Friday, October 30, 2009

RBS motor brands may go under the hammer

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.

Tuesday, October 20, 2009

Cars users get raw deal relative to rail

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.

Sunday, October 11, 2009

Race is on for first Brit-built hybrid

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.