SMMT response to motoring taxation report

24 July 2009 #SMMT News


SMMT response to Transport Select Committee review of motoring taxation and charges



The Society of Motor Manufacturers and Traders (SMMT) welcomes the Transport Select Committee’s review into motoring taxation and charges, for highlighting the need for a clear and transparent approach to environmental taxation. SMMT agrees with the report that consumers and industry need a consistent and long-term framework for motoring taxation across all vehicle sectors.


New vehicles being delivered to market are cleaner and emit on average nearly 20% less CO2 than in 1997. New legislation to mandate tailpipe CO2 limits, and the development of an industry technology roadmap to develop a market for ultra-low carbon vehicles, means that CO2 from vehicles will continue to fall.


As a consequence of this, the tax income for government from the current CO2-based Vehicle Excise Duty system as well as Company Car taxation will be eroded. It is imperative that this does not lead to constant adjustments and increases preventing clear long-term signals to consumers on their choices and trust in the system, as with the latest changes.


“Government must work with industry and other stakeholders openly on a new consistent and transparent long term model for motoring taxation that is fair and helps industry to deliver low-carbon targets,” said Paul Everitt, SMMT chief executive. Any change to policy must reconcile revenue, environmental and UK industrial goals while achieving buy-in and trust from the consumer.”



1. At €20 bn, the automotive sector is Europe’s largest investor in R&D, driving industry forward and helping deliver more sustainable motoring for the 21st century. Technological innovation has helped car and CV manufacturers slash CO2 and air quality emissions from vehicles. New diesel cars for example emit 95% less soot from the tailpipe than those made 15 years ago and average new car CO2 has been cut by 19% since 1997.


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.  CO2 emissions per vehicle produced have fallen 14% in the last year and by 45% since 1999. Almost 10,000 tonnes of waste have been prevented from entering landfill sites. For more details, download SMMT’s ninth annual Sustainability Report from the SMMT website


2. Why is the automotive sector important to the UK economy?

·          27 car and CV manufacturers operate in the UK producing 1.7 million vehicles

·          £51b turnover and £9.5 billion value added

·          Over 800,000 UK jobs

·          UK automotive manufacturing supplies over 100 markets worldwide, offering some resilience to UK issues

·          New cars emit less CO2 than older models – average new car CO2 emissions have fallen 19% in the last decade


For more information on the UK motor industry, visit or



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