Source · Select Committees · Public Accounts Committee
Recommendation 5
5
There are other issues to be addressed in the transition to zero-emission cars, such as...
Recommendation
There are other issues to be addressed in the transition to zero-emission cars, such as the need to train and retrain the workforce required to service the new car fleet, the impact on the demand for power, and the tax implications from phasing out new petrol and diesel cars. There are numerous uncertainties that the responsible Departments must overcome as petrol and diesel cars are phased out. The skilled workforce for maintaining zero-emission cars will need to grow as many people move away from petrol and diesel engines. The Department for Business, Energy & Industrial Strategy estimates that electricity demand will double by 2050 as a result of many different elements, of which one contributor is electric vehicles. Investments will also be needed in the transmission and distribution networks to ensure they are upgraded to cope with demand from electric vehicles and other demand sources. The Department estimates this will translate to a 2% increase in energy bills by 2030. There are significant issues that government will need to consider as part of the transition, for example the lost taxes from petrol and diesel sales, the impact on insurance regulations about charging vehicles indoors, and how other types of vehicles will be decarbonised. Recommendation: The Departments for Transport and for Business, Energy & Industrial Strategy need to work with other departments to consider the practical implications of the transition to zero-emission cars. They should set out in their plan how they are going to manage the wider societal impacts of phasing out new diesel and petrol cars, for example, retraining the UK workforce, the impact on power generation and transmission, and implications for the UK tax take. 8 Low emission cars 1 Plans for zero-emission cars and progress
Government Response
Acknowledged
HM Government
Acknowledged
5.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2023 5.2 The government is taking action to address the practical implications of the transition to electric cars. The DfT’s 2035 Delivery Plan sets out at a high-level industry-led action being taken on skills and plans for managing the impacts on the electricity system but will not cover taxation. 5.3 Skills: The DfT is working with the Institute of the Motor Industry to ensure the UK’s workforce of mechanics are well trained and have the skills they need to repair EVs safely. The automotive sector is also participating in the government’s Emerging Skills Project and the Green Jobs Taskforce, which is developing a long-term plan that sets out the skills needed to help deliver a net zero carbon economy. 5.4 Preparing the electricity grid: The Energy White Paper (December 2020), sets out government’s plan to ensure electricity networks are prepared and able to integrate EVs at the same time as other technologies such as heat pumps and new low carbon generation. Distribution network operators are incentivised to ensure the adequacy of local electricity networks through the regulatory framework set by Ofgem. The network operators are currently developing business plans to present to Ofgem for funding under the next Revenue = Incentives + Innovation + Outputs (RIIO) price control period, which begins in spring 2023. 5.5 Tax implications: The government will need to ensure that the tax system encourages the uptake of EVs. Revenue from motoring taxes needs to keep pace with this change, to ensure government can continue to fund the first-class public services and infrastructure that people and families across the UK expect.