Electric cars have received a funding boost with the government earmarking £340m for a national charging network and subsidies for vehicle purchases.
However, further budget backing for greener vehicles was limited to a small rise in vehicle excise duty for new diesel cars that fail to meet rigorous emissions standards – disappointing campaigners who had hoped for a rise in fuel duty or a diesel scrappage scheme.
The government will contribute £200m to a £400m fund to upgrade the electric car-charging infrastructure, as well as setting aside a further £40m for research and development into charging technology. The chancellor committed a further £100m to maintain a car-buying subsidy until 2020, which contributes up to £4,500 towards the cost of buying an electric vehicle.
There are 115,000 electric cars in the UK and 13,000 charging points spread across 4,500 locations.
Announcing the electric car funding, Philip Hammond said: “Our future vehicles will be driverless, but they’ll be electric first. And that’s a change that needs to come as soon as possible.”
Although moves on driverless cars had been widely trailed before the budget, the chancellor only made passing reference to the technology in his speech. However, the budget report confirms that the government will reform road laws to allow self-driving cars on UK roads by 2021.
Other measures in the budget to increase the take-up of next generation vehicles will include a commitment to make 25% of cars in central government department fleets electric by 2022, and to remove any tax for employees who recharge their vehicles at work. An innovation prize will also be launched by the National Infrastructure Commission to determine how roads should be built to support self-driving cars.
The Petrol Retailers Association – whose members may soon be forced by law to install charging points alongside pumps – said it hoped the £400m charging fund would be partly ringfenced for them, adding: “If the government insists on mandating EV charging equipment upon retailers, they must be prepared share some of the financial burden.”
Meanwhile, Hammond made limited moves to tackle diesel, saying the “tax system can play an important role in protecting our environment”. Diesel cars that have yet to pass on-the-road emissions tests will move to a higher tax band for vehicle excise duty. Along with a 1% rise in company car tax for diesel vehicles, the move would fund a £220m clean air fund, Hammond said.
But documents published by the Treasury said carbuyers’ response to the policy change would be “negligible” – putting a one-off £20 on the cost of a new Ford Focus.
Some campaigners said it remained an important symbolic move. Dr Penny Woods, of the British Lung Foundation, said: “Increasing tax on new diesel cars sends a clear message that diesel is toxic.”
However, the mayor of London, Sadiq Khan, said: “The measures announced to clean up our polluted air are totally inadequate – and no action to introduce a desperately needed diesel scrappage fund.”
Hammond admitted he was averting negative headlines by not bringing in wider moves on diesel and continuing to freeze fuel duty. He said: “No white van man (or woman) will be hit by these measures.”
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