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MPs urge chancellor to boost EV adoption with tax incentives

A cross-party group of 42 Parliamentarians have called upon the Chancellor of the Exchequer, Phillip Hammond, to use this upcoming budget to stimulate the uptake of electric vehicles (EVs).

A countersigned letter from the chair of the Environment, Food and Rural Affairs Committee, Neil Parish MP, urging the Government for tax incentives to drive the uptake of electric vehicles was delivered to the chancellor today (October 23).

The correspondence states that taxation policy is a critical lever in stimulating demand for EVs among business users and suggests that a company car tax reduction to 2% be brought forward to April 2019, rather than maintaining the current plan to increase it to 16% in 2019/20, before falling to 2% in 2010/21.

Neil Parish MP said: “We are urging the Chancellor to bring forward a planned reduction in company car tax by just one year.

“Patchwork tax policy is not helping drive consumer behaviour and should be replaced with streamlined legislation to encourage the uptake of electric vehicles.

“The Government cannot tackle the urgent issue of air pollution with the handbrake on.”

The letters emphasise the commitment being made by the vehicle rental and leasing industry reiterating the BVRLA Plug-in Pledge that will increase the number of plug-in vehicles from 50,000 today, to 720,000 by 2025.

BVRLA chief executive, Gerry Keaney, said: “Last week the BEIS Select Committee made clear in its report about driving the transition to electric vehicles that time is of the essence if Government is serious about the UK leading the transition to zero emission.

“This month’s Budget provides the chancellor with the perfect opportunity to address the glaring lack of cross-government alignment when it comes to creating a supportive environment to incentive the uptake of electric vehicles.

“The whole automotive industry is speaking with one voice on this, and we are pleased to see that Parliamentarians from across all parties are supportive of our calls.

“We can now only hope that on Budget day, the chancellor will support our collective voice of reason and take the right steps to create a tax system that incentivises the uptake of zero-emission vehicles, rather than one than prevents progress.”

Just last week AM reported how BEIS had demanded that Government imposes an outright ban on the sale of all petrol and diesel vehicles by 2032 in a bid "fast track" adoption of electric vehicles (EVs).

The cross-party committee branded the Government’s current emissions-cutting plan as “ambiguous”, criticising it for failing to enforce a ban on hybrids in 22 years’ time and stating that “zero should mean zero”.

Rachel Reeves MP, chairman of the Committee, said: “The UK Government’s targets on zero-emissions vehicles are unambitious and vague, giving little clarity or incentive to industry or the consumer to invest in electric cars.

“If we are serious about being EV world leaders, the Government must come forward with a target of new sales of cars and vans to be zero emission by 2032.”

BEIS also attacked last week’s decision by the Department for Transport (DfT) and Office for Low Emission Vehicles (OLEV) to cut the plug-in car grant.

On October 12 the Department for Transport (DfT) confirmed that the grant for hybrids will be cut by £1,000 and no longer apply to cars with a zero-emissions range of less than 70 miles, from November 12.

Under the new regime, car buyers looking to invest in a full EV will see their grant entitlement fall from £4,500 to £3,500.

The BEIS report said that this move had been “made too soon and too suddenly”, and “risks undermining the UK’s burgeoning EV market”.

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