New prime minister Andy Burnham’s move in July – on his first day in office, no less – to remove VAT from household electricity bills from October could have significant ramifications for our public EV charging infrastructure, it has been warned.
Burnham said of the decision: “We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope.”
His new chancellor, former defence secretary John Healey, added: “Today’s energy tax cut will give families some breathing room on bills, and provide some reassurance this winter.
“This measure is funded this year from cancelling the Digital ID programme, and it will help bring down inflation while supporting households in every postcode.”
Responding to the measure, David Martell, chief executive of Andersen EV, calculated that, for the average EV driver charging at home, the saving on charging alone was likely to be around £20-£25 per year at standard domestic electricity rates. For higher-mileage drivers, it could be closer to £35-40.
“That may not sound transformational on its own, but it’s the direction of travel that matters. It demonstrates a willingness to support the transition with practical measures that make a real difference to consumers,” he said.
Others, however, warned it could have a less positive knock-on in terms of widening the gap still further between the cost of charging at home versus at public charge-points, including on-street and in-column charge-points.
It could also accelerate interest in, and take-up of, cross-pavement residential charging solutions, something where the industry has in the past expressed concerns around electrical safety.
Speaking to the trade publication Auto Express, Vicky Edmonds, chief executive of EV owner advocacy group EVA England, said: “Millions of EV drivers without a driveway will not fully benefit because they can’t easily access home charging.”
Similarly, CEO of EV charging firm char.gy, John Lewis, argued that Burnham’s new policy simply “throws the unfairness of the current VAT system into even sharper focus”.
Lewis said: “Drivers who rely on public charging, often because they don’t have a driveway, will still pay 20% VAT for exactly the same electricity. If [the] government is serious about making the EV transition work for everyone, the next step has to be equalising VAT on public charging. The electricity is the same. The tax treatment should be too.”
Edmonds, further, highlighted the government’s upcoming Cost of Public EV Charging Review, arguing that this “must now deliver real structural reform to bring down prices at the chargepoint”.
While it remains to be seen whether, or how, Burnham’s arrival in Number 10 (and Healey’s in Number 11) will change things, as things stand, this autumn’s Budget should see publication of the results of this review.
The review, which was launched in June, is being led by the Office for Zero Emission Vehicles, and is expected to report back to the Department for Transport, the Department for Energy Security and Net Zero and the Treasury by the time of the Budget.
It is examining a range of issues, including the costs of charging electric cars and vans on the UK public charge point network, how these costs have changed in recent years, and how they might change in the future without intervention.
It will also consider options that government and industry can take for lowering these costs for consumers.
Look out in the September edition of Lighting Journal for a special focus on EV charging, including a round-up of the latest guidance for, and news on, the market.
Image: Pexels
