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Blow to carmakers

Mark Mardell | 13:54 UK time, Thursday, 25 September 2008

What is more important, people's jobs or fighting climate change? Or is there no real conflict?

There's been a surprising defeat for European carmakers and their allies over the new plans to cut back greenhouse gases. A carefully stitched-together deal between the two big groupings of left and right in the European Parliament came apart at the seams, as Socialists worried about their green credentials voted against the party line in the environment committee.

Most expected them to water down the European Commission's proposals for an average emission of 130g of carbon per kilometre driven in four years' time. The manufacturers hoped it would be phased in gradually, giving them 12 years to meet the target. Plans to cut fines for those who break the rules have also been thrown out. VW Golf

The Liberal Democrats' Chris Davies told me it was "utterly astonishing, the press release I prepared before the meeting has been torn up.

"What has happened is that the German car lobby, which has been exerting enormous pressure on MEPs, has been sent away with its tail between its legs."

Despite the huge pressure being put on them by party leaders and corporate lobbyists doing the rounds MEPs have refused to be bullied.

But the Conservatives are worried. Martin Callanan told me: "almost 200,000 people's jobs in the UK depend on car manufacturing and already we've seen cutbacks in production in August. I know the figures in September are even worse, so it won't be long before we see lay-offs. We have to be very careful. The vote today makes lay-offs, a loss of jobs more likely, there's no question".

Why? I ask him.

"Because manufacturers are making less money from smaller cars, many of them are imported into the EU and of course this is forcing manufacturers to produce smaller, more fuel-efficient cars, but making consumers buy them is the other side of the equation. And of course if people keep their older, more polluting cars on the roads for longer nobody gains, we loose jobs and the environment suffers as well."

Labour MEPs I speak to are in the odd position of voting for the compromise, because they thought it was the easiest way of getting some sort of deal, but are now quite happy to go with the tougher, original package.

What happens now will be interesting, and rather complex. Most committee votes are a result of pre-arranged deals between the political groups and it can be taken for granted when the full parliament votes it will back them. In this case, the German government, and perhaps others with large-scale manufacturing, are not happy.

It will be up to the French presidency, with a reputation for being a bit cavalier with their brief, to work out something acceptable to the MEPs and the national governments. Then - the theory is - party discipline will hold. Chris Davies may want to hang onto his press release, and in the interest of the environment, recycle it in December.

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