Unprecedented situations call for unprecedented measures and this week’s Budget provided welcome reassurance to many businesses and workers as they attempt to manage the likely effects of coronavirus. Given the immediate challenges, it was also good news to see the continuation of a plug-in car grant – proven to be critical in supporting such very early markets – until 2022-23.
Less welcome, however, was the decision to reduce the grant, overnight, by some £500 while removing it entirely for some of the latest premium and advanced technology zero emission cars coming to market. It’s the third time the plug-in car grant has been cut since 2011 and slashing it overnight with just six hours’ warning caused significant industry disruption, and many consumers who ordered cars trusting they would benefit from the grant will now be left considerably out of pocket.
Penalising early adopters that are taking a first leap on new technology sends entirely the wrong message to the market, and will mean yet more confusion for car buyers.
SMMT is working with members to identify how much of an effect the move will have, and this information will be fed into Government, but ultimately it goes against both evidence and ambition. Making zero emission motoring a more viable option for more drivers – essential if we are to begin to meet extremely challenging environmental aims.
The removal of the premium car surcharge on VED and reduction in company car tax for zero emission vehicles, as well as a strategic review of national charging infrastructure requirements, should help encourage consumers and support the beginnings of a market transition. These are some of the supportive measures we urgently need, rather than talk of bans and the removal of incentives for what is still expensive technology.
Of course, much more needs to be done to maximise the opportunities as we transition the UK market and industry to new technologies, and the promised spending review in the summer and subsequent Green Budget planned for autumn will be a crucial moment for government to set out a long term vision for transport decarbonisation and industry investment in the UK.
In the meantime, however, the number one priority must be the health and wellbeing of everyone as the world faces the worst public health emergency in a generation.