Newly-elected government to drive fleets and drivers further along the ‘green’ road

The newly-elected minority Conservative government will continue to drive businesses and company car and van drivers further along the ‘green’ road as ministers seek to ‘clean-up’ the UK’s vehicle population.

In recent years, the government’s vehicle-related tax strategy – company car benefit-in-kind tax, Vehicle Excise Duty and capital allowances – has aimed to incentivise the take-up of zero and ultra-low emission vehicles.

That strategy is set to continue with Theresa May returned to 10 Downing Street, potentially supported by an arrangement with Northern Ireland’s DUP, and it will be further outlined in the new Autumn Budget in November – although an emergency post-election Budget in July ahead of Parliament’s summer recess cannot be ruled out.

Meanwhile, there have been calls for the new government to put a greater focus on road casualty reduction with IAM RoadSmart, the UK’s biggest independent road safety charity, arguing that work-related road safety should be a higher priority.

An immediate post general election focus of the new government is to publish its definitive and long-awaited Air Quality Plan.

Due to be published by the Department for Environment, Food and Rural Affairs by July 31 – following a consultation period that ended on Thursday (June 15) – the Plan is expected to:

  • Confirm which of a potential 80 local authorities will formally and legally be required to develop and implement comprehensive Clean Air Zone plans (see The Buzz: May 2017)
  • Outline measures to reduce the impact of diesel vehicles on air quality
  • Accelerate the move to cleaner transport, notably demand for plug-in vehicles.

The government has already serviced notice that the “tax treatment for diesel vehicles” could change as it bids to cut pollution from the transport sector and improve air quality.

Civil servants are known to be exploring what the previous government called “the appropriate tax treatment for diesel vehicles”, which includes engaging with stakeholders ahead of making any tax changes in the Autumn Budget.

As a result, fleet managers and company car drivers can expect diesel vehicle tax changes – and potentially increases – as the government reinforces its Air Quality Plan and its mission to convert fleets – and consumers – to plug-in and ultra-low emission vehicles.

The Conservative’s manifesto ‘Forward Together: Our Plan for a Stronger Britain and a Prosperous Future’ said that it remained the Party’s ambition for Britain to “lead the world in electric vehicle technology and use”.

It continued: “We want almost every car and van to be zero emission by 2050 – and will invest £600 million by 2020 to help achieve it.”

The manifesto also indicated that more cash would be spent on research and development including batteries that would power a new generation of “clean, efficient, electric vehicles”; while £1.1 billion would be invested in improving local transport infrastructure.

On transport, the Conservatives said: “We are working through one of the largest-ever investment programmes in our roads and railways, putting some £40 billion into transport improvements across the UK over the rest of this decade.

“We are investing to reduce travel time and cost, increase capacity and attract investment in the UK. We will continue our programme of national investments including HS2, Northern Powerhouse Rail and the expansion of Heathrow Airport.

“We will continue to develop the strategic road network, providing extra lanes on our motorways and improving key routes whilst also paying attention to parts of the country left behind because of poor transport connections. We will continue to invest in roads to fix pinch points.”

Extra rail capacity to ease passenger overcrowding, new rail lines and stations and improving existing routes are also on the agenda as well as the expansion of cycle networks.

The previous government was also starting to study the taxation of benefits-in-kind and employee expenses to ensure they were “fair and consistent”. That “call for evidence” work, which is expected to include an examination of Approved Mileage Allowance Payments made to employees that drive their own cars on business journeys, will continue and a consultation document on the proposals can be expected to be published.

The DUP’s manifesto was light on reference to transport, but it is known to be pushing for more local infrastructure spending as part of any arrangement to support the government and that could include cash for new roads. It also wants to see a corporation rate cut to “at least” 12.5% – under devolved powers the Northern Ireland Assembly can set its own rate.

Meanwhile, the British Vehicle Rental and Leasing Association (BVRLA) has set out its priorities for the incoming government, outlining how the fleet and mobility services sector can enable policymakers to drive down emissions, improve road safety and make road transport more cost efficient.

