Talks in Brussels between troubled banking group RBS and the EU have raised the prospect that the group's major motoring brands Direct Line, Churchill insurance and Green Flag will have to be sold off.
The RBS insurance arm is Britain's largest car insurance provider, second largest general insurer and employs 18,000 people.
This week the European Commission has been ruling on measures banks must take to offset the advantage of state backing they have received, focussing mainly on forced asset sales.
Earlier, Northern Rock and Lloyds TSB were the subject of invasive EU competition rulings that ordered Northern Rock to be split in two and Lloyds TSB to dispose of significant parts of its high street network.
RBS was one of the worst affected by the credit crunch and was propped up by over £20bn of public backing.
Now 70%-owned by the taxpayer, RBS executives have been in Brussels this week thrashing out a settlement with EU competition chiefs.
According to Sky News, EU Competition Commissioner, Neelie Kroes, has said that the only way the EU will be satisfied with the extent of state backing for RBS will be if the bank sells off its insurance arm.
As well as Direct Line, Churchill and Green Flag, the group includes the Privilege brand and broker insurance provider NIG.
RBS mooted disposing of its insurance arm back in February, in order to raise sufficient money to avoid a government takeover.
But the sell off was abandoned after it became clear the amount raised would be billions of pounds less than RBS was hoping for.
At the time, RBS chief exec Stephen Hester said: "Given RBS's broader considerations, it was important to test the market for this business, which has demonstrated that a sale on terms currently available would destroy value for RBS shareholders."
Together, the group's thousands of employees and millions of customers in Britain are unlikely to welcome the new instability the EU is forcing on the companies.
Talks are set to continue after the weekend.
New research published today has exposed the scale of the raw deal that car users get from the government.
The study into government spending on road and rail infrastructure when compared per passenger kilometre reveals that for every £1 of public money spent on roads, a massive £10 is spent on rail services.
That spending on rail outnumbers spending on roads by a factor of ten to one when actual usage is taken into account is particularly unfair given the huge amounts of tax paid by car users every year.
The study estimates the motorists' tax burden at over £30bn a year - increasing all the time.
Even this figure only takes fuel duty and road tax bills into account, yet is still £18.4 billion more than the combined total cost of road spending and road transport greenhouse gas emissions.
Credible comparison
The conclusions of the study, which was produced jointly by the Drivers' Alliance and the TaxPayers' Alliance, were based on total spending in 2007/08 of £8.2bn on rail and £8.3bn on roads.
While those two figures are roughly similar, campaigners say 59 billion passenger kilometres were travelled by rail in that period, compared with 749 billion by road.
The use of passenger kilometres means both the number of people travelling and the distance of their journeys are taken into account, to accurately reflect how each mode of transport contributes to keeping Britain moving.
Not even green
Such a disparity in spending cannot even be justified on environmental grounds, since a rail industry report concluded that it can often be greener to travel by car than catch a train.
The Rail Safety and Standards Board study confirmed that a journey by a family of three would produce half the emissions if travelled by car than by modern diesel train.
Peter Roberts, Chief Executive at the Drivers’ Alliance, said: "We desperately need to prioritise roads before rail if congestion is to be tackled. "Adding road capacity is cost effective and provides genuine savings in journey times for the majority of individuals, goods and services.
"Spending vast sums of drivers' taxes on extravagant rail projects will not address the immediate transport problems we have in the UK.”
Funding switch
The time has come for the government to drop the tired old dogma of treating car users like cash cows and giving very little in return - especially splashing the vast sums that car users pay in tax on far less efficient and less environmentally-friendly forms of travel.
Huge sums being sunk into the railways must be rebalanced back towards the far better investment of road infrastructure instead.
With public spending cuts looming large on the political agenda, this study clearly shows that it is cuts in rail expenditure that should come before chopping road improvement projects.
Toyota and Nissan are going head-to-head in a quest to offer the first British-built hybrid car.
Petrol-electric versions of Toyota's Auris and the Nissan Qashqai are currently under development and heading for UK and European showrooms in 2010.
But while Toyota has set its sights on being first, according to Auto Express magazine it's the 'eco-friendly' Qashqai that looks set to be quickest off the mark.
The mag claims that Nissan's hybrid 'crossover' 4x4 will start to roll off the company's Sunderland production lines early next year, and is likely to debut shared drive between an electric motor working one axle and a smaller petrol engine powering the other.
Toyota have yet to reveal exact details of the new Auris drivetrain, but the company has confirmed it will feature the ground-breaking Hybrid Synergy Drive seen in the brand's latest Prius model.
This means the Toyota newcomer, which is due to start production next summer from the company's Derbyshire plant, promises a full electric-only mode and ultra-low CO2 emissions.
