In its annual 'Autumn Budget' statement the UK chancellor (finance minister) Philip Hammond has pledged more funds for electric vehicle charging infrastructure to 'supports the transition to zero emission vehicles'.  He also used the annual public spending statement opportunity to increase some taxes applying to diesel cars.

Hammond said the UK government will invest GBP200 million, to be matched by private investment into a new GBP400 million 'Charging Investment Infrastructure Fund'. It will also commit to electrify 25% of cars in central government department fleets by 2022. The government will also provide GBP100 million to guarantee continuation of the Plug-In Car Grant to 2020 to help consumers with the cost of purchasing a new battery electric vehicle.

There was some bad news for potential diesel car drivers with an increase to the annual VED or road tax. From April 2018, the first year VED tax rate for diesel cars that fail to meet the latest standards, will go up by one band. This will not apply to next-generation clean diesels – those which are certified as meeting emissions limits in real driving conditions, known as Real Driving Emissions Step 2 (RDE2) standards. There will also be a rise in the existing Company Car Tax diesel supplement from 3% to 4%, with effect from 6 April 2018. Again, this will also apply only to diesel cars which do not meet the Real Driving Emissions Step 2 (RDE2) standards.

The increases to diesel tax are designed to pay for a new GBP220 million 'Clean Air Fund' which will help local authorities tackle air quality problems.

The Autumn Budget also said that the government wants to see fully self-driving cars, without a human operator, on UK roads by 2021. The government said it 'will therefore make world-leading changes to the regulatory framework, such as setting out how driverless cars can be tested without a human safety operator'. The National Infrastructure Commission (NIC) will launch a new innovation prize to determine how future roadbuilding should adapt to support self-driving cars.

The government said it wants to 'establish the UK as a world leader in new technologies such as artificial intelligence (AI), immersive technology, driverless cars, life sciences and FinTech'.

Economic growth forecasts revised down

For those interested in prospects for the UK new car market, the chancellor did not have good news on economic growth prospects. GDP growth in 2017 has now been revised down to just 1.5% (previous official projection was 2%). The government's independent forecaster - the OBR - also forecasts slower growth to continue into 2018 and 2019 with GDP growth of 1.4% and 1.3% respectively, before rising to 1.6% at the end of the forecast period (2020-21). Lower forecast GDP growth also reflects the latest population projections, with annual net migration lower by around 20,000; this reduces the level of GDP by around 0.2% by 2022.

UK grew by 1.5% in the year to the third quarter of 2017. UK employment remains near the record high set earlier this year and unemployment is at its lowest rate since 1975.

Some GBP3 billion has been set aside in the public finances over the next two years to prepare ('ensure smooth transition') the UK for every possible outcome as it leaves the EU in March 2019.

SMMT response

The UK auto industry's trade association, the SMMT, welcomed some of the measures in today's Budget, but also voiced some disappointment and added a note of concern on diesel taxation.

SMMT CEO Mike Hawes welcomed the EV charging funding announced. "The Autumn Budget contains some positive measures and we are pleased to see a renewed commitment to new and future vehicle technology," he said. "The investment in charge points and new incentives to encourage the take up of electric cars is a positive step to boost buyer confidence, which will be essential to increasing market share. However it's disappointing that there is no additional funding for the incentivisation of plug-in hybrids."

However, Hawes expressed concern at 'mixed messages' on diesel.

"Our greatest concern is the continuing mixed messages around diesel which will only deter and confuse the public further," he said. "Diesel buyers will not face any additional taxation for the next six months, but thereafter, will face additional charges which will undermine fleet renewal efforts, which are the best and quickest way to address air quality concerns. Manufacturers are investing heavily in the latest low emission technology, however, it's unrealistic to think that we can fast-track the introduction of the next generation of clean diesel technology which takes years to develop, in just four months. This budget will also do nothing to remove the oldest, most polluting vehicles from our roads in the coming years."

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