In its ‘A Fleet and Mobility Services Manifesto’, covering emissions, air quality, road safety, Brexit, red tape and connected cars, the BVRLA compiled a six-point action plan for the incoming administration. It demands:

  • A wholesale review of company car taxation, recognising the benefits of company cars in terms of reduced emissions and revenue to HM Treasury
  • Additional Clean Air Zone guidance to ensure consistency in terms of standards, enforcement, timescales for introduction and penalties for non-compliance
  • Introduction of a flexible and targeted diesel scrappage scheme, which provided assistance for companies looking to replace or retrofit older, more polluting commercial vehicles. The scheme should also incentivise private car owners to swap their existing car for a pure electric alternative, or give up their vehicles to use more sustainable modes of transport, such as car rental and car clubs
  • Encouragement and incentives for the fitment of Autonomous Emergency Braking and other technology proven to have a demonstrable impact on reducing road accidents
  • Removal of the need for commercial vehicle examiners to be directly employed by the Driver and Vehicle Standards Agency, and the provision of HGV testing via the same MoT testing model available for private cars and light commercial vehicles
  • The setting up of a Mobility Data Hub to provide a neutral voice advocating and providing guidance to realise the full potential of connected vehicles and their data. It would ensure fleet operators, vehicle manufacturers and third-party suppliers could share data in an open, secure and fair way

Commenting on the launch of the manifesto, BVRLA chief executive Gerry Keaney said “Policymakers face a real challenge, not just in terms of Brexit, but also in how the UK embraces the move towards data-driven mobility services. We believe this manifesto will ensure the big issues for our industry aren’t forgotten about.”

Meanwhile, with government figures highlighting a stalling in the reduction of the number of people killed and seriously injured on the UK’s roads – around 24,000 a year this decade – there are demands for the incoming government to commit to an overhaul of road safety in the new Parliament.

Road safety at work remained a “critical health and safety issue” that required higher priority and one which should be at the core of good corporate governance for every employer, according to IAM RoadSmart.

It has launched its own 12-point manifesto to drive down the number of people killed and seriously injured on UK roads. It calls all road safety professionals to “work together to reduce the numbers of people killed and seriously injured on the UK’s roads”.

The manifesto calls on legislators, car makers, social media and smartphone companies to work with road users on practical solutions to address driver distraction, especially smartphone usage and interactive dashboard information availability.

What’s more IAM RoadSmart urges employers and consumers to make “informed procurement choices” with the manifesto calling on government to implement cross-department procurement rules to accelerate the uptake of safe new vehicles with features such as autonomous braking.

The manifesto also calls on public and private sector companies to only issue contracts to firms with driver risk management policies in place.

The charity has also called for a reduction in the drink-drive limit in England and Wales, matching that already in place for Scotland – 50mg in every 100ml of blood.

The Parliamentary Advisory Council for Transport Safety (PACTS) has called on the new government to commit to:

  • A focus on safety for vulnerable road users
  • Effective action to tackle inappropriate speed and drink-driving – to include more use of technology where police numbers are stretched
  • Strong support for the proposed changes to European Union vehicle safety regulations
  • A renewed partnership between local authorities and government to deliver effective casualty reduction measures
  • Establishment of a UK road collision investigation body and an overhaul of how collision information is gathered and analysed.

David Davies, PACTS’ executive director, said: “We need to raise our ambitions in the UK and start planning for a road system which does not tolerate death and serious injury as a routine occurrence. There is currently a considerable focus on premature deaths from air pollution. We should remember deaths from road collisions are still the biggest killer of young people and the biggest risk to most of us in our daily lives. We need to bring together the agendas for safer and healthier cities.”

Michelin rejects 3mm legal tyre tread depth call arguing 1.6mm is ‘safe’

Michelin has rejected calls from industry experts for an increase in the minimum legal tread depth for tyres from 1.6mm to 3mm.

