That this House takes note of the Report from the Environment and Climate Change Committee EV strategy: rapid recharge needed (1st Report, Session 2023-24, HL Paper 51).
My Lords, it gives me great pleasure as the past chair of the Lords Select Committee on Environment and Climate Change to open this debate on electric vehicles. While recognising that the transition to EVs is only one part of the necessary broader transport transition that this country has to make, it is an incredibly important part. Passenger cars account for over half of our surface transport emissions and contribute to the almost 30,000 deaths from air pollution annually in the UK.
It is really important and, as the independent Climate Change Committee said, it is one of the most important actions if we are going to get to net zero. Given that electric vehicles account for only 3% of cars on British roads at the moment, it is an urgent priority. We know it is not going to be easy. ICEs—internal combustion engines—have dominated our roads and popular culture for over 100 years. Even though I am an EV driver and I know that they are clean, quiet and great to drive, it will be a big challenge to bring the British public away from petrol and diesel and into electric vehicles. It will require planning, co-ordination and an awful lot of leadership from the Government.
It was right for our committee to look into the record of the last Government in terms of their approach and success in getting people out of petrol and diesel cars and into electric vehicles. We identified that there had been some progress—certainly there has been an increase in charge point infrastructure, and legislation to ban new petrol and diesel cars from 2035. These were important steps, but overall our committee concluded that an urgent recharge was needed in the Government’s strategy for EVs.
That was, of course, when we reported in February, so it was under the previous Government. It has to be said that, since the new Labour Government have come in, they have hardly put their foot to the floor in terms of delivering on the EV agenda, despite the fact that there were some incredibly welcome proposals both in Labour’s automotive sector plan last year and in the general election manifesto. So it is timely to have this debate today, because the recommendations we made in February are still relevant and, with the upcoming Budget, now is the time to make those strides to bring people with us on the EV transition that is so necessary.
The first thing we identified as a committee is that we are not going to bring the British public with us unless they know where they will be able to charge their electric vehicles. As I said, we identified some progress—when the Minister came before our committee last November, there were 57,000 public charging points; that has now gone up to 70,000. So progress is being made. Indeed, when EVA England did a survey of electric vehicle drivers earlier this month, it identified that two-thirds of EV drivers think that in the last year there has been a big increase—a big improvement—in the public charging point infrastructure. But, as more cars come onto the road, we will need more charge points.
My Lords, I warmly welcome the report, which deals statistically with a large number of important elements, not least the rapid recharge, which has just been mentioned. Knowing our industry as I do, there should already be a minimum of 50 kilowatts, with a minimum of 100 kilowatts on trunk roads.
Electric charging is expensive. VAT needs to drop from the present 20% to 5% to give people a chance, and it should cost the same to charge on the streets as it does in your driveway. If we are to sell more electric vehicles, the road tax needs to be reduced, and the issue of charge points, which has just been mentioned, needs to be addressed too.
However, I am going to concentrate on manufacturing EVs and the financial penalties which put an unsustainable pressure on manufacturers. For a successful transition, we need to review the present inflexible approach, developed by the civil servants who produced the zero emission vehicles mandate. This was designed when we had a growing economy, interest rates were low—as was the cost of finance—and sales were picking up, which was hoped would lead to lower costs for manufacturing batteries and other things.
However, that is not the case now. The market has collapsed, apart from fleet sales, so we need incentives, both to build and to buy. The ZEV mandate requires manufacturers to sell a percentage of new EVs each year from 2024. It starts this year at 22% and progresses, hitting 80% in 2030. The mandate therefore means that if 22% of your total UK sales are not electric vehicles, for every non-EV vehicle sold up to the target number you will be fined—£15,000 per car. It is ridiculous.
Presently, the industry is falling short of its quotas: by about 4%, which equals—wait for it—£1.4 billion in fines. Companies are already subsidising each electric vehicle by about £6,000 to get sales, which means extra costs of £2 billion on top of the £1.4 billion in fines. It is simply unsustainable for our industry.
My Lords, it was a great privilege to serve on the committee under the noble Baroness, Lady Parminter. Like her, I am no longer in it. Her departure is greatly missed; I suspect that mine, since I was the grit in the oyster on that committee, was much welcomed by its other members. It is also a privilege to follow the noble Lord, Lord Woodley. He made some important points, which I hope I will be able to suggest—probably to other people’s surprise—are not quite as much of a worry as he suggested.
One of the problems with most Select Committee reports is that they tend to be all words and no numbers. Committees show an extreme reluctance to discuss the costs of their proposals to the taxpayer or the consumer. I was originally trained as a scientist; drilled into us was Lord Kelvin’s remark:
“When you can measure what you are speaking about, and express it in numbers, you know something about it. When you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind”.
