhancing investments, while minimising the direct role of the state, the impact on the public finances, and the risks of ‘picking winners’. A majority Conservative Government can deliver this and get the appropriate balance between positive intervention and counter-productive market distortion.

Ben Caldecott is an Associate Fellow of Bright Blue and author of Green and responsible conservatism: embedding sustainability and long-termism within the UK economy

This article first appeared on BusinessGreen.

Solar PV: why the UK needs to get involved in a global opportunity

The global market for solar photovoltaics (PV) is ‘one to watch’ for every financier, policymaker and energy professional. If you are looking for a technology that is going to boom over the next few decades, you’ve found it.

This is ‘the one’ that is going to transform the way we generate our energy – at home and overseas.

Why? Because ultimately a solar panel is not that dissimilar to a computer microchip. Both are semiconductors. Both have seen staggering falls in costs as manufacturing economies of scale increase. For computing hardware this is known as Moore’s law, for solar it is Swanson’s law. Costs drop astronomically and efficiency goes up as more and more of the stuff is made.

And that means solar is quickly becoming a mainstream electricity generation technology. Bloomberg New Energy Finance recently predicted that there will be $3.7trillion of investment in solar between now and 2040, much of it small-scale rooftops. That is a market worth getting in on.

The International Energy Agency is predicting that globally solar could be the largest source of electricity by 2050. India is aiming to install 100 GW of solar by 2022 – more than twice the amount needed to supply all of Britain's power needs.  China is moving faster still, and will have far exceeded 100 GW by 2020. Hillary Clinton is talking of installing a billion solar panels across the United States. From Chile to Morocco to Bangladesh, the solar revolution is accelerating fast.

According to the International Energy Agency, we could have 440 GW of solar PV capacity installed worldwide by 2020. At present the UK has a world-class solar design, installation and financing sector and could, with help from UKTI, be out there getting our share of that business. Some already are, with leading solar businesses Solarcentury and Lightsource examples of home grown solar companies already starting to set up shop abroad.

However, in order to reap the rewards of export markets you need a stable domestic market to build on, and sadly the situation here in the UK could not be worse. Cliff-edge cuts to the Feed-in Tariff, Renewables Obligation and (in effect) Contracts for Difference has led the market to crash by over 80% according STA analysis, with thousands of jobs and exportable skills disappearing as we speak.

By 2030 solar could be generating 13% of global electricity by 2030, according to a new report from the International Renewable Energy Agency. Some might say “ah but that’s just for southern climes in the global sun belt”. Not true. Solar works well in Britain – solar panels in London generate much of the power they would in Madrid. Cooler British temperatures prevent the panels from overheating, keeping them efficient. Solar uses daylight, not sunshine or heat, generating power even from just diffuse light on a cloudy day.

The cost of solar has come down by 70% over the last five years. The cost of a typical solar installation on a home has dropped from around £20,000 five years ago to £6,000 today. Not yet cheap enough for it to be attractive without government support, but that gives you an idea of how cheap a way of generating power this has become.

And as the cost of the actual modules falls through the floor, the rest of the cost of installing a solar PV system, such as the labour, scaffolding, mounting gear and the inverter that converts the power from DC to AC make up an increasing proportion of the total cost. That means it is more important than ever to support a stable domestic industry with a broad based supply chain that can work to reduce costs as installed volumes increase.

The prize is enormous – a market of $3.7 trillion. If the UK moves now we can still get a significant slice of that. But export markets and domestic markets are inextricably linked, and if we want our businesses to thrive abroad, we have to allow them to thrive at home first.

Paul Barwell is CEO of Solar Trade Association

The views expressed in this article are those of the author, not necessarily those of Bright Blue.

Winning the green global race

Conservatives care for much more than a strong economy, important though that is. Beautiful landscapes and diverse wildlife all have intrinsic value. They improve our quality of life, and conservatives should protect and enhance them.

However, the dichotomy between economic progress and safeguarding the environment is a false one. We are now seeing that the transition from polluting fossil fuels to sustainable energy sources offers a major economic opportunity. Policies to tackle climate change sometimes get framed as harmful for economic competitiveness. But countries that take a strong lead on environmental action can gain a competitive advantage in the new global low-carbon economy. Global investment in new green energy infrastructure is boosting economic growth and creating jobs.

A number of reports have come out in the past month, which have quantified the size of this green economic dividend. These include a major study by the Renewable Energy Policy Network for the 21st Century (REN21), a report by the International Renewable Energy Agency (IRENA), and a survey by the Office for National Statistics (ONS). This blog will highlight some of the principal findings.

Investment

Investment in global renewable energy in 2015 was $286 billion, according to REN21. This is an increase on the previous year’s total of $273 billion. It is also double the amount of investment that new coal and gas-fired power attracted over the same 12 months. In the rankings of countries for renewable power investments, the UK came fourth, after China, the US, and Japan.

A major milestone was achieved in 2015, as renewable investment in developing countries outstripped that of developed nations. Moreover, this crossover has occurred before the effects of the Paris Agreement in December 2015 have been felt, where additional finance assistance was pledged to developing countries to help them mitigate and adapt to climate change.

Employment

There were just over eight million jobs in the green economy globally last year, according to the IRENA data. Europe’s share of this green employment was 1.17 million in 2014. Following a 20% increase in solar installations around the world last year, solar energy is now the biggest green employer overall.

