Roads, EVs, and driverless vehicles to benefit from UK government’s 2017 Budget


The UK’s Chancellor of the Exchequer, Philip Hammond, delivered his first Budget yesterday (March 8), which promises new investment for the country’s road network and ‘disruptive technologies’ such as driverless vehicles, as well as incentives to encourage the use of electric vehicles (EVs).

The Budget committed the government to spending £90m (US$109m) in the North, and £23m (US$28m) in the Midlands, from a £220m (US$267) fund that addresses traffic congestion ‘pinch-points’ on the national road network. The government has also launched a £690m (US$839m) competition for local authorities across England to tackle urban congestion and get local transport networks moving again. The Transport Secretary will announce details of the scheme shortly. The Budget included an announcement on an investment of £270m (US$328m) to keep the UK at the forefront of the ‘disruptive technologies’ industry, which includes driverless vehicles, as well as biotech and robotic systems. No further details of the new funding are currently available.

The government announced that fuel duty is to be frozen again in 2017, making it the seventh consecutive year that there has been no increase. However, the government has served notice that the ‘tax treatment for diesel vehicles’ could change as it seeks to cut pollution from the transport sector and improve air quality. The government said it was committed to improving air quality and would consult on a detailed draft plan shortly that would set out how the UK’s air quality goals would be achieved. As a result, fleets can expect diesel vehicle tax changes, and potentially increases, as the government reinforces its air quality strategy and its mission to convert fleets and consumers to plug-in and ultra-low emission vehicles. The Budget also confirmed the Autumn Statement 2016 announcement that the government would reshape company car taxation from April 2020 to provide a stronger incentive for fleets to operate ultra-low emission vehicles (ULEVs) and employees to choose them as company cars.

Following the Budget announcements, the UK Transport Research Laboratory’s (TRL) academy director, Nick Reed, commented, “The Government’s continued commitment to the development of connected and automated vehicles (CAVs), as well as the 5G networks that will prove vital in supporting them, is very welcome. Users of CAVs stand to benefit in several ways, including improved safety, accessibility, emissions performance, and asset use. There will also be substantial commercial benefits, such as the emergence of truck platooning. However, these must be weighed against potential disadvantages, including user confusion, changes in opportunities for employment, and threats to equitable transport provision.”

John Leech, head of automotive at global financial services partnership KPMG UK, said, “The Chancellor’s announcement of £270m for robots, driverless cars and biotech is a welcome boost for automotive companies and will benefit consumers. This investment will enable the UK to be an early adopter of shared-use driverless cars and Britain’s consumers will enjoy the largest cost savings in the world from this technology. The measures will support the development of internationally competitive businesses in the rapidly evolving mobility ecosystem.”

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Tom has edited Traffic Technology International (TTi) magazine and its Traffic Technology Today website since May 2014. During his time at the title, he has interviewed some of the top transportation chiefs at public agencies around the world as well as CEOs of leading multinationals and ground-breaking start-ups. Tom's earlier career saw him working on some the UK's leading consumer magazine titles. He has a law degree from the London School of Economics (LSE).