Pricing has yet to be announced but if the Auris undercuts Honda's Insight - at £15,890 in base 'S' trim - the model may be a challenger for the title of cheapest hybrid available in the UK.
Speaking about his company's new model, Tadashi Arashima, President and CEO of Toyota Motor Europe, said: "Our decision to produce a full hybrid in the UK reflects both our confidence in the quality and commitment of the TMUK workforce and the strength of our long-standing partnership with the UK Government."
But not far behind in the race to debut a Brit-built hybrid is Land Rover - often unfairly singled out by eco-mentalists as a maker of 'gas guzzlers'.
The 4x4 specialist last month confirmed that a production version of its exciting LRX concept will go into production at the company's Halewood plant in Merseyside.
The latest Landy's 'green' credentials will be sealed by an electric-drive rear axle coupled to a 2-litre turbodiesel engine, capable of running on bio-diesel.
CO2 output is predicted to be around 120g/km, putting the 4x4 in the cut-price £35 car tax band.
Altogether this news is a great sign that, despite the economic downturn, major car producers are maintaining their commitment to British manufacturing and that the UK-based industry is at the cutting edge of new motor technologies.
And if it doesn't cure the obsession with 4x4s exhibited by some eco-mentalists, we don't know what will!
Let's hope they now decide to get behind a vital British industry, instead of working as they have been to date to cost tens of thousands of people their jobs.
The Evening Standard today splashes the news that London mayor Boris Johnson has 'shelved' plans to axe the western extended area of the city's congestion charge zone.
Scrapping the westward extension was a flagship pledge made during Boris's successful election campaign.
The repressive anti-car policies of his precedessor as mayor, Ken Livingstone, were said to be a major factor in his downfall from office.
The plan to scrap the western extension was greeted warmly by the overwhelming majority of businesses and residents in the area.
No surprise, given a large majority voted against the imposition of the extension in the first place, but were at the time completely ignored by Livingstone.
However, the idea that Boris has 'shelved' the plan - implying indefinitely - seems to be something of an overstatement.While it does look like the pledge now will not be delivered "by 2010", as originally suggested, Johnson this afternoon rushed to confirm in no uncertain terms that the western zone will be removed "next year" - blaming "a number of tedious bureaucratic hoops" for the delay.
The confusion seems to have been caused originally by Kulveer Ranger, the Mayor's transport adviser.
Looking at his quote in the Standard, Ranger appears to have intimated that removing the western extension was merely an "aspiration" and that economic circumstances may now prevent it happening.
It's understandable how the Standard interpreted such political code as the plan being 'shelved'.
While removing the zone would cost TfL between £55 million and
£70 million in revenue, if the economy is a factor at all in the decision it is more a reason to scrap the zone as soon as possible than a justification for delay.
While TfL undoubtedly wants to cling onto that revenue, the reality is it comes out of the pockets of thousands of people likely already struggling to make ends meet in difficult times - money they could otherwise be spending in the shops and with local businesses also struggling to ride out the downturn.
Businesses themselves are hit twice by the c-charge, first by the reduction of passing traffic cutting visitors to their shops and second when their staff or delivery vans have to criss-cross the zone boundary and they have to pay the charge themselves.
So businesses in particular will not be at all happy at having to put up with the zone for potentially at least another year.
If Boris is going to maintain the great deal of goodwill he enjoyed at the last London election for his c-charge pledge, he'd better redouble his efforts to cut through that bureaucracy and get wielding his axe as soon as possible.
Aston Martin has announced its intention to compete for outright victory at this year's Le Mans 24 hour race, due to be held over the weekend of 13-14 June.
The Warwickshire-based sportscar maker intends to build on its success in the GT1 class and achieve overall victory fifty years after the marque first secured the top step on the classic endurance race podium.
While Aston's efforts with its DBR9 racer have delivered class victory two years in a row, competing for the overall title against the proven speed and endurance of the diesel-powered cars such as the Audi R15 and Peugeot 908 is an ambitious goal.
But in 2009, the Automobile Club de l'Ouest (ACO), which sets the rules for the race, is introducing new regulations aimed at balancing the performance of petrol and diesel engined cars, which Aston believe hands them an opportunity to climb the rankings.
The attempt to emulate the legendary achievements of Aston's 1959 DBR1 driven by Carroll Shelby and Roy Salvadori will be spearheaded by two Works LMP1 cars (pictured) wearing the iconic blue and orange livery of Gulf Oil.
The new car will be based on the 2008 Charouz Racing System Lola, which came a respectable 9th place in last year's race, the first six positions being occupied by the ground breaking diesel racers.
