In times of struggle, the British buy cars

It's not a rational response to economic hardship, but it is a British one.

The UK car industry has in the past been associated with British Leyland’s unreliability, emptying factory floors and rusting scrap yards. It is now the most unlikely, but welcome, source of continuous good news in the post-2008 economy.

As the recession trudges on it’s become an accepted wisdom that consumers will not spend on luxuries, they will avoid large expense and they are not confident enough to invest in long term products. It seems a stretch to imagine that in a recession the car industry would remain buoyant; surely, it’s pure fantasy to say that it would do well?

There were early signs that the car industry held hope for consumers, GDP-watchers and policy makers alike. When the Labour government launched a car scrappage scheme in March 2009 car sales increased beyond expectations. Up to 400,000 cars, each around 27 per cent more efficient than its scrapped counterpart, were sold as a result of the scheme. The policy will go down in records as one of the most successful of the stimulus policies following the 2008 crash.

When that stimulus was taken away wouldn’t the car industry, which was already in decline before the crash, lose business? Maybe in the short term, but in the long term the good news has continued. Foreign companies have chosen to invest in production at plants in Sunderland, Ellesmere Port and Halewood. The first quarter of 2012 became the first time since 1976 that motor exports exceeded motor imports. With models like the Land Rover Freelander, the Vauxhall Astra and the Nissan Qashqai now built in the UK, the car manufacturing industry is now among the most viable and important in the UK.

British people aren’t buying cars in the middle of a recession, are they? Yes. They really are. In the year from July 2011 to July 2012, new car sales increased by 10.5 per cent even as we slipped back into recession. With their much welcomed GDP boosting powers this increase does not look like it is stopping.

On 1st September, when the new “62” registration plate is released, over 165,000 new cars will make their way from forecourts to the UK’s roads. This week Vertu Motors, a top ten UK motor retailer, released research which estimates that these sales will be worth in the region of £500m to the treasury in VAT alone, and an additional £20m in road tax.

Boosts in sales are not only good for the UK’s GDP, but for the budget too. New models are more carbon efficient than ever before, passing on benefits to consumers and relative improvements for the environment too.

In trying times, when all that we are given are negative stories and confidence is low, we can find a surprising and much needed boost for UK consumers and manufacturers in high cost luxury goods.

In times of struggle, the British buy cars. Go figure.

Cars pile up in a scrapyard as they're replaced with newer models. Photograph: Getty Images

Helen Robb reads PPE at Oxford University where she is deputy editor of ISIS magazine.

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Sadiq Khan gives Jeremy Corbyn's supporters a lesson on power

The London mayor doused the Labour conference with cold electoral truths. 

There was just one message that Sadiq Khan wanted Labour to take from his conference speech: we need to be “in power”. The party’s most senior elected politician hammered this theme as relentlessly as his “son of a bus driver” line. His obsessive emphasis on “power” (used 38 times) showed how far he fears his party is from office and how misguided he believes Jeremy Corbyn’s supporters are.

Khan arrived on stage to a presidential-style video lauding his mayoral victory (a privilege normally reserved for the leader). But rather than delivering a self-congratulatory speech, he doused the conference with cold electoral truths. With the biggest personal mandate of any British politician in history, he was uniquely placed to do so.

“Labour is not in power in the place that we can have the biggest impact on our country: in parliament,” he lamented. It was a stern rebuke to those who regard the street, rather than the ballot box, as the principal vehicle of change.

Corbyn was mentioned just once, as Khan, who endorsed Owen Smith, acknowledged that “the leadership of our party has now been decided” (“I congratulate Jeremy on his clear victory”). But he was a ghostly presence for the rest of the speech, with Khan declaring “Labour out of power will never ever be good enough”. Though Corbyn joined the standing ovation at the end, he sat motionless during several of the applause lines.

If Khan’s “power” message was the stick, his policy programme was the carrot. Only in office, he said, could Labour tackle the housing crisis, air pollution, gender inequality and hate crime. He spoke hopefully of "winning the mayoral elections next year in Liverpool, Manchester and Birmingham", providing further models of campaigning success. 

Khan peroration was his most daring passage: “It’s time to put Labour back in power. It's time for a Labour government. A Labour Prime Minister in Downing Street. A Labour Cabinet. Labour values put into action.” The mayor has already stated that he does not believe Corbyn can fulfil this duty. The question left hanging was whether it would fall to Khan himself to answer the call. If, as he fears, Labour drifts ever further from power, his lustre will only grow.

George Eaton is political editor of the New Statesman.