Outlook: Prescott's challenge for the British car industry

outlook on labour's plans for the car, a discount rights issue and qualifying for monetary union

This Government is not anti-car. Definitely not. It was mere coincidence, therefore, that it chose to take the gloss off the opening day of the London Motor Show with a gruesome set of forecasts demonstrating how the motor vehicle will slowly choke the life out of our cities and beauty spots over the next 34 years.

The projections, compiled for the Daimler-driving Deputy Prime Minister John Prescott, suggest that journey times in some parts of the country will double by 2031, while traffic levels are forecast to grow by a thumping 60 per cent. The forecasts are based on the assumption that no more major roads are built and their purpose is to demonstrate that Something Must Be Done to check the inexorable rise of the internal combustion engine.

Labour shows every intention of getting tough on the motor car. The difficulty lies in finding a way of doing this without also checking economic growth. For the reality is that traffic growth and rising car ownership merely reflect the fact that people are living longer, getting richer and ncreasing their economic output.

Penalising car ownership can therefore have little appeal to a government looking to get re-elected. Making car useage more expensive might seem a rather more vote-friendly alternative if the twin goals can be sold as those of curbing congestion and pollution. Car ownership, per capita, remains lower in the UK than in many other parts of Europe.

But we are a small country, so a squeeze on car useage is surely coming, whether it be through punitive increases in fuel duty, road pricing or a further assault on the tax perks enjoyed by car users. The motor industry has learnt how to make cars more affordable through lean production methods. Now the challenge is to make them cheaper to run and less harmful to the environment at the same time, so that dual car ownership can still be justified.

There is still a belief in some quarters that too many jobs depend on the motor industry for the Government to play fast and loose. But, as Mr Prescott is making clear, we are no longer living in Mrs Thatcher's "great car economy" - something that the next Budget is likely to make painfully obvious.