The tyre manufacturer says there is “no link” between tread depths at 1.6mm and increasing accident rates and highlighted that changing tyres at 3mm would cost fleets money and increase carbon emissions – especially as a tyre became more fuel-efficient as it wears.

Instead, Michelin is calling for a change to the tyre testing regime to reflect wet braking performance at 1.6mm.

However, RAC has highlighted that many tyre and safety experts believe the 1.6mm legal minimum is insufficient to guarantee safety with a minimum 3mm tread depth for tyre replacement recommended

Meanwhile, data obtained from the Driver and Vehicle Standards Agency by campaign group TyreSafe has revealed that dangerous or illegal tyres are the second most common reason for a vehicle MoT failure after lighting.

Tyres do not perform the same when new – and as a tyre wears, and the tread depth reduces, the difference in performance will change, and differences may be accentuated, according to Michelin.

That’s because tyre performance was affected by many individual characteristics; casing design, materials used, rubber compounds, tread design, shape of grooves and sipes etc.

Modern tyre technology makes it possible to provide high levels of performance and grip from new, and through all of the tyre’s life down to the legal tread wear limit, said the manufacturer.

With that in mind, changing tyres early – before they were fully worn – did not guarantee greater safety, and no current studies had established a direct link between accident levels and tyre tread depth, said the company.

Suggesting that tyres needed to be changed early – before the legal limit/tread wear indicator was reached – was akin to enforcing a form of planned obsolescence, said Michelin.

At present, tyre tests are carried out on new products, but there is no consideration given to how their levels of performance will change over time. Michelin has now raised that issue – the fact that the only factor for safety is tyre performance – not tread depth. It wants industry test bodies and consumer organisations to start comparing and testing tyres when they are worn to the legal limit.

Michelin said that as long as tyres were not damaged, the safety on dry roads actually improved as tyres got worn. The company argues that a worn tyre stops a vehicle more quickly in the dry than the same tyre when new.

Another surprising improvement in performance of a worn tyre over a new one is fuel consumption. As tyre tread depth reduces, the fuel economy of a vehicle will improve with one tank of fuel in five being used to simply overcome the rolling resistance of a vehicle’s tyres.

The rolling resistance of a tyre at the point of removal at the legal tread limit is 80% of that tyre in a new state. Therefore, keeping a tyre on the vehicle until the legal tread wear limit increases the time when it is in its most fuel efficient state, and reduces a driver’s fuel bill.

Michelin concludes: “[Fleets] should think carefully before changing tyres earlier than the legal tread limit as they will be removing the tyre when the dry braking performance and fuel efficiency will be at their peak.”

Michelin tests have shown that on wet roads, some worn tyres can perform as well as some new tyres, and that although the remaining tread depth is a factor in wet braking, the performance of the tyre, at all stages of its life, was more important.

RAC highlighted tests by UK technical organisation MIRA which found that, once tyres were below 3mm, stopping distances increase dramatically. The difference in wet braking distance between a tyre worn to 3mm and one worn to 1.6mm could be as much as 44%.

Whilst all tyres legally sold in Europe meet the minimum tyre labelling standard when new, Michelin says its tests have shown that the wet braking capabilities of some tyres reduced quickly when worn, and might fall below the ‘minimum standard’ requirement. However, it pointed out that some premium products not only met the criteria when new, they did so when worn to the legal tread wear limit.

Worn tyres can be dangerous in the wet because a tyre’s tread helps disperse water away from the contact patch between tyre and road. If there’s less tread depth, less water can be shifted, increasing the risk of aquaplaning and losing grip. In heavy rain, each tyre can shift one gallon of water every second, illustrating how hard tyres work. Therefore, the deeper the tread means tyres can work better, improving grip.

TyreSafe chairman Stuart Jackson said: “Regardless of legislation, drivers need to take their responsibilities to road safety seriously and carry out routine checks to stay tyre safe out on the roads.”

