automotive interest rates by harvey1


									                     WEEK IN WESTMINSTER

                    Week ending Friday 10 October 2008

       1. Registration figures - lack of consumer confidence
       2. Sustainability report – automotive industry launch
       3. Interest rates cut
       4. Reshuffle finalised
       5. New National Economic Council set up
       6. Government announces banking rescue plan
       7. Climate Change Committee calls for stricter targets
       8. CRFA announces first quarterly biofuels report
       9. New skills academies approved - enterprise
       10.Week ahead

1. Registration figures – lack of consumer confidence
The Society of Motor Manufacturers and Traders’ (SMMT) has released new car
registration figures for September. New car registrations fell 21.2% in September
to 330,295 units. Year-to-date volume was down 7.5% to 1,794,419 units. Diesel
market share increased to 42.8% in September, but volumes fell. The figures
show a clear lack in consumer confidence and represent the most difficult
economic conditions the industry has faced in 17 years. SMMT urges government
to take immediate action to restore consumer confidence. Paul Everitt, SMMT Chief
Executive said: “Government action is now needed to restore consumer confidence
and boost demand in the real economy. The chancellor's pre-budget report should
set out a package of measures to boost demand for new fuel-efficient cars and
scrap plans for unfair increases in car tax.” (Source: SMMT)

2. Sustainability report – automotive industry launch
SMMT has published its ninth annual sustainability report. The publication was
launched at the House of Commons on Wednesday. Vehicle manufacturers
continue to make significant reductions in the environmental impact of their
products, throughout the whole life cycle of the vehicle. The report shows that the
energy needed to produce each vehicle is down 12%, water use is down 9% and
waste to landfill is down 25%, compared to 2006 performance. CO 2 emissions
per vehicle produced have fallen 14% in the last year, and by 45% since 1999
and almost 10,000 tonnes of waste have been prevented from entering landfill
sites. However, economic uncertainty, falling new car registrations and car
taxation changes mean that industry faces a significant challenge if it is to
continue this level of improvement in the future. An ageing parc threatens the
progress made in many areas because, on average, new vehicles emit less CO2,
produce fewer air pollutants, and are quieter and safer than older models. Paul
Everitt, SMMT Chief Executive said: “Despite the current difficulties there should
be no doubt about the industry’s willingness and desire to keep delivering
products that are cleaner, safer and more fuel efficient.” (Source: SMMT)

3. Interest rates cut
Six central banks, including the Bank of England (BoE), have cut interest rates by
half a percentage point to 4.5%. The Bank of England cut interest rates in
conjunction with the Bank of Canada, the European Central Bank, the US Federal
Reserve, Sveriges Riksbank, the Swiss National Bank. The Bank of Japan
expressed its strong support of these policy actions. The BoE believes that this
move will help easing global monetary conditions. However, the BoE noted that
cuts in official interest rates could not be expected to resolve the current
problems in financial markets and that a significant increase in the capital of the
banking sector would be required. They therefore welcomed the announcement
of a Government programme to recapitalise the major UK banks.
(Source: BoE)

4. Reshuffle finalised
Gordon Brown has completed his ministerial reshuffle. Cabinet moves include a
return to UK politics for Peter Mandelson as secretary of state for business,
enterprise & regulatory reform. John Hutton becomes secretary of state for
defence. Jeff Hoon is the new secretary of state for transport and the former
cabinet office minister Ed Miliband is now the secretary of state at the new energy
and climate change department. The new department will take over the energy
brief from the department for business, enterprise and regulatory reform and the
climate change portfolio from the department for the environment, food and rural
affairs (DEFRA). Hilary Benn will continue as the secretary of state for DEFRA. At
the Treasury a new post of financial services secretary was created for former
Marks and Spencer’s chairman Paul Myners, who will become a peer. Baroness
Vadera will now work jointly across both the Cabinet Office and department for
business, where Pat McFadden will deputise in the Commons for Peter Mandelson,
who will be based in the Lords. Lord Bassam becomes chief whip in the Lords,
replacing Baroness Royall, who was promoted to the cabinet on Friday as leader
of the upper house. The full ministerial list can be accessed at (Source: Number10, BBC, ePolitix)