The latest ONS figures show that the UK’s green economy employed 238,500 people in 2014 and turned over £46.2 billion. Energy efficiency is the biggest employer within this sector, supporting 155,000 jobs. That statistic underlines the imperative for a successor policy to the Green Deal to ensure this market continues to thrive, which we will be exploring in the second report from our Green conservatism project.

Low-carbon transport makes up over half of the UK’s green export market, generating nearly £3 billion for the UK economy. This reflects the current strength of the UK’s automotive industry, which now manufactures and exports pure electric vehicles around the world. For example, the Nissan Leaf is produced for the whole European market in Sunderland. With news this week that there are now globally over one million electric vehicles on the road, the potential for growth in this sector is significant.

But do these green jobs outweigh jobs lost in other sectors, such as fossil fuels? The UK Energy Research Council produced a report last year examining this very question. It's clear that net employment is what matters in this debate, as government spending in a particular sector will always boost short-term employment. Their study found reasonable evidence the renewables sector is more labour-intensive than fossil fuels, both in the construction phase and the average lifetime of the plant.

The UK in the green global race

The low-carbon transition is happening across the world, and momentum is gathering. The issue is not whether the UK participates in this, but whether it leads and wins big shares of these important new markets. At the moment, the UK is in a good position. It was the first country in the world to put into statute a framework for cutting emissions and it is now the first developed country to phase out coal-fired electricity. The UK is also the world leader in offshore wind with the most installed capacity of any country.

In the last Parliament, the Prime Minister would often refer to the ‘global race’. In few sectors is the opportunity as great or the competition as fierce as the green economy. Conservatives should champion environmental policy, as it will help Britain succeed in winning the green global race.

Sam Hall is a Researcher at Bright Blue

Electric vehicles: driving future growth

Greater uptake of electric vehicles (EVs) will be important for decarbonising Britain’s transport sector, since it will mean a reduction in the use of petrol and diesel cars. Air quality will also be improved as harmful emissions such as particulate matter and nitrogen dioxide are reduced.

In addition to these environmental and health factors, there has been a number of recent studies about the economic impact of EVs on the UK. One of the aims of Bright Blue’s Green conservatism project is to advocate green policies that enhance Britain’s prosperity. This blog will examine the potential for EVs to contribute to jobs and growth in the UK economy.

Current performance

The electric car industry is currently enjoying phenomenal growth in the UK. There are two main types of EV: a plug-in hybrid, which has both an electric motor and an internal combustion engine, and a pure EV, which just has an electric motor. According to the Society of Motor Manufacturers and Traders (SMMT), 2015 saw a 50% increase in sales for pure EVs compared to the previous year. Tesla’s new model of electric vehicle received 276,000 pre-orders in three days of launching. Last week, Nissan Europe reported record sales of EVs in 2015, an increase of 45% in the previous year. They ascribe much of this increase to businesses looking to decarbonise their vehicle fleets.

There is still a long way to go before EVs properly penetrate the automotive market, however. Large percentage gains mask the fact that EV sales are starting from a very low base. Even among new car sales, EVs make up just over 1%. They are also still very dependent upon government subsidy to compensate buyers for the greater upfront cost. In December 2015, the Government committed to spending £600 million on the plug-in car grant system over the next five years. Under the revised scheme, buyers of pure EVs receive a subsidy of £4,500, while new owners of plug-in hybrid vehicles get £2,500. The Department for Transport’s target is for 100,000 drivers to benefit from this support.

Future success

In its report on the fifth carbon budget, the Committee on Climate Change has said that EVs need to constitute 9% of new vehicle sales in the UK by 2020 and around 60% by 2030, if the most cost-effective path to carbonisation is to be achieved. This is very ambitious growth, and will require significant reductions in the upfront cost. There is evidence that this will be achievable. The CCC’s finding that EVs will become cost-effective in the mid-2020s is supported by Bloomberg New Energy Finance's recent analysis of this market. They studied particularly the costs of batteries, which are one of the main factors driving the price of EVs. Lithium-ion batteries have fallen in cost by 65% since 2010, with costs expected to fall further to around a third of their current level by 2030. Their report found that 2025 was the year the cost of EV ownership fell below that of conventional vehicles.

Green jobs

This boom in EV sales with have a major impact in the UK, both in the automotive industry and the wider economy. A study published this month by Loughborough University found that the electric vehicle industry in the UK could support 320,000 jobs and generate £51 billion of economic activity by 2030. This is contingent on further government investment in electric vehicle infrastructure and training of skilled mechanics. Cambridge Econometrics has also tried to quantify the direct economic benefits of EVs. In a report from 2013, they forecast that there would be 7,000 to 19,000 net additional jobs by 2030 under a low-carbon transport transition. This is because the UK petroleum industry is not very job-intensive. Moreover, as the UK is now a net importer of oil, the switch to powering vehicles with British-produced electricity will accrue more revenue for UK energy companies.

Because of the importance of the price of oil to the wider economy, the increased uptake of EVs in the UK will have an impact beyond the automotive sector. Last week's report by Cambridge Econometrics found that policies to tackle climate change, including the transition away from combustion engine vehicles, will reduce demand for oil across the EU and therefore lower the price compared to what it otherwise would have been. They find that this lower price will increase real incomes and enable more consumer spending on UK-produced goods and services. This model of course is predicated upon a number of assumptions, but it provides confidence that the transition will be broadly economically positive.

The UK automotive industry has enjoyed a renaissance in recent years. If this important sector, and the jobs that depend on it, is to thrive in the low-carbon economy, the UK must ensure it become a world leader in electric vehicles.

Sam Hall is a Researcher at Bright Blue