New data protection legislation to shake-up fleet operations

Employers must prepare themselves for the May 25, 2018 introduction of the General Data Protection Regulation (GDPR) which will have a potentially significant impact across organisations, and particularly for fleets.

GDPR builds on existing data protection legislation with a particular focus on digitalisation and technology. Core to the 1998 Data Protection Act are eight data protection “principles” and GDPR reforms those and introduces new “principles” of transparency and accountability with the ability to “prove consent” a significant pillar of the new regulations.

Supporters of ‘big data’ point to benefits that include reduced fleet vehicle downtime, safety and duty of care improvements and the early detection of faults and wear and tear before components ‘break’ thus reducing fleet service, maintenance and repair costs so aiding improved budgeting

Vehicle generated data can, according to the Society of Motor Manufacturers and Traders (SMMT), be divided into three distinct types:

  1. Non-brand differentiated – data that does not identify a vehicle or person. Examples include: activation of hazard warning lights, position of active emergency vehicles, road conditions, roadblocks and traffic flow data.
  2. Brand differentiated – data that is differentiated by vehicle manufacturer and, while anonymised, is used for brand-specific applications and support services for a vehicle. Examples include: lane marking perception, proprietary sensor data, engine operating map, gearbox operating map, engine injection behaviour, fuel pump performance, automatic transmission shifting behaviour, fault memory data, battery performance and stability control data.
  3. Personal data – data that supports services requiring user or vehicle identification so data handling must meet strict data and privacy protection requirements. Examples include: vehicle location, movement profile, average speed, acceleration, fuel and consumption levels, where they are combined with the Vehicle Identification Number (VIN) or some personal identifiers; navigation destinations, the user’s address book, personalised access to third-party services, infotainment settings, personalised in-car settings, and user’s health and wellbeing data.

However, the SMMT warns that “Type 1 and Type 2 data can easily become Type 3 personal data” the moment data is tied to a personal identifier, such as but not limited to the VIN. For example, it may be relevant for vehicle manufacturers to identify the registered keeper of a vehicle – or the driver – that has a fuel pump showing signs of a fault or an imminent breakdown so as to alert them to take the necessary action, in which case data protection regulations apply.”

It seems the advent of ‘big data’ and connected vehicles could fundamentally change the relationship between motor manufacturers, the vehicle leasing and fleet management industry, fleet decision-makers and company car drivers.

Motor manufacturers say they only use or share personal vehicle user data with the express and prior consent of that person and not the vehicle’s registered keeper. That is unless manufacturers have entered into a specific legal agreement with each registered keeper and/or have a contractual obligation to do so.

Therefore, by default, it seems that vehicle manufacturers are arguing that they do not have an obligation to provide vehicle data to registered keepers, which would include leasing companies and businesses that outright purchase their fleet vehicles.

That potentially means that data handling for fleets could get complex with vehicle manufacturers saying the primary user of a vehicle – the individual registering for the connected vehicle services and agreeing to the terms and conditions associated with them – must be put at the heart of any data consent process.

The Information Commissioner’s Office (ICO), which is responsible for enforcement of the law and is currently consulting on aspects of GDPR, has already undertaken some initial work with organisations, which include the Society of Motor Manufacturers and Traders (SMMT) and the British Vehicle Rental and Leasing Association (BVRLA) “in order to develop its understanding of the data protection and privacy risks arising from the deployment of connected and autonomous vehicle technology”.

An ICO spokeswoman said: “This provided some insight, but more information is needed on the types and uses of personal data processed when such vehicles are used, the way in which privacy notices are provided to people, and the level of control drivers and users have over connected services.

“As a result, the ICO plans further engagement with stakeholders to consider data protection issues related to connected and autonomous vehicles.”

The ICO in its response to a House of Lords Select Committee on Science and Technology’s call for evidence said: “There is a need to consider the volume and nature of the data that vehicles may generate and to adopt appropriate safeguards against misuse of individuals’ data.