It may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the stage of science. That is even more true in economics. If you cannot even estimate the costs or benefits of a policy, you can scarcely claim to have advanced to the stage where you can make policy recommendations.
Happily, this report is not devoid of numbers, albeit that most of the important ones are well hidden and the obvious conclusions that might be drawn from them have not always been drawn. I will focus on some of the key numbers in this report, but none of them appear in the initial recommendations. The upfront conclusions on page 4 use all sorts of euphemisms and verbal circumlocutions to avoid mentioning that they will cost money.
Perhaps I might translate what the report actually says. The first recommendation is:
“Tackle the disparity in upfront costs between electric and petrol and diesel cars”.
My Lords, I congratulate the noble Baroness, Lady Parminter, on her commanding introduction, and I congratulate the committee on producing a truly comprehensive report of real ambition. My only criticism is that it is far too polite. The committee strictly identifies the gulf between aspiration and delivery thus far on our journey to net zero, and it offers no hope that, on current trends, we are even remotely on course to meet our long-term targets for decarbonising road transport. Decarbonising and expanding the production of electricity, decarbonising the heating of our homes and buildings, and decarbonising road transport must be our prime goals if we are to play our part in reducing the impact of climate change.
Today, only one in 30 of the vehicles on our roads is an EV, with annual sales of new EVs apparently flattening at around 16% of the total. I am an EV owner, and it is easy to see why take-up has been so slow—the committee’s report evidences this well. First, although the lifetime cost of owning an EV is economic, EVs are more expensive to buy up front than petrol and diesel vehicles. Will the new Government seek more ways to incentivise EV purchase and increasingly to disincentivise the purchase of vehicles powered by petrol and diesel?
The second factor inhibiting take-up is that, on the move over longer distances, the charging experience is infinitely less convenient than buying petrol. I am a member of the APPG on EVs, and we were told by a leading motorway service provider that one major motorway service station has no charge points at all. One station has installed charge points, but they are not in service because an adequate grid connection cannot be obtained for some years still to come. He told us that, in busy periods, he has to deploy stewards to avert fights breaking out on charge point queues. Only 63% of motorway service stations have over six charge points, and only around 40% have six or more rapid chargers. In the whole of the UK, there are fewer than 4,000 ultra-rapid charge points. Will this Government ensure that motorway service stations up their game and that grid connections to charge points used by long-distance drivers will be prioritised?
My Lords, I congratulate the noble Baroness on her introduction and her committee’s work. She is the most amazing Member of our House, and I think we have to appreciate her effort in actually making life greener.
The Green Party wants to switch to electric vehicles to make a real transformation in how people travel and move around. We want the cars, alongside the electric buses and vans, to be a real game-changer. We want all new cars to be zero emission by 2027, with the aim of being able to remove all petrol and diesel cars from our roads by 2035, but that means making them affordable and having a charging point wherever people need them: so, if you are teacher, you need one at school; if you live in terraced housing, you need one on the street close to you; and, if you make long trips, you need chargers at every roadside stop-off.
We have to keep this real. The fact is that electric vehicles will not help with climate change emissions unless all those charging points are run from renewable energy. If they are not, we will just be transporting the pollution somewhere else—somewhere possibly more rural, where it is even worse. We have to do this properly. Of course, we also have to make batteries that can last for years and years; there should be no throwaway culture when it comes to batteries. Electric vehicles will not completely cut roadside pollution. They will not, for example, cut the particulates coming off tyres and brakes, which is quite a big factor in air pollution. Electric vehicles will not stop congestion or cut the number of people killed or injured on our roads—the statistics are horrifying at the moment. There are also environmental trade-offs. Building any car takes raw materials, sometimes toxic materials, and adds to the planetary burden that we humans create.
For those obsessed with the cost of doing this, they should always ask: what is the cost of not doing it? The fact is that climate change is coming at us like an express train. When we look at what is happening in America—indeed, all over the world—we see that the weather patterns are very different. The hurricanes in America were exacerbated by climate change. We could experience something similar here, so we have to move fast. Therefore, however much this costs, we have to ask exactly how much it will cost if we do not do it.
My Lords, I too warmly welcome this debate as a member of the committee that produced the report. I pay tribute to the noble Baroness, Lady Parminter, for her introduction to the debate and her very careful, wise and gracious—and patient—leadership of the committee in its first three years.
My experience of serving on the ECC Committee across the three years was that each of the challenges we addressed proved to be both more significant and more complex than we first appreciated. It was a tremendous learning curve. Each issue had multiple questions and problems associated with it and needed complex solutions. That was clearly the case with the EV report before the House today.