Also working on the car together with Aston Martin will be Lola, Michelin, Koni and BBS. Power will be provided by the same production-based V12 engine from the class-winning DBR9, which also last year powered the Charouz Lola to a new Le Mans lap record for a petrol car.
To ensure complete focus on the LMP1 challenge, Aston Martin will not defend its double GT1 title in 2009. However, the company will continue to support its official partner teams and customers competing at the race.
Aston Martin chairman, David Richards, whose consortium took over Aston Martin from Ford in 2007, said;
"2009 is a hugely significant year for Aston Martin at Le Mans and the challenge of reclaiming victory in this famous race for Aston Martin and Great Britain was simply too great to ignore."
"However, we do not underestimate the task," he said. "Nonetheless, I see this as a great opportunity to showcase the ingenuity of British engineering talent."
Unelected Secretary of State for Business, Peter Mandelson, has this afternoon made a statement on government plans to help the car industry.
Having been much hyped since December as a 'bail out' of the industry, following growing announcements of job losses and temporary shut downs, very little of substance has emerged.
One of the most-trailed measures was potential help for car company finance arms, to enable people who still want to buy a new car to get a loan in these times when banks are less keen to lend.
Such a plan would at least target the main problem - that demand for new cars has dropped off a cliff and car makers have stockpiles of unsold cars.
However it would not be specific help for British industry, as EU single market rules would prevent it being tied to the purchase of only British-made cars.
Yet despite the hype, all that today's statement offered was that the government was "looking at steps" on this front - a feeble response when the industry's troubles have been evident for months and action is desperately needed.
The Treasury is thought to be opposed to the idea, fearing it would set a precedent and open the floodgates to demands from other industries for the same treatment. Particularly from those within the also much-troubled electronics and furniture retail sectors.
Loan guarantees
The headline-grabbing measure, which no doubt most of the mainstream media will robotically retail, was the announcement of guarantees to 'unlock' loans of up to £1.3 billion from the European Investment Bank.
Plus a further £1 billion in loans was offered to fund non-EIB eligible investment that would be of particular benefit to Britain or to the advancement of green technology.
Responding later in the House of Commons, Mandelson's 'shadow' for the Conservatives, Ken Clarke, claimed that these loans had been announced previously and were nothing new.
Mandelson said that proposals for assistance would be considered on a "case by case" basis, and evidently seeking to slay any ghosts of the 70s he said that there would be "no operating subsidies".
Details as to the criteria by which such proposals will be judged were not given, but may emerge after a 'car summit' between government and major players in the industry, due tomorrow.
Long term fantasy
Speaking in the House of Lords, where there is no elected opposition to question him, Mandelson said that the government's proposals were designed to 'lay the foundations for a low carbon future'.
It's another example of an affliction of politicians that is becoming increasingly obvious in these troubled times. Calling it futuritis, author of the EUreferendum blog, Richard North, describes it as: "Unable to deal with the problems of the present ... they fix their eyes on some point in the future, when everything will come right. They thus ignore completely the disasters of today and tomorrow, painting their vision of distant sunlit uplands".
When it comes to the car industry, such 'low carbon future' long-termism is completely misplaced when, unless critical short term problems are relieved, there may be no car industry left.
Those problems were largely ignored by today's statement.
Exciting news for Jaguar fans this week, as Auto Express reveals that the company is planning to reinvent the legendary XJ220.
The magazine, well-known for its new car scoops, claims a dramatic new mid-engined sports car is being developed by Jaguar as a rival to the Audi R8.
While the concept is denied by Jaguar, the magazine claims that the car will make its debut at a major international motor show within the next 18 months - indicating that plans must already be well advanced.
In a nod to the marque's iconic E-Type, the two-seater is tipped to be badged the XE, heralding a return to a more raw, sporting side of Jaguar's heritage.
But this isn't the first Jaguar concept thought to be set for the XE badge. Last year it was speculated that it would adorn a Porsche Boxster rivalling baby coupe-convertible that would sit below the XK in the range.
Plans for an R8 rival would mark another big step in the company's revival of its dated model range.
XFR breaks record
The revelation comes as the sports version of Jaguar's new XF model has smashed the company's speed record.
In a graphic demonstration of the progress made in car design and engineering since the 1990s, an uprated four-door XFR saloon hit a top speed of 225.675 mph at the Bonneville Salt Flats, going even faster than the 217.1mph record set by the XJ220.
Rumours are that the minor developments to the showroom XFR that boosted the car to the record will debut on the road as a hotter XFR S model.
With a price that will undercut the BMW M5 by nearly £6,000, the flagship XFR is set to be a tough package to beat at the top of the executive saloon sector.