5. New National Economic Council set up
Gordon Brown has created a new national economic council to help Britain
through the financial crisis. The economic sub-committee is expected to meet
twice a week and act as the focus of the government's effort to stave off
recession, the global crisis in the financial markets and volatile prices. It will also
act as a forum for discussions on how to equip the country for the future by
investing in education, skills, science and infrastructure. The NEC will also have
responsibilities to promote the development of sustainable and secure energy
supplies; to tackle barriers to entrepreneurship and small business growth; and to
address the UK's housing and planning needs. It will be backed up by a senior
officials' working group, chaired by cabinet secretary Sir Gus O'Donnell and
including the civil service heads of all Whitehall departments. A new network of
business ambassadors will be established to support the government and
promote UK trade and investment opportunities overseas. Among the first
business ambassadors are outgoing trade minister Lord (Digby) Jones, Lloyds
TSB chairman Sir Victor Blank, Habitat founder Sir Terence Conran, architect Lord
(Richard) Rogers and the vice chancellors of Oxford and Cambridge universities
Dr John Hood and Professor Alison Richard. Sitting on the NEC will be Chancellor
Alistair Darling, foreign secretary David Miliband, new business secretary Peter
Mandelson and eight other Cabinet ministers, as well as new science minister
Lord Drayson, new minister for the City Paul Myners and freshly-appointed
communications minister Stephen Carter. The Council will be a full Cabinet
committee, replacing the current economic development committee. (Source: PA)

6. Government announces banking rescue plan
Chancellor Alistair Darling has announced that the Treasury will, if
requested, take preference shares in banks - a major stake that gives the
government unprecedented control. The £500bn rescue scheme comes in three
parts, £50bn of taxpayers' money will be offered to banks to rebuild their capital
reserves, £200bn of liquidity is being made available as short-term loans in an
attempt to thaw the frozen interbank lending markets and further a £250bn will

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underwrite lending between banks. This is twice as much as was previouly offered
under the Special Liquidity Scheme. (Source: Dods)

7. Climate Change Committee calls for stricter targets
The independent climate change committee (CCC) has advised government that a
cut in greenhouse gas emissions of at least 80% by 2050 is feasible and should
include international aviation and shipping. David Kennedy, chief executive of the
CCC believes that climate change emissions could be reduced through more
efficient forms of heating and more efficient cars including electric cars.
He said: “Finally, we will need to de-carbonise the heavy, energy incentive
industries and there are technologies available to do that.” He added that the
incentive for people to act needed to be strengthened and additional policies are
required to “make good” on some of the commitments from government.
(Source: The Guardian, BBC Radio 4)

8. RFA announces first quarterly biofuels report
The Renewable Fuels Agency (RFA) has released its first interim quarterly report
which includes disclosure of company performance on the supply of biofuels
under the Renewable Transport Fuel Obligation (RTFO). In the year to April 2009,
fossil fuel companies were obliged to supply 2.5% biofuel in UK road fuel. Biofuels
accounted for 2.61% in the first quarter. More biodiesel (84%) has been supplied
than bioethanol (16%).
(Source: RFA)

9. New skills academies approved - enterprise
Secretary of State for Innovation, Universities and Skills, John Denham MP has
approved three new national skills academies for enterprise, power, IT and social
care. These academies will receive up to £30m in capital and revenue funding -
matched by employers - to unlock and nurture the talents of a new generation of
professionals. They will help thousands of people to become leaders in their
chosen fields, as well as helping to tackle current and future skills shortages in
areas vital to the future success of our economy. These now make a total of 16
national academies, with total Government investment in the programme will
reach an estimated £120m.
(Source: DIUS)

10. Week ahead
House of Commons
Wednesday October 15 - Midday: Prime minister’s questions.
Thursday October 23 - 10.30am: Business, enterprise and regulatory reform

Westminster Hall
Tuesday October 14 Westminster Hall debate - 12.30pm – 1.00pm: Noise
pollution and congestion on the M3 (Maria Miller).

House of Lords
Thursday October 16 - Oral questions: Lord Krebs - what steps they are taking
with local authorities to encourage walking and cycling in urban areas.

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