2017’s Autumn budget was highly anticipated due to the wider context surrounding it. Arriving in the midst of Brexit negotiations and shortly after the release of the Clean Growth Strategy, which presented green business as a potential key area for the UK economy.
The investment commitments and proposals that were presented in the Autumn budget appear to reinforce the support of increasing the uptake of electric vehicles, aligning with the government’s proposal in July 2017, to ban sales of new petrol and diesel vehicles in the UK from 2040, which could help to drive the UK to achieve objectives set out in the Clean Growth Strategy.
In fact, the most noteworthy aspect of the autumn budget in relation to the green economy is the high level of investment and continued commitment that has been proposed in the area of electric vehicles (EV’s). Although many commentators praised the proposal, there was also a recognition that this requires a concerted effort, both in the private sector and through government spending, to deliver the conditions that will make for a smooth, viable transition.
Therefore, the commitment to establish a new £400 million charging infrastructure fund, invest an extra £100 million in the plug-in-car grant and £40 million in charging R&D underlines the government’s commitment to its 2040 plan.
More than just the level of investment, the type of investment signifies that the government is aware of the key issues preventing individuals and businesses alike from switching to hybrid or purely electric transport, and is taking steps to solve these problems.
The trilemma that is restricting the greater adoption of EV’s in the UK is made up of range anxiety, charging time and price. The complex issues are caused due to the shorter range that EV’s can travel on one charge in comparison to the range of petrol and diesel powered vehicles on one tank of fuel, a lack of charging points, the cost of electric vehicles and the time it takes to charge them. It also must be stated that these issues do not present easy solutions as simply introducing more charging points would put a lot of strain on the National Grid due to the increase in demand.
With the above factors, it is clear that solving charging infrastructure challenges are of vital importance if uptake of EV’s is to accelerate as quickly as required for the 2040 plans. It seems that the scale of government investment in this area reaffirms that the government retains the levels of commitment and industry knowledge to oversee a successful transition to an EV led private transport network.
This was further underpinned by the announcement in the Industrial Strategy of the Faraday Challenge, an investment project which includes a £45 million competition to establish a centre for EV battery research.
The government has also committed to clarifying the law so that people who charge their EV’s at work will not face a benefit-in-kind charge, to further incentivise the uptake of EV’s. The government’s commitment to supporting EV’s is summarised by the Chancellor of the Exchequer, Philip Hammond saying “Our future vehicles will be driverless but they will be electric first, and that’s a change that needs to come as soon as possible for our planet.”
Aside from the subject of EV’s, the autumn budget is less positive. The main subject of criticism has been the decision to allow a tax break for the North Sea oil and gas fields, coming alongside the Chancellor’s explanation that it is “an innovative tax policy that will encourage new entrants to bring fresh investment to a basin that still holds up to 20 billion barrels of oil”.
This decision to actively support a fossil fuel through a tax break has angered many, especially as there will be no new money for renewables until at least 2025.
In addition to this, the government has received criticism for not going far enough to disincentivise people from purchasing diesel cars. Although the government announced an increase in diesel taxes, many hoped for a diesel scrappage scheme to help those who purchased diesel fuelled vehicles to switch to a cleaner alternative.
Aaron Kiely, Friends of the Earth’s air pollution campaigner commented “…The Government must introduce a diesel scrappage scheme to help drivers who bought diesel’s in good faith switch to cleaner transport – in part funded by manufacturers. It’s outrageous that in 21st century Britain, there are children growing up with smaller lungs because of the filthy air they’re breathing.”
It seems that despite a positive stance on EV’s, there are still a significant number of dissenting voices in the green business community surrounding the autumn budget.
Regardless of the cause for concern around the government’s environmental ambition as a whole, the overwhelmingly positive stance on EV’s cannot be ignored. EV’s are significantly more environmentally friendly than petrol and diesel vehicles and the level and direction of investment upholds the claim made by the government in the well-received Clean Growth Strategy to establish the UK as one of the best EV networks in the world by investing in the charging network.
To learn more about the trilemma which is restricting the greater adoption of EV’s and one of the potential solutions view the VIRTUE EV brochure here.
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