“Personal data processed via connected and autonomous systems may include geolocation data, telematics, driver/user settings and collision information. There is also potential for data, which may initially be regarded as purely technical in nature, such as safety system information on the number of persons occupying a vehicle, to become personal data if it can be linked to a particular individual or individuals.”

Alex Ktorides, head of ethics and risk and a partner at law firm Gordon Dadds, told a recent fleet industry ‘big data’ conference: “‘Big data’ is all about having an ethical approach and that means transparency. Connected cars will generate huge amounts of data and the question is what happens to that data. It is crucial to make sure it is being ethically handled.

Calling GDPR a “big sea-change”, Mr Ktorides said with regards to connected cars and ‘big data’: “Some of the information will relate to employees and their behaviour so employers need to consider being completely transparent and hatch an ethical and transparent plan. Fleets need to plan how they will use that information and tell their employees.

“Businesses must be clear about what data they are gathering and why, where it is going and how it is being used and gain people’s consent.”

That, said Mr Ktorides, meant updating contracts of employment, employee terms and conditions and codes of conduct and he suggested anonymising data was a “very effective tool”.

He said: “If information is personal and identifies who a person is and how that employee is using their car and their behaviour then it impacts on their privacy and requires sign-off.

“There is huge value in gathering data, but that must be balanced against people having a right to privacy. Employers must put people’s rights at the forefront and show good governance and gain consent.”

Penalties for breaching the core “principles” of GDPR are potentially huge with a maximum fine for companies of €20 million or 4% of total worldwide annual turnover of the preceding financial year, whichever is the higher. What’s more, while the financial cost of data breaches is potentially huge, the reputational damage of businesses misusing data or losing it should not be under estimated.

Euro6 diesel company cars have a place on fleets with RV experts unmoved by media hysteria

There is nothing wrong with today’s Euro6 diesel engined cars, which are a “world away” from models of just five years ago and compared with 10 or 15 years ago they are “completely different”.

That’s the view of residual value experts as diesel, the favourite fuel of fleets since the introduction of carbon dioxide (CO2) emissions-based company car benefit-in-kind tax in 2002, has taken a media-led bashing over the last almost two years.

Diesel bashing started in the wake of the 2015 Volkswagen Group emission-cheating scandal dubbed ‘dieselgate’ and the hysteria has grown louder amid concerns over air quality and it being a ‘silent killer’ contributing to 40,000 premature deaths a year in the UK.

However, those denigrating diesel as a fuel conveniently choose to ignore the huge technological strides motor manufacturers have made in recent years. Indeed, the Society of Motor Manufacturers and Traders call today’s Euro6 emission compliant diesel engines “the cleanest in history – and light years away from their older counterparts”.

Manufacturer investment in new Euro6 emission diesel engine technology has been driven by fuel economy and government legislation and James Dower, senior editor of CAP HPI’s used car price guide Black Book, said: “It is still more beneficial to run a diesel car as a company car because of the lower CO2 and also lower benefit-in-kind tax rates.”

The organisation argues that a lot of media reporting “demonising diesel” has “not been very insightful, well-led or well-informed” in relation to the impact of CO2 and nitrogen oxide emissions and what is happening long term.

“Pollution is not the same across all diesel vehicles,” according to Andrew Mee, senior forecasting editor CAP HPI. “Euro6 vehicles are very clean, but older vehicles are more polluting.”

It’s a view shared by Rupert Pontin, director of valuations at rival Glass’s, who said: “There is a lot of negativity in the market at the moment.

“From a press point of view there are a number of people making connections that just aren’t there at the moment. Although there is a high level of speculation around what will happen to inner city congestion charging for diesels, there is little actual fact to date. Equally we wait to hear what will happen to diesel company car benefit-in-kind taxation in the Autumn Budget. Some clarity on these points – and whether there will be a scrappage scheme [for older diesel vehicles] – would be very settling and helpful for both the fleet and private market.”

