Chancellor pledges funding for ‘clean’ transport

Chancellor Philip Hammond has announced £390 million in funding for ultra-low emission vehicles and renewable fuels as part in his Autumn Statement in Parliament today (23 November).


Philip Hammond delivered his Autumn Statement today

The funding will be delivered as part of the National Productivity Investment Fund (NPIF) which will invest £390 million by 2020-21 in ULEVs, renewable fuels and connected and autonomous vehicles (CAVs).

The NPIF will provide £23 billion of spending between 2017-18 and 2021-22 the Treasury confirmed, targeted at four areas that are ‘critical’ for improving productivity: housing, transport, digital communications, and research and development (R&D).

The £390 million investment in sustainable transport includes £80 million for ULEV charging infrastructure, £150 million in support for low emission buses and taxis, £20 million for the development of alternative aviation and heavy goods vehicle fuels, and £100 million for new UK CAV testing infrastructure.

In addition to tax incentives for ULEVs in company tax and salary schemes, from today (23 November) to the end of March 2019 the government will also offer 100% first-year allowances to companies investing in charge-points for electric vehicles.

Company Car Tax (CCT) bands and rates for 2020-21 will provide stronger incentives for the purchase of ULEVs. New, lower bands will be introduced for the lowest emitting cars, while the appropriate percentage for cars emitting greater than 90g CO2 /km will rise by 1 percentage point.

Last month, the Department for Transport launched a £35 million package to boost the uptake of ultra-low emission cars and scooters (see story) as well as committing to an additional £4 million to the plug-in van grant scheme, to help businesses switch vans and trucks to electric (see story).

Fuel tax

Despite of the incentives for ULEVs, green campaigners are likely to be disappointed by the government’s continued support for fuel duty. The fuel duty was planned to rise next year, but this was cancelled by Chancellor Philip Hammond in his Autumn Statement today. The duty has been frozen at 57.95p per litre for seven years.

Fuel duty determines the price of diesel and petrol. The freeze is essentially a tax cut for drivers of diesel and petrol cars — far from the diesel charging schemes industry stakeholders have been calling for (see story).

Sam Boileau, environmental law partner at law firm Dentons, commented:  “Anyone hoping for bold environmental policy announcements from the Autumn Statement will be disappointed. Apart from some measures linked to infrastructure spending, such as flood defence and electric car charging points, environmental policy commitments were thin on the ground, to say the least.”

He added: “The statement made no mention of the recently ratified Paris Agreement, nor did it mention the important issue of the UK’s Air Quality Plan, which was recently declared unlawful in the High Court.

Noting that new expenditure on environmental regulation is “constrained by the economic forecasts and the effect of Brexit,” Mr Boileau said: “the absence of environmental policy content in the Autumn Statement comes as no surprise. But it underlines the importance of engaging with Government now to educate policy makers on those areas of environmental policy — and there are a few of them – where clarity in the context of Brexit is most urgently required.”

Reacting to the chancellor’s Autumn Statement, Friends of the Earth senior campaigner Liz Hutchins said: “The Chancellor is pootling along in the slow lane, when the UK needs to be on the fast track to a low-carbon economy.”

She added: “Investment in electric vehicles is welcome — but this over-shadowed by the huge sums committed to roads which will cause more pollution. The government must do far more to make the UK the global low carbon powerhouse we so urgently need — the political will is still sadly lacking.”


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