Looking ahead
Jaguar had a mixed year in 2008, launching the widely-praised new XF model and seeing UK sales rise by nine percent while many other luxury car brands faced a sales slump.
But this success was overshadowed by news towards the end of the year of extended shut downs at the company's Castle Bromwich plant and job losses.
The contrast between the company's sales success and the job losses has led some to suspect another agenda at work in the minds of new owners Tata.
Gloomy forecasts for sales during 2009 may be to blame, but some are wondering whether the company's British manufacturing operations and staff have been at greater risk than assurances given at the time the Indian company took over led us to believe.
With the company's current focus on developing its new XK and XF models, as well as launching an all-new luxury XJ saloon due in 2010, the XE is not likely to be seen in the showrooms before 2012.
If you're wondering why this blog has been so quiet for the last couple of months, it's down to a sense that 2008 offered a glimmer of hope that car users are turning the corner against overbearing politicians and repressive eco-mentalists.
Wishful thinking? Probably. Maybe the recent drop in fuel prices and the temporary delay of road tax hikes announced back in the Pre-Budget Report has gone to our heads.Our last posting back in October heralded the start of the debate over congestion charging in Manchester. Thankfully the plan was rejected resoundingly by almost 80% of local voters.
This was despite the best efforts of the government and its BBC supporters to bribe locals with the promise of billions of pounds of spending on public transport projects.
These were projects than Mancunians justifiably thought should be provided anyway, paid for out of the considerable taxes they have already handed over to the government - rather than the billions of pounds extra that congestion charging would have cost them.
C-charging under fire
Of all the projects dreamt up by today's politicians - who seem to regard car users as cash machines they can raid repeatedly whenever they've wasted too much money elsewhere - congestion charging took the biggest kicking of 2008.
Some months before Manchester's triumph, the archdeacon of the anti-car lobby, Ken Livingstone, was ousted as mayor of London - having threatened a completely unjustifiable £25 daily charge that would have hit a wide range of normal family car users.
Livingstone spun the plan as designed to target those dastardly 4x4s that the eco-extremists seem to have an irrational obsession about. Irrational, given most 4x4s are no bigger, nor as gas guzzling than many mid-range family cars.
Spun out of office
Trouble was, anyone who could glance at a car magazine knew that targetting just 4x4s by emissions was impossible and that far more people were going to be financially slammed by the massive increase than Ken claimed. So Ken was kicked out.
A lesson there for all politicians about the dangers of over-confidence in the ability to spin a political agenda in the face of blatantly contrary facts.
His successor, Boris Johnson, has already consulted local people and pledged to scrap the westward extended area of the London zone.
Almost 28,000 took part in the consultation, of whom 67% and 86% of businesses supported the removal of the zone - similar numbers to those opposing its introduction in the first place, but whom Livingstone simply ignored.
The zone will be shrunk to its original central area by 2010, but given current economic circumstances local businesses and people are pushing for the toll to be lifted sooner.
Anyone listening?
While locally-based congestion charging faced an overwhelming public battering in 2008 - in addition to the 1.8 million people who signed a Downing Street petition in 2007 - road pricing has not yet been driven off the government's agenda.
What is it going to take for these people to get the message?This year the Department for Transport will press ahead with trials for a pay-as-you-drive scheme that could see car users paying £1.30 a mile at the busiest times. The basis of the idea is to ration road space rather than provide the necessary capacity or a viable alternative - an approach which, if applied to hospitals or schools, would cause uproar.
In addition to the democratic insult of ignoring repeatedly expressed public opposition to the idea, according to the Daily Express trails have already cost £10 million and the bill is only going upwards.
Rationing roads
The government line is that the trials are designed to "inform the work of those local authorities who are considering taking forward local congestion charging".
But what council would still seriously consider such a scheme after the fate that befell policy-makers last year in London and Manchester?
Naive defenders of pay-as-you-drive - such as some long established organisations purporting to represent the interests of motorists - seem to have the idea that if such a scheme replaces road tax, or if fuel tax is reduced, then drivers could benefit.
Leaving aside, as those organisations sadly do, the privacy implications of individual movement-tracking, does anyone seriously imagine that the government would implement a system costing billions of pounds if it wasn't going to rake in more money from us in the long term than whatever taxes it replaces?
Further moves towards road pricing look set to remain the biggest policy threat to the finances of car users into 2009. But, of course, authorities both national and local are already planning many other petty annoyances to hinder and frustrate the vast majority of car users for whom there is no viable alternative to life on the road.
More about those in another post.
Talks in Brussels between troubled banking group RBS and the EU have raised the prospect that the group's major motoring brands Direct Line, Churchill insurance and Green Flag will have to be sold off.
