Budget: Fleet industry reacts to Chancellor’s plans. Subscribe to Electric Vehicle News Bitesize Podcast for FREE to hear more!
The fleet industry and the wider automotive industry welcomed the fuel tax freeze announced in the budget, but criticized the government for not including anything on electric vehicle infrastructure.
The chancellor froze fuel duty and kept the 5 pence per litre cut introduced last year in place for another 12 months.
He also announced a replacement for the super deduction introduced in 2021, under which fleet operators buying vans and trucks can benefit from a new “full expensing” policy.
However, the chancellor disappointed many in the fleet sector by saying nothing about electric vehicle infrastructure.
Paul Hollick, president of the Association of Fleet Professionals (AFP), would like to see measures announced, ranging from electric vehicle charging regulations to national harmonization of clean air zones, as outlined in their recent tax and regulation manifesto.
However, he said: “There was little content that showed the Government has been thinking about business road transport.
“The one bright point for fleets was the freeze in fuel duty. An increase in 11 pence per litre would’ve been extremely unwelcome at a point in time when the economy is struggling and removing that possibility is very much welcome.
“Further positives are difficult to identify but a recognition that more people need to be encouraged back into the workforce, through pension changes and childcare measures, could potentially help to a degree in a fleet sector where recruitment remains an issue.”
Karl Howkins, managing director of Sogo, said: “As a country, we’ve set ambitious goals to stop the sale of ICE vehicles by 2035. Sogo is doing its bit by helping fleets access the latest Electric Vehicle flexibly, but the Government needs to support a step change investment to ensure the pace of adoption doesn’t slow.
“The current positive tax regime for EVs should be extended to hasten the mass adoption of Electric Vehicle technology, and further incentives should be given to support the public charging infrastructure on the nation’s highways.
“There will be bumps in the road ahead, and we should not take the current pace of Electric Vehicle adoption as a given.”
Nick Williams, transport managing director at Lloyds Banking Group, said: “It’s disappointing that today’s statement from the Chancellor announced no new support to strengthen the UK’s electric vehicle charging infrastructure.
“It remains impressive that electric vehicles are entering the roads at record rates, but to meet this growing demand we need a charging network that can deliver, both in terms of availability and reliability. To achieve this, rapid expansion will be key.
“With the upcoming Zero Emissions Vehicle mandate also incentivising manufacturers to bring more electric vehicles to the UK market, the call for an expanded charging network will be even greater, so the lack of support in today’s Statement is a big setback.
“We’re hopeful that the Government will reveal more plans ahead of its implementation next year, or we risk impacting the longer-term uptake of electric vehicles as confidence in our country’s infrastructure waivers.”
Philip Nothard, chair at the Vehicle Remarketing Association (VRA), said: “The freeze in fuel duty and additional help for potholes are both welcome while the childcare and pension measures designed to get people back into the workforce are good ideas which, given the labour shortages that we are seeing across remarketing, may have a positive effect.”
He added: “We have been highlighting the need for some form of support in the used market for electric vehicles and there was no news in that area today, but we remain hopeful that the Government are listening to the points we are making and will take action relatively soon.
“This is something that is very much needed to ensure the smooth electrification of the used Electric Vehicle sector.”
Mike Palmer, client development director at Nexus Vehicle Rental, welcomed the freeze in fuel duty, especially as businesses grapple with rising costs.
“Aside from fuel duty, it was reported in February that businesses have seen total vehicle operating costs rise 12.6%, and in November 2022, it was forecast that drivers could see a significant jump of 12 pence a litre at the pump which, combined with other rising costs, could have become catastrophic for businesses operating fleets,” he said.
“In a time of such economic uncertainty, the continued freeze on fuel duty will in part help to alleviate the pressures of rising costs amongst businesses and drivers.
“We are also encouraged to see that an extra £200 million investment into pothole repairs has been confirmed by the Chancellor.
“Potholes cause significant damage to vehicles and can greatly impact businesses financially. To see that this problem will be addressed is a positive result for businesses and fleets alike.”
While the government has previously signaled a greener future, Palmer said it was again surprising the government had not mentioned additional measures to support the transition to electric vehicles, given the imminent 2030 ban on petrol and diesel cars.
“Whilst the Government has made noise about commitments to the 2050 net-zero goal, there does not appear to be much action to ensure that the infrastructure is in place in the UK.
“There were more than 690,000 battery electric cars registered by the end of February 2023, yet the current infrastructure to support this growth does not match.
“The Government need a plan to build more charging points, otherwise the goal of a net-zero targets by 2050 looks increasingly unlikely, as does the 2030 ban on the sale of petrol cars.
“We would have liked to see the Government set out an updated plan to ensure that infrastructure and the charging network is fit for purpose across the UK to support businesses looking to transition to electric at this time.”
Jon Lawes, managing director of Novuna Vehicle Solutions, said: “The fuel duty freeze and continued 5 pence per litre reduction will be critical in assisting the growth of business fleets across the UK.
“Without this action from the Chancellor today, fleet businesses would have faced significant operating costs this spring.
“The decision not to lower the VAT on public electric vehicle chargers or improve Electric Vehicle infrastructure, on the other hand, is disappointing.
“A VAT cut would level the playing field for those who are unable to charge their vehicles at home due to a lack of off-street parking or an inability to install a home charge point.
“Furthermore, with the current number of public charging stations unable to meet Electric Vehicle demand, implementing a plan to increase public chargers could have aided in overcoming some of the Electric Vehicle industry’s challenges.
“The Chancellor should have taken more direct action on Electric Vehicle infrastructure today. The current system is unfit for 2030 goals and the industry has once again been left without a clear direction.”
Welcoming the freeze in fuel duty, Jack Cousens, the Automobile Association’s head of roads policy, said: “We are pleased the Chancellor has listened to the Automobile Association and frozen fuel duty.
“Not only will this save drivers ‘heavy duty’ pain at the pump, but will help keep the price of goods and services down as they are mainly transported by road. Crippling road fuel costs are also a major driver of inflation.”
On the extra £200m to fix potholes, Cousens said: “An additional £200m to fix potholes is welcome, but we are concerned that the cash won’t become available until next year.
“Years of underinvestment in our road network coupled with a cold and wet winter is already unveiling the craters.
“More money needs to be spent now, as well as significant long-term investment to improve our local roads.”
Seb Goldin, chief executive of Red Corporate Driver Training, also welcomed the Chancellor’s decision to freeze fuel duty and retain the 5 pence per litre cut introduced last year.
However, he said: “Fuel remains at a high level, diesel is at an average of £1.67 per litre and unleaded at £1.47. A year ago, diesel was around £1.50 a litre and petrol £1.44.
“This highlights the importance of ekeing out every mile from a tank of fuel, which means ensuring drivers are trained to drive in a smooth, sympathetic manner which also has the benefit of making them safer.”
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