GREEN CONSERVATIVES WARN INVESTMENT-CRUSHING BUDGET THREATENS CLIMATE ACTION

Responding to the budget, CEN’s Director Sam Hall said: 

“Rachel Reeves’s investment-crushing budget deepens Britain’s decline and exacerbates our biggest environmental challenges. Modest changes to green levies funding are welcome, but will barely touch the sides. Her failure to tackle the root causes of mounting electricity prices will not only prolong the cost of living crisis and cripple economic growth. They will also sink decarbonisation efforts, as clean electric-powered technologies are made less appealing and more expensive. Her overzealous EV tax will add insult to injury, slowing sales, boosting inflation, and undermining the British car industry. 

“The Chancellor chose more state intervention and a sticking plaster for high bills. She should have reined in Ed Miliband’s costly statism, embodied in the 2030 clean power target, GB Energy, and his drive for clean energy unionisation, taken bolder action to reduce unnecessary taxes and levies on electricity bills, and backed proposals to streamline nuclear red tape instead.”

In response to the mileage-based charge on electric and plug-in hybrid cars, the prematurely published OBR report highlighted several concerning statistics demonstrating the impact the tax will have on the EV industry and whether the government will be able to hit its 2030 EV target. They estimate the tax will:

• Result in around 440,000 fewer EVs being sold (pg.75)

• Cost EV drivers £1.4 billion (pg.56)

• Increase inflation by over 0.1% (pg.64)

• Undermine extended funding for the Drive35 programme announced in the budget, which allocated an additional £1.5 billion, taking total funding to £4 billion over the next ten years. 

Responding to the impact on EV sales, CEN’s Clean Air Programme Officer Lizzy Zisman said:

“Rachel Reeves is slamming the brakes on the UK's EV transition by hitting them with new taxes and higher electricity prices. 

“Although the introduction of an EV road tax was inevitable, the industry needs more time to develop. The Chancellor’s premature and overzealous tax will drastically damage EV sales, boost inflation, punish British manufacturers, reduce home-grown innovation, and undermine decarbonisation efforts. Combined with rising electricity costs due to Ed Miliband’s clean power 2030 mission, it will increase the lifetime costs of owning an EV and dissuade drivers from making the switch.

“Increasing EV subsidies at the same time as introducing new EV taxes has created an incoherent and unnecessary maze of statist intervention. In addition, the decision to have a uniform tax rate is especially unfair on rural communities, who cause less congestion and are more reliant on their cars than urban drivers.”