Some very good work has been done by the previous Government, manufacturers and local authorities, but much more needs to be done—and urgently—to keep this transition on track. I would highlight that need for urgency in the transition. As the noble Baroness, Lady Jones, has just said, the effects of climate change across the world are accelerating, as all of us in this Chamber recognise, often affecting those who have least, who are least resilient and whose emissions in the present and in the past have been lowest across the world.
Surface transport is the UK’s highest emitting sector, with passenger cars responsible for over half the sector’s emissions. The new Government surely need to do all they can to accelerate the transition, alongside the vital transition to renewable energy, so what do they intend to do? The Labour manifesto for the general election mentions three key steps: accelerating the rollout of charge points; restoring the phase-out date of 2030 for new cars with internal combustion engines; and supporting buyers of second-hand electric cars by standardising information—the second-hand car market is key and complex. These are welcome steps and I ask the Minister, as others have done, to say when we will see action on each of those points. However, as I am sure the Minister will recognise, and as the report makes clear, the steps are not enough by themselves, so I ask for a response and for action on two further areas.
My Lords, I declare an interest as chair of the Labour Climate and Environment Forum. I too am very honoured to have served on this inquiry. I am always amazed by the skill of the noble Baroness, Lady Parminter, in chairing what was a motley crew and her skill this afternoon in being able to name in exquisite detail all the schools we worked with, with no notes whatever. Doesn’t it just make you spit?
Sales of new battery electric vehicles are up—I do not think we should be excessively gloomy. They went up considerably in 2023, but of course that was happening mainly in fleets, and private new car demand for electric vehicles declined substantially during that same year.
I want to deal with four of the issues that have been raised already by noble Lords but perhaps focus on aspects that have not yet been covered. The whole charging infrastructure is the first. There are now 70,000 public charging points and 850,000 domestic and workplace points, and that is still substantial growth. Some 80% of current electric vehicle owners have their own off-street parking, so we must make sure that we do not end up with a situation of haves and have-nots. Equalising tax on charging is really important.
The mixed signals that we got from the previous Government about whether it was going to be a 2030 or 2035 phase-out date did not help the charge point operators—it undermined their prospects of investment. We need to make sure that the clarity around the date of the phase-out—which was in the manifesto, as the right reverend Prelate the Bishop of Oxford mentioned—is honoured and sustained, so that everybody is very clear about the trajectory to which we are working.
There are considerable incentives in place at the moment for charge point installation—such as the rapid charging fund and LEVI, which is a local authority scheme—but they have not accelerated charge point rollout to quite the rate that we wanted. For example, the LEVI rules keep changing, making it very difficult for folk to deal with. There are a number of laggard local authorities that have done nothing since the scheme was opened, and that needs to be subject to government action. Local authorities are key in making charge points available for people who have not got access to driveway parking, and collaboration between charge point operators and local authorities is fundamental. The LEVI scheme and some of the initiatives put in place by the last Government to make it successful need to be continued and looked at, to make sure that they have not been lost sight of in the transition.
My Lords, I am very grateful to the noble Baroness, Lady Parminter, for her superb chairing of the committee; it was a real pleasure to be part of it.
I share my noble friend Lord Lilley’s aversion to subsidy. It seems to me that subsidies that are too large and too long stop real solutions emerging, and that we really need to work against them. It was a huge pleasure being on the committee with him. I learned what dissent effectively delivered with great style was, and I learned how one can chair in such circumstances, so it was a great educational experience.
I do not think my noble friend should despair too much about not being on the committee any more: we have my noble friend Lord Frost there. I see that the current inquiry is into methane. When I was a Whip in MAFF, the BSE crisis hit and the first reaction of the scientists was, “We must kill every cow in the country”. I hope, with the fate of the cows being in my noble friend’s hands, that he will mount as good a defence as the noble Viscount, Lord Hailsham, did under those circumstances.
There are some things the Government can do to move things along. First, on regulations, as mentioned by the noble Baroness, Lady Young, and others, we are faced with a set of regulations, particularly when it comes to flats, on-street charging and similar areas, where we are deliberately slowing things down. We are making it harder to make progress. This is a Government who have said, in Defra, in housing and elsewhere, that they will do something about ineffective and unnecessary regulations. I know how hard that is but I am optimistic; I very much hope that the Government will go down that way.
Another area where regulations have been getting in the way is on the evolution of small, cheap electric vehicles. If I want something that will carry myself and a couple of kids, or maybe the shopping around town, I can go to China and buy it for £1,500. The cheapest alternative here is £15,000. Some of that difference is quality but an awful lot of it is regulation. The question of whether the value that we are getting from that regulation justifies the cost of implementing it really needs examining. We really ought not to be getting in the way of the development of new forms of local mobility in the way that we are.