The multi-billion investment in “clean” Euro6 diesel engine technology versus the emissions standards of older vehicles had, according to CAP HPI, created marketplace confusion based on “either incorrect assumptions or implications or information that is just wrong”, according to Dylan Setterfield, international forecast manager at automotive data and intelligence providers CAP HPI.

However, while Euro6 diesel emission vehicles have been in showrooms since 2014, the used car market is suffering because of potential legislation – Clean Air Zones (The Buzz: May 2017) and possible changes in diesel vehicle taxation as well as the impact on consumers of the fall-out from the September 2015 Volkswagen Group scandal surrounding the fitment of emission cheating devices to diesel models – and that was having an adverse impact on residual values in some market sectors. But that decline is not all due to second hand byer concerns over air quality.

New diesel models typically cost around £1,200-£1,400 more than their petrol-engined equivalents and that additional percentage of cost new premium is reflected in the used market translating into perhaps around £750.

Improvements in small car petrol-engine fuel economy and performance with the advent of three-cylinder engines coupled with the volume of small diesel cars in the market has resulted in an erosion of the diesel premium to perhaps £250-£300 and, in some cases, price parity.

As a result, some petrol models, especially in the city car and supermini segments, have moved towards parity with their diesel equivalents on a whole life cost basis.

Mr Mee said: “Slippage on diesel values has been happening for a number of years and looking to the future that is likely to continue as part of a long-term trend. It is likely that with all the bad press and publicity that the rate of deflation for small diesel vehicles will slightly increase.”

But with the vast majority of diesel company cars being in the lower medium sector and above, Mr Mee said: “It is likely that larger vehicles where diesel engines make sense [the publicity] may not have that effect.”

However, any potential decline is likely to hit older diesel vehicles as they will almost certainly be the models impacted by new legislation – as indicated by the entry criteria for London’s Ultra-Low Emission Zone and future Clean Air Zones – and therefore, according to Mr Mee: “Lose their value more quickly. But those older vehicles are worth less so there is less money to lose if they are impacted.”

Meanwhile, Mr Pontin has hinted at a potential ‘regionalisation’ of demand for defleeted diesel cars in the future.

He said: “It will be older diesel cars that will be more difficult to sell, although this will possibly become a regional issue bearing in mind the fact that it will be city drivers that will be penalised by Clean Air Zone charging. Older diesels that spend more time driven in the country will not be affected.”

Mr Setterfield concluded: “There is nothing wrong with today’s diesels. We need to concentrate on the most polluting vehicles and that is certainly not today’s modern diesel cars.”

Agreement came from Mr Pontin, who said: “The newest generation Euro6 diesels are much better for the environment than their predecessors and from a pollution perspective are only marginally worse than a petrol car.

“From a fleet perspective whilst there is a need for concern there is no need for panic yet. Residual value setters, Glass’s included, have yet to significantly downwardly adjust forecast values and at this stage see no reason to based on the facts.”

Meet the team – Marcus Bray

Name:  Marcus Alexander Bray

Job Title:  Head of sales

Explain your role in 10 words: To secure new business and account manage existing customers’ needs

What’s the best aspect of your job?  Winning new business

What’s the worst aspect of your job?  Tenders!

How long have you worked at Fleet Service GB?  October 2014 – I was first in the door!

What was your first paid job? Cleaner

What’s your favourite car?  Range Rover – the big one!

What one thing would you like to achieve before you retire?  Industry recognition – work related.

Outside of Fleet Service GB, what would your dream job be?  Professional footballer

Who in the world would you most like to meet? Donald Trump

What is your favourite way to spend a day outside of work? Playing or watching sport

If you won the lottery how would you spend the cash? Home, holiday, cars and extravagance….! Apart from that, I’ve no idea!

Not a lot of people know that: When I played football, I had the worst disciplinary record in the country with 21 red cards. All by the time I was 26!