Budget: tougher calls needed to cut emissions

Chancellor Phillip Hammond said in today’s Budget ‘our future vehicles will be driverless but they’ll be electric first’.

The past year has seen a raft of measures to turn the UK fleet electric and improve our air quality, but do government plans go far enough?

The government has already pledged to get 9% of drivers behind the electric wheel by 2020, with a number of companies announcing they will stop producing diesel and petrol vehicles in the same year.

But where existing measures have sought to reduce the cost of electric vehicles and improve the supporting infrastructure, today’s announcement of a tax on diesel cars goes one step further by actively disincentivising people from buying cars that are not electric. It suggests the government wants to see change happen faster and is willing to tackle the problem from multiple angles.

However, given the new tax will add just £20 to ‘normal’ diesel cars (90-100 CO2/km), and only in the first year, this is merely tokenistic. In addition, vans are exempt, despite being one of the largest contributors to air pollution. This is presumably to avoid impacting too heavily on small businesses.

The chancellor has also announced a freeze on fuel duty, when an increase would have acted as a much more powerful deterrent to buying diesel cars. Clearly, Philip Hammond is reluctant to take such a decision, given the measure would affect existing consumers who the government originally encouraged to switch to diesel.

The additional £400m for electric charge points does lend credibility to the government’s commitment to increasing the number of electric vehicles on our roads. Clarification that there will be no benefit in kind charge on electricity that employers provide to charge employees’ electric vehicles is also welcome.

Overall, the government could have gone further. To truly start making a dent in vehicle emissions, reach their own ambitious targets for electric vehicle uptake and improve the quality of our air, it will need to start making some tougher calls.

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Oliver Rix

Oliver Rix

Partner, Baringa Partners

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