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The Government set themselves an advisory target of 300,000 public charge points by 2030. When the Society of Motor Manufacturers and Traders came before the committee, it said that we needed over 2 million charge points by 2030—so we really have to motor on with getting more charge points installed. That is why we as a committee said that the Government needed to mandate local authorities where there are black holes—and there are black holes around our country—to prepare EV strategies to ensure that we are getting the EV infrastructure where we need it.
We also called on the Government to extend the LEVI fund—the local electric vehicle infrastructure fund—which is funding capacity building within councils and providing direct subsidies for charge points. Both those things were, we felt, critical. I hope that in summing up the Minister will say what his current thinking is, particularly on extending the LEVI fund. That is a particularly important part of where we need to be.
As I said, there were some incredibly welcome comments about the transition to EVs and the need to accelerate the rollout of charge points in Labour’s manifesto. Indeed, it picked up some of the recommendations in our committee report, including removing some of the planning barriers that are stopping charge points being introduced. I ask the Minister, when will we see the consultation on the permitted development rights for charge points? I think this is an issue that the noble Lord, Lord Lucas, may wish to come back to in a moment. Also, are the Government minded to agree that renters need to be given a right to charge? It is quite clear that some landlords are blocking renters installing charge point infrastructure.
Finally in that area, the other thing that we were very clear on is the totemic issue of charge points in motorway service stations. We know that people will not buy an electric vehicle if they do not feel confident that there will be charge points at motorway service stations when they take the family away to see relatives at Christmas. The previous Government set and failed to meet their target for six high-powered charge points at all motorway service stations. This Government need to be very clear in saying when they will be able to meet that really iconic issue of charge points in motorway service stations.
Of course, it is not just where you are going to charge your EV that is an issue for the public. One of the other issues that we found was a real barrier for people was the upfront costs of electric vehicles. EVs are still not affordable enough for all people who need to have a car. They are more expensive than their petrol and diesel counterparts and there are not yet enough affordable models on the market. We looked at examples across other European countries that are starting to move away from early adopters into mass saturation markets. All of them have retained fiscal incentives, normally grants, to encourage people with the upfront costs of EVs. Sadly, the last Government got rid of those grants back in 2022 and we as a committee felt that that may be one of the reasons why EVs are still only 17% of new car sales in this country. We need to do better.
It is not just the upfront costs of cars that we found to be an issue; it is also the ongoing running costs. The biggest concern that I had—I say that, knowing I speak merely as a representative of the broader committee—is that, as someone with off-street parking, I can charge my EV and it costs me 5% in VAT. Anyone who does not have home charging has to pay 20%. The committee identified that up to 40% of the population does not have access to off-street parking and, therefore, the ability to get that cheaper rate of VAT for charging. That is not equitable and I would hope that a new Government—a new Labour Government—would see both the issue of equality as well as the impact on the ongoing running costs for cars.
Committee members will know that we conducted an inquiry a couple of years back on mobilising behaviour change for net zero and the environment. One of the things we found was that people really wanted to get towards net zero, but they wanted the decisions and the policy actions to get there to be fair. Having VAT at a differential rate if you do not have the advantage of owning your own home and your own parking space is not fair. Our committee made it very clear, following the almost unanimous evidence that we had from people, that the VAT rate should be equalised and that fiscal policy should follow net-zero policy. So I hope that the Government will look at that issue in the upcoming Budget. The Minister may also wish to comment on the need for fiscal incentives when buying EVs.
But it is not just charging and upfront costs. The third big barrier the committee identified was the need to give people clear information. This is a really big societal change, yet the information for people about EVs—the benefits to them and to society—just is not there. If you looked in the papers, you would not know that nine out of 10 EV owners would not go back to petrol or diesel, or that the lifetime costs of an EV are currently cheaper than for petrol and diesel. What the committee found was a blatant amount of misinformation. Very interestingly, we looked at a number of the broadsheets and other media outlets and found an awful lot of focus on the fire risks of electric vehicles, so we went away and looked into the evidence. They are no more of a fire risk than petrol and diesel cars—so we concluded that there was a blatant campaign of misinformation.
When we launched our campaign in February, a number of the newspapers, including the Daily Telegraph, again showed their fossil fuel-soaked colours. Anthony Browne, the then Minister, came before the committee. We asked him whether there was a concerted campaign of misinformation, and he agreed with us. He said that there was—it was just that the Government were not going to do anything about it. In fact, not only did they not do anything about it, when they pushed the date of the ban on new ICE cars back from 2030 to 2035, the message the public got was that going to EVs was not a priority and that we can afford to wait, whereas they should have been clear with people that this is an urgent priority. Indeed, the then Prime Minister Rishi Sunak went further: when he made that announcement, he said that going to net zero was going to be hard.
