The UK fleet and leasing sector has reacted to last week’s mini-budget, welcoming the new Growth Plan but calling for more details to help the drive to net zero.

Infrastructure projects including the Local EV Infrastructure Fund will be accelerated

The speech by Chancellor Kwasi Kwarteng revealed some big announcements including plans to deliver support to businesses with measures to tackle the high cost of energy and to reduce corporation tax, as well as work to help ease the fiscal burden on employees with planned reductions for both National Insurance and income tax rates.

It also included an announcement on new Investment Zones and the Chancellor revealed plans to accelerate new roads, rail and energy infrastructure. Growth plan documents reveal that the infrastructure projects which will be accelerated as fast as possible include the Local EV Infrastructure Fund and Rapid Charging Fund but details haven’t been announced. (See key Mini-Budget points for fleets here).

Jon Lawes, managing director of Novuna Vehicle Solutions

Commenting on the mini-budget, Jon Lawes, managing director, Novuna Vehicle Solutions, said: “The headline-grabbing support for businesses is a welcome boost for the industry. However, despite announcing an intent to accelerate charging infrastructure, no clear plans were laid out to provide new impetus towards the Government’s 2030 targets.

“The number of electric vehicles on the roads continues to markedly eclipse charge point installations, illustrating the necessity for swift action under the new administration.

“Additionally, the discrepancy in VAT on domestic versus public charging threatens to undermine momentum towards EVs. In light of current electricity costs, it was disappointing not to see a VAT reduction introduced within the announcements.”

Alphabet’s newly appointed consultancy and channels manager, Caroline Sandall-Mansergh

Alphabet’s newly appointed consultancy and channels manager, Caroline Sandall-Mansergh, also said there was much positive news in the mini-budget.

She continued: “New Investment Zones also have the potential to create significant opportunities for eligible businesses to leverage a series of additional tax incentives, including plant and machinery and enhanced structures and buildings relief. Businesses play a vital role in expanding the UK’s EV charging network, and whilst companies can currently benefit from the 100% first-year allowance for electric charge -points, we are interested to see how further relief will drive the ongoing development and installation of charging networks.”

Sandall-Mansergh added: “We of course welcome the acceleration of key infrastructure projects and hope adequate funding provisions are made available for decarbonisation within the Local EV Infrastructure Fund and Rapid Charging Fund to facilitate our continued progression towards Net Zero targets.”

But she said it was disappointing that there is still an absence of clarity on Benefit-in-Kind rates post 2045/25 and the inequality of VAT treatment between home and public charge points has yet to be addressed.

“We are at a crucial point in EV adoption and if we are to maintain momentum, it’s paramount favourable BiK rates for low- and zero-emission vehicles remain past the current cut-off. Now is not the time to slow down our efforts and we urge the Government to alleviate uncertainty and enable businesses and employees to plan their future mobility with confidence by setting rates out in the upcoming Autumn Budget.”

And Geotab said the fiscal event brought some good initiatives, but more needs to be done.

David Savage, vice president, UK and Ireland, Geotab

David Savage, vice president, UK and Ireland, Geotab, continued: “We’re encouraged to see the plans to accelerate a number of key infrastructure projects, including the Local EV Infrastructure Fund and the Rapid Charging Fund. Chancellor Kwasi Kwarteng’s mini-budget is an encouraging shift in the right direction, particularly with the looming 2030 stop sell date for internal combustion engine (ICE) vehicles.

“Earlier this year, Geotab’s Destination EV – Accelerating Local Authority report found an alarming lack of local investment and awareness regarding EV transition. Most notably it found that nearly half of English local authorities were unprepared for the switch to EVs amongst their own fleets.

“Local authorities specifically cited limited resources and concerns around charging infrastructure as key inhibitors for EV adoption. This transition needs investment to support local authorities across the country.”

But he added there remains a clear need to encourage and accelerate EV adoption. Geotab announced last week that over half of light-duty fleet vehicles in Europe could save nearly £218m simply by switching to electric today.

“However, the UK’s termination of the Plug-in Car Grant earlier this year has demonstrably stifled the economic viability of this transition. As such, we hope to see more focused investment and support from the Government to accelerate the shift to electric ahead of its 2050 net zero ambitions,” Savage finished.

David Bushnell, director of consultancy and strategy, Fleet Operations

Finally, David Bushnell, director of consultancy and strategy, Fleet Operations, commented: “While the energy price cap for domestic households will help encourage the adoption of electric vehicles, the Energy Bill Relief Scheme for businesses will hopefully lead to a reversal of the rapid increase in the cost of public charging – giving further confidence to the EV market. It would have been good if the VAT had been revised to the 5% charged on domestic energy.

“Fleets are at the forefront of the electrification of transport and many businesses are increasingly having to rely on public infrastructure as they strive to optimise charging strategies and service delivery.

“Over the coming months, we hope to see further action from government that will help accelerate fleet transport decarbonisation and the road to zero.”