The Autumn budget was a missed opportunity to boost the electric car market and fully exploit the new technology, professional organisations have claimed.
Chancellor Philip Hammond’s speech – which, in the Year of Engineering, did not use the word once – should have offered more incentives to buy “environmentally friendly” vehicles, said Society of Motor Manufacturers and Traders chief executive Mike Hawes.
“There are some welcome announcements in the budget including further funding for the industrial strategy, in particular the Stephenson Challenge and investment into infrastructure. Amid continuing Brexit uncertainty, however, the automotive industry was looking for a stimulus to boost a flagging new car market. We wanted to see more incentives for consumers to purchase the latest, most environmentally friendly vehicles.”
He added: “The forthcoming review into the impact of the Worldwide harmonised Light vehicles Test Procedure (WLTP) on vehicle excise duty and company car tax must, therefore, ensure that motorists buying the latest, cleanest cars are not unfairly penalised. Industry looks forward to working closely with government on this review to ensure we encourage the newest, cleanest vehicles on to our roads rather than incentivising consumers and businesses to keep older vehicles going longer.”
The Institution of Civil Engineers (ICE) also welcomed some aspects of the budget, including a £25.3bn, five-year package for the second road investment strategy. However, said head of policy Chris Richards, “as we move towards a largely electric vehicle fleet, the government must think about other forms of revenue to pay for major road development and maintenance. A pay-as-you-go road charging scheme should be considered, as ICE recommended in its recent report State of the Nation, for the busiest roads to ensure the long-term security of revenue for continued maintenance and upgrades.”
A recent PricewaterhouseCoopers report also warned that electric car uptake is outstripping the rate of charging infrastructure installation.
Jobs and training
Elsewhere in the budget, the Chancellor announced a £695m initiative to help small firms hire apprentices.
“The fourth industrial revolution will blur the boundary between academic knowledge and technical skills,” said IMechE head of education policy Peter Finegold. “The engineering and technology sectors support the government’s continuing policies to raise the status of technical training and qualification.
“On this basis, the Institution of Mechanical Engineers welcomes the Chancellor’s commitment to make up to £450m available so that apprenticeship levy-paying employers can transfer up to 25% of their levy fund to companies in their supply chain. We also endorse the provision of government funding to halve contributions smaller companies pay towards apprenticeship training from 10% to 5%.
“Engineering has a long tradition of high-quality apprenticeships. We hope these two measures announced in the budget will contribute to continued progress to produce a generation of highly trained and adaptable technical experts.”
Cutting the small business co-investment level for apprenticeships from 10% to 5% “could be beneficial to many small and medium-sized businesses who are concerned about the impact of Brexit on their access to skills in the future, and could create an important opportunity to introduce and grow their own talent,” said Richard Godmon, tax partner at accountancy firm Menzies.
The Chancellor’s budget also included a smattering of rail announcements. The Northern Powerhouse Rail project received a £37m boost to improve east-west connectivity, £20m was allocated to develop plans for an Oxford-Cambridge rail link, and the London Docklands Light Railway will benefit from £291m to support the development of 19,000 new homes.
In total, £1.6bn from the budget will support the diverse modern industrial strategy, funding digital infrastructure, innovation ‘Catapults’, skills, technology such as artificial intelligence, and start-up companies.