We cannot get to net zero without EVs, and we need our Government to face down people who do not believe in net zero. We may not have a Conservative Government, but we certainly have Reform UK down the other end who see this as a rallying cry, and there are siren voices in this House and beyond who need to be called out. The Government need to take every opportunity they have—they have one coming up in the Budget in a couple of weeks—to make it clear to the public that they are on this journey and they are going to support people on it and make some critical interventions, including the equalisation of VAT and a clear statement on not watering down the ZEV mandate, so that people know where they stand and the direction of travel. As our committee said, that should be allied with a 10-year road map which gives car companies policy certainty, investors the confidence to invest and people the information they need.
I am going to stop fairly shortly, but our report covers many other issues, including the need for better recycling facilities for batteries, battery health checks and, critically, decarbonising the grid so that the electricity cars use helps us move towards net zero. I am relying on the many of members of the committee I see in the Chamber today to pick up one or two of those issues. I thank them for their support today and, indeed, throughout the committee. It was a great privilege to chair it. I also thank the staff for producing the report.
I also thank the six schools and colleges which supported us in our youth engagement programme and gave us their wisdom, thoughts and reflections on this issue, which is going to be as much about their future as it is for some of us. I put on record my thanks to Boroughmuir High School in Edinburgh, Loreto Sixth Form College in Greater Manchester, Barnsley College, Langley College in Slough, the London School of Excellence and St Louise’s Comprehensive College in Belfast. They were a great support to us all.
Finally, I hope the Minister, who will be listening to all the comments noble Lords make this afternoon, will be able to make it clear that this Government are committed to a fast track to EVs. We cannot get to net zero without it. Our report was very clear: an urgent recharge of the EV strategy is needed, and we need to make sure that we go in the fast lane to net zero in electric vehicles.
Ironically, fines of £15,000 per vehicle under the target can be offset by purchasing credits from those who have exceeded their targets, which can be only the Chinese or Tesla. Either way, the money will not be there for jobs or investment. The idea of UK manufacturers paying the Chinese or the Americans billions in credits is a nonsense and, I suggest, political suicide in automotive constituencies across the country.
The answer is two-fold. First, there needs to be a VAT reduction and equalisation of VAT on public and private charging, and the VED extra tax on expensive car purchases—unfortunately, electric vehicles are expensive at the moment—needs to be scrapped. Secondly, we need a ZEV mandate adjustment, including using 2024’s figures as a reset mechanism to assess the actual market for EVs, and to adjust the trajectory to 2030 accordingly.
We should include EV exports from the UK and commercial vehicle EV sales within the credits. The two Vauxhall plants in the UK, which make only vans, are caught up in this quotas turmoil. Let us be clear: these plants, which the last Government put money into, are at serious risk of being closed if the credits are not sorted out.
Another measure that would be the right way forward would be to allow pre-2024 EV sales in this year’s first quotas, and UK-manufactured vehicles should get additional credits, recognising that there are no “distribution emissions” or the environmental cost of shipping vehicles from as far away as China, the US and Korea. It makes sense. Indeed, the French have already done this. Why cannot we? The US also does this, and it better reflects actual emissions in the sale by including the emissions to get it there in the first place. The US states with ZEV legislation also give up to four credits for “local” built vehicles—again, why can we not do that?
We really need to pause while all this is sorted out, and flexibilities in the system to recognise the reality of the market for EVs right now. We also need time for any changes to bed in and feed into the marketplace. There is an awful lot to be done, but the good news is that our manufacturers, in the main, are prepared for 2030. But incentives to grow the market and help manufacturers and the infrastructure, which has been mentioned, must be put in place in a timely fashion, alongside the much-needed infrastructure improvements outlined in this tremendous report.
That means subsidising or, as the noble Lord, Lord Woodley, remarked, penalising the sale of petrol and diesel cars. The second recommendation is:
“Turbo-charge the charging infrastructure rollout”.
That means subsidise it. The third is:
“Ensure charging is reasonably priced, convenient, and reliable”.
That means subsidising fuel costs further. The report goes on to say that
“the Government must explore options for equalising the discrepancy between the VAT rates for domestic and public charging”.
Now there is no conceivable likelihood that the Government will put up VAT on domestic electricity, so that is a call for VAT on public charging points to be reduced, further increasing the subsidy on fuel costs for electric vehicles. I will return to the important fifth point later, but the sixth point is:
“Enhance UK manufacturing and battery innovation”.
That means more subsidies. The seventh is “Invest in UK recycling”—a new area for government subsidies. And so it goes on.
The problem is that the existing level of subsidies is very high, before we add to them from any of the proposals in this report. You have to get to page 33 or 34 to find out how much the subsidies are. They reveal that a privately owned EV is already subsidised, relative to petrol cars, to the tune of £5,000 over 10 years—it actually says £5,000 on page 34 and €5,000 on page 33, but I think the former is correct. However, corporately owned vehicles are subsidised to the tune of £10,000 in just four years. Those are big subsidies, particularly the latter. No wonder the vast majority of sales are to company fleets. If we are to subsidise EVs, it baffles me why the bulk of the money should go to those owned by companies—but so it is.
