Director General's Blog


Making the 2035 deadline achievable

6 February 2020

By Stephen Haddrill, Director General


The Government’s decision to bring forward the ban on selling new petrol, diesel and hybrid cars from 2040 to 2035 will require the concerted efforts of politicians, regulators, manufacturers, lenders, utilities and planners to make it achievable.

In fact, the Government should be gathering us all around a table to sort out a credible delivery plan.  

The discussion could usefully start by addressing demand. Combatting range anxiety is an understandable barrier to the uptake of low emission vehicles (LEVs). After all, why would anyone expect people to spend money on a car that they suspect might leave them stranded on the side of the road. Building demand depends on the creation of a charging network that every driver in the UK can trust to be close, available and reliable.

With motor finance currently used in 91% of private new car purchases, the FLA is right at the centre of any debate about increasing the uptake of LEVs. We also have expertise to offer on the use of asset finance (leasing and hire purchase) by businesses to help fund a truly comprehensive charging network.

So, our recommendations for making 2035 an achievable target?

Update the Consumer Credit Act (CCA) because, in its current form, it can make buying an LEV a cumbersome process for customers as the CCA is not compatible with the features of the emerging LEV market – for example, where vehicles are comprised of more than one asset with perhaps differing rates of depreciation, and where often more than one user is involved with the vehicle.

The market for LEVs is relatively new and still evolving, so the available depreciation data isn’t comprehensive, and the assets may not depreciate in a predictable way – for instance developments in next generation batteries may undermine the value of their predecessors. Therefore, a risk sharing scheme developed between the Government and British Business Bank, along the same lines as the asset finance variant of the Enterprise Finance Guarantee, would go some way to encourage investment, and keep the cost of finance manageable for consumers. 

Asset finance lenders are already working with local authorities in different areas to help fund the roll out of commercial and private hire LEVs, and to expand the infrastructure for charging networks. But this kind of enterprise is patchy and needs to be coordinated to ensure that uptake of LEVs and expansion of the charging network is happening in every local authority.

Asset Finance increasingly popular with SMEs

22 Jan 2020
Lending to small and medium businesses has been falling for some time, especially outside the South East. It has been suggested that this shows SMEs are cash rich but unwilling to invest. There is some truth in both statements. But there is also a ray of hope if we look beyond the use of conventional borrowing and overdraft facilities.
Read more

The Road to a Greener Car Market

16 Jan 2020
During his time as Governor of the Bank of England, Mark Carney has been a leading voice in encouraging policymakers, business and investors to recognise the key role of markets, financial and otherwise, in tackling climate change.
Read more

Thoughts on the General Election

13 Dec 2019
After the turbulence of recent months, we now have a Government with a mandate to govern for a full term – and the numbers to get business through the House of Commons. That list of business is very long, and of course begins with negotiating a rather tricky post-Brexit trade deal, not to mention a brewing storm about the unity of the UK. As strong as the SNP are in Scotland, their influence in Westminster has been blown away by the size of the Conservative majority. And what about unity more generally? Some basis for co-existence between leavers and remainers needs to be found. So, what are the implications of the General Election results for the financial services sector and FLA members in particular?
Read more

Become a member

What are the benefits of becoming an FLA Member?