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.

Photo: Getty
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Vote Leave have won two referendums. Can they win a third?

The Remain campaign will hope that it is third-time unlucky for Vote Leave's tried-and-tested approach.

Vote Leave have launched a new campaign today, offering a £50m prize if you can guess the winner of every game at the Euros this summer. They’ve chosen the £50m figure as that is the sum that Vote Leave say the United Kingdom send to the European Union every day.

If you wanted to sum up Vote Leave’s approach to the In-Out referendum in a single gimmick, this is surely it, as it is deceitful – and effective. The £50m figure is a double deception – it’s well in excess of what Britain actually pays, and your chances of winning are so small they can only be viewed through an electron microscope. Saying that “the UK pays £50m to the EU” is like saying “I paid £10 for breakfast at Gregg’s this morning” – yes, I paid with a £10 note, but I got £8 back.  The true figure is closer to £26,000 a day.

But the depressing truth is that this sort of fact-free campaigning works – and has worked before. It’s the same strategy that Matthew Elliott, the head of Vote Leave, deployed to devastating effect, when he was head of the No to AV campaign, and that Dominic Cummings, head of strategy at Vote Leave, used when he was in charge of the anti-North East Assembly campaign: focus on costs, often highly-inflated ones, and repeat, over and over again.

This competition is a great vessel for that message, too, with the potential to reach anyone who has at least one Facebook friend with an interest in betting or football, i.e. everyone. And as my colleague Kirsty Styles revealed yesterday, this latest campaign is just one in a series of Internet-based, factually dubious campaigns and adverts being used by Vote Leave on the Internet.

The difficulty for the opponents of No2AV was, as one alumni of that campaign reflected recently, “how do you repudiate it without repeating it?”. A row over whether the United Kingdom sends £50m or £26,000 – itself £1,000 higher than the average British salary – helps the Leave campaign whichever way it ends up.

Neither Yes to Fairer Votes or supporters of a devolved assembly for the North East ever found a defence against the Elliott-Cummings approach. Time is running out for Britain Stronger In Europe to prevent them completing the hattrick. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.