The main subsidy for private vehicles is, of course, the fact that they pay no duty on their fuel, which is electricity. You have to reach page 36 to find the total costs of this as EVs gradually replace fossil-fuel vehicles. The OBR has pointed out that fuel duties raised £23.4 billion last year, equivalent to £867 per household. That means that, if we forge ahead and succeed in phasing out those vehicles by 2030, we will have created what we might call a black hole in the nation’s finances, heading towards £23 billion as older vehicles are retired and used less.
The committee mentions the important issue of road tax in its fifth recommendation. It simply says that we should:
“Begin an urgent review of road taxation”.
It calls for an honest conversation with the public—quite right. Sadly, the committee did not agree to initiate this honest conversation by honestly admitting that the only option to replace this revenue is to introduce road charging. If we in this House, who do not have to get re-elected, do not have the courage to be honest enough to say that we are going to have to introduce road charging to replace fuel duty, how can we expect the people in the other House, who do have to get re-elected, to broach the subject until that black hole in the public finances is upon us?
The penultimate figure from the report is highly relevant to the decision on whether to phase out the sale of non-EVs sooner or later. There was much criticism of the previous Prime Minister’s decision to postpone the date beyond which sales of fossil fuel cars would be banned—delaying it from 2030 to 2035. There is rather less criticism now. The car companies seem rather relieved he did that, since sales are slower than was anticipated. We were told by the Society of Motor Manufacturers and Traders—which is of course largely a society of traders, and largely represents foreign companies exporting cars to this country—that this had a damaging effect on British manufacturers, who would not have the incentive to develop EVs. However, this ignores the strange nature of the British car market.
We export the overwhelming majority, more than 80%, of the cars we manufacture, and more than 80% of the cars we consume are imported. Indeed, on page 22 of the report you will discover that no less than 97% of the electric vehicles sold in the UK in the last quarter were imported. Most of the EVs produced in this country are presumably exported. So these changing rules only really have a major effect on EVs and other vehicles sold in the UK. Given that 80% of our vehicles are exported, the effect of these rules on our production falls on only one-fifth of the production, 20%. They are mainly affected by the rules of the countries to which they export, so I hope the damage that it does to British manufacturing will be less than the noble Lord, Lord Woodley, fears.
I am reasonably sure that electric vehicles will, eventually, displace petrol and diesel cars without subsidy, when their upfront price comes down to equal that of petrol and diesel cars, when the range of batteries is sufficient so that a normal journey would never require recharging, and when recharging is rapid. Actually, recharging is probably less of an issue than we imagine in this report. For the 60% of people who can keep cars off-road, the normal thing they will do after they use their car and come home is plug it in. The next morning it will be charged. They will not have to stop at the gas station as they would in a petrol car because they will have a fully charged car—so it is actually better. But for the 40% who do not have off-road parking, there is a problem we did not really find a solution to.
When will the price of electric vehicles come down to that of petrol and diesel? In the report, we quote people as saying that
“Other predictions for when average EV prices will meet those of petrol and diesel vehicles range from 2025–27”,
so, apparently, it will be quite imminent. So why are we subsidising people to buy expensive vehicles when they could have them at more or less the same price as the alternatives in a couple of years’ time? It is forecast that, by 2025, the price would be down to about £21,000 for an EV in Europe. Actually, you can get one for £22,000 now in the UK, so they are coming down to a similar price.
We should remember Dieter Helm, the great energy expert, who was asked by the Government to analyse their energy policy. He concluded that the big failure was that we had invested in immature technologies. He said that investing in technologies—which were going to become mature and cheap—when they were still immature and expensive had probably cost us the best part of £100 billion. So why are we encouraging people to do that in the EV market?
I suggest that we should look at this report and the figures, and draw conclusions from them. We might be a little more optimistic than some of the pessimists and a little more realistic than some of the super-optimists.
The third reason for the low take-up of EVs is that there is huge variation across the country in the availability of public charge points. The EV APPG was told that 80% of UK public charge points are in London and the south-east. I see from the committee’s report that there are over 100 times more charge points per head of population in Hammersmith and Fulham than in the Wirral, west of the Mersey. Not everyone can install a charge point in their garden at home—if you live in an apartment block or on a terraced street, for example. Will this Government devise and implement a plan for an appropriate rollout of public charge points right across the UK and located conveniently to where people live and park their cars?
The fourth reason why EV take-up is low is because the cost of charging is highly variable. It is economic at home, of course, cheaper than petrol, but high-speed charging is expensive. Will this Government ensure that the daily cost of running an EV is cheaper than a carbon-fuelled vehicle?
Finally, take-up is low because the quality of the user interface at charge points can be completely unfit for purpose, with under-illuminated screens in direct sunlight impossible to read, touch pay not always available, and onerous and complex user instructions. Touring the Inner Hebrides with my wife in the summer, I came across a particularly lurid example: a charge point with a blizzard—over 100 words—of user instructions; the requirement before using it to scan a QR code and to download an app; and a complex process of feeding back a reference number for the individual charge point before it could be used. It was a complete nightmare. I have a picture of that charge point on my smartphone, if any noble Lords present would like to see it. It is a gruesome sight. Will this Government galvanise the industry to ensure that the process of paying to charge your EV is as simple and convenient as buying petrol, and that all payments can be contactless, even below 8 kilowatts?
Briefly, I want to respond to what the noble Lord, Lord Lilley, has said. The noble Lord graces any committee because he is always challenging. I passionately believe that we have to achieve net zero, but I agree that we have to find the most economic route to it. There is far too little debate about that—but at the end of the day there may be a price for achieving net zero. We need to make it the minimum price, but we have to recognise that there is a price, and it is absolutely imperative that we reach our net-zero goals as quickly as possible.
Will this Government produce and publish a comprehensive and granular joined-up plan for delivering net zero, as we do not have one at the moment, including how to decarbonise transport? Will he explain how all the many departments right across government that need to combine to deliver an integrated plan will be involved in that process, and how they will be tasked to deliver? Does the Minister believe that by 2030, in six years’ time, the goal that all new cars should be EVs is achievable?
EVs are expensive, however. We need a well-funded scrappage scheme along with a transport system that gives people a genuine choice. The real solution is traffic reduction. More people on buses, bikes and local trains means fewer cars on the road, which means less pollution, less congestion and fewer casualties. Instead of owning a car, many would prefer a mix of car, bus and rail, with electric car clubs set up all over the country and offering car use on the cheap—or relatively cheap. The transition to electric vehicles is a real opportunity to think about how we travel and whether we need car rental, instead of car ownership. After all, people now download or stream, rather than own things. It is time, perhaps, to apply the same approach to driving. It could happen if the Government put enough money and focus on making car clubs convenient, cheap and reliable, but also, of course, on public transport. I very much hope that this Labour Government will take the issue of traffic reduction very seriously. It is the only way forward.
The first, echoing other noble Lords, is to ask what the Government will do to ensure that the transition to EVs as part of the transition to net zero is a fair transition. I commend that word “fair” to the Government: it does not feature in this part of the manifesto. In particular, how will the Government ensure parity of pricing and taxation between those able to charge their EVs at home and those who need to use a commercial charging service? As has been said, 40% of the country will not have access to a home charging point. There is, at present, no viable solution to ensure parity, and I agree that our committee was not able to offer one, but it will need some radical and imaginative thinking. How will the Government address this key question of fairness?
Secondly, how will the Government lead and encourage the transition to EVs through better communication and co-ordination across government? The committee conducted its inquiry through a period when the Government were rowing back from previous commitments and sending very mixed messages to the markets, to manufacturers and to consumers. We are still waiting for a sense of how the new Government will respond in terms of encouragement, incentivisation, accurate information and co-ordination of policy goals and delivery. What task force or structures will the Government put in place to ensure this for the future? The transition to EVs is a potential revolution in our road transport, our economy and public health over the next decade. How will the Government rapidly recharge this sector into the future?
The Government have been consulting on-street charging. It would be good to know from the Minister when the results of that consultation are likely to emerge and what is going to happen as a result of them. There is a view that there is a need for Section 50 licences to allow on-street charging to happen, but these are quite expensive and very slow. Why not grant permits to deliver on-street charging in the way that utilities have standing permits to operate the works necessary to keep them moving?
As the noble Lord, Lord Birt, indicated, the rapid charging fund is dragging. It is only a pilot scheme so far. When it is rolled out in full, it needs to include the provision that was in the pilot of having HGVs included. It would be good to hear from the Minister when the full scheme will be introduced.
There is a cross-pavement charging grant, but the guidance on how that will operate has not yet been published. As a result, the money that was set aside for it has literally not been utilised. Can the Minister say what plans the Government have to take forward the cross-pavement charging grant? To be frank, I think that it is not a good idea. I would be much more in favour of looking at how we can ensure that, within communities, there are sufficient accessible charging points, so that people can be assured that they will find one within a decent walking distance of their house, rather than having the prospect of intrusion into pavements by works sponsored by a grant to individuals.
