As has been pointed out elsewhere, the chancellor of the exchequer, Philip Hammond, had limited fiscal options ahead of the 2017 Budget, so he opted to piggy-back on areas of the economy where change was already afoot – thereby reducing any imperative for financial intervention on the part of HM Government.
The motor industry obviously fits the bill on that score. With sales of new diesel cars in retreat, changes in vehicle excise duties have been announced. From next April, new diesel cars that fail to meet the latest emissions standards will move up to a higher ratings band, which could cost drivers up to £500 in the first year of road tax. The new regime wasn’t fully fleshed-out in the House of Commons, but we do know that new vans escaped the levy.
In addition, the supplement for fleet car drivers who opt for a diesel car will go up by 1 per cent, with the proceeds earmarked for a £220m clean air fund – whatever that is.
Tellingly, the chancellor did not announce the one measure that would have cleared the roads of lung-busting diesels in next to no time – a government backed scrappage scheme. German automakers must have breathed a sigh of relief, albeit a particulate-laden sigh.
The hybrid/electric vehicle (EV) industry has established its own impetus in the wider auto market, so any assistance from No 11 would generate some easy column inches. One of the main impediments to the roll-out of electric motoring is paucity of the supporting infrastructure. The government, therefore, has decided to invest £400m for additional infrastructure and charging points. A few months back, BP (BP.) announced that it was in talks with EV manufacturers over the installation of charging points across its network. So, it wouldn’t be fanciful to suggest that we could see real movement on this issue over the next couple of years.
An extra £100m is being made available to continue to incentivise the sale of ultra-low emission vehicles, while motorists who charge their EVs at work will not be taxed for ‘benefit in kind’. Discounts of £4,500 will continue for buyers of Category 1 cars — those emitting less than 50g/km of CO2 and capable of being driven for 70 miles in electric mode. The £2,500 grant has also been maintained for Category 2 vehicles — less than 50g/km of CO2 and capable of travelling for a minimum of 10 miles in electric operating mode.
However, vehicles that cost over £60,000 and meet Category 2 criteria will no longer qualify – bad news if you’re buying a Tesla Model X.