The second point I want to cover is that of upfront costs. The vast majority of people who are buying electric vehicles at the moment are buying them through workplace or other leasing schemes, so I am not as downcast as some previous speakers have been. The second-hand market, which is a really important part of the vehicle market, is struggling. That is partly because of a lack of clarity about depreciation as a result of uncertainty around battery health. I would be grateful if the Minister could tell us what is happening with the support scheme for battery assurance certificates. It has been consulted upon; when will it come about? Could the Minister also tell us how the fairly substantial investment that the Government have put into battery development and initiatives such as solid-state batteries is going?
Commercial fleet operators are key, and the upfront costs of trucks are still very expensive—by a factor of three, compared with diesel. The current government grant schemes are pretty small, so perhaps we need a combination of increased grants and tax incentives, as well as tax disincentives. Disincentivising tax on diesel trucks will help create the market for electric vehicles in the commercial sector.
I turn to one of the bees in my bonnet that the committee discussed: marketing and communications. The reality is that the climate change challenge is one of the biggest that the world has ever faced, yet we do not have a government-co-ordinated marketing scheme for electric vehicles to persuade the public that some of their concerns and fears are being met and are not as huge as they think they are, using modern marketing techniques, social media and all those sorts of things. Under the previous Government, we frequently had Ministers in front of the committee who told us that that was an example of the nanny state and that the Government did not do that.
The reality is that there needs to be a concerted campaign against what is a big disinformation campaign. If you read local and national newspaper reports on electric vehicles, you would think that they are the Antichrist and liable to eat babies if left unattended. Range anxiety is said to cause stress, but range anxiety is rapidly becoming a non-entity. There are groundless fears about spontaneously combusting batteries, and of battery life and resale value. All those fears are not justified by the evidence but the tabloids, and other far more reputable newspapers, continue to peddle them like billy-o. The time has come for the Government to recognise that it is important to take forward a concerted campaign with modern marketing techniques and good information reliably provided to the public, and that this must not be left on some government website for the public to have to seek out. That is long overdue.
I will finish with the ZEV mandate. I do not agree with the noble Lord, Lord Woodley, who is not in his place, that the timescale should be adjusted, although I agree with him that some of the market incentives need to be geared up. We must not forget that it is important to bring in electric vehicles at a greater rate not only for climate change but for the manufacturers themselves. Increasingly, the world is looking for electric vehicles, rather than diesel and petrol. If we are to keep our place at all as an exporter of UK vehicles, we need to make sure that we can meet that requirement and do not see a diminution in the pace of moving our manufacturing capability towards electric vehicles.
I hope that the Minister will be able to give us strong assurances that the Government are not spooked by the manufacturers’ push-back at the mandate, and that there will be a strong campaign for the promotion of electric vehicles and a tweaking of the grants, taxes and other mechanisms, as noble Lords have spoken about today. We do not want to break stride. We need to find ways of addressing the hiccups and bumps in the road that mean that the manufacturers are feeling uncomfortable. We need to meet their legitimate concerns, but not by changing that date.
The mandate is one of the biggest tools in the toolbox. Electric vehicle sales are going up, especially in the lease market. We are seeing heavily discounted prices, which are good for the customer as well as for the climate. If you look at the exact calculations for the 2024 target, which with proper adjustments is about 18.5%, you will see that we are on target to meet it, and therefore should not be panicking now. So let us keep up the pace, drive down the carbon and the costs, drive more feedstock into the second-hand market, and make a real contribution to the huge challenge that is climate change.
No doubt the noble Lord, Lord Lilley, would have hysterics at any suggestion of taxation benefits or subsidy. But the reality is that we are rapidly seeing a closure of the upfront cost between electric and petrol vehicles, and that is as long as the subsidy needs to persist—we are not talking about it being in place for a very long time. We are talking about these sorts of subsidies being time limited by the point when electric vehicles can hold their own in that market.
I also thank the noble Lord, Lord Lilley, for his strenuous efforts on the committee to keep us honest. Many of his points were absolutely admirable, but I think the point at which I parted company from him was this: he does not believe that the costs of not doing this are higher than the costs of doing it, and that climate change down stream has huge costs that are now dreaded by the reinsurance and insurance market, the banking sector and every sensible business. Of course, if you do not believe that, a cost now is a bogeyman, and a cost in 20 or 30 years that you do not believe in is not worth thinking about. It was fun.
I very much support what the noble Lord, Lord Birt, said about information. We ought to publish an overall projection for energy and net zero. I would not call it a plan—it is too uncertain and far away for that—but it should be something that shows us how the Government believe we can get there, including what the steps will be, what the consequences will be and what the experience will be like. It should be open, moving, discursive and, above all, truthful. That would make a good base for good policy. The current darkness, for which the previous Government must accept some responsibility, is not a constructive background.
I would also like to see open information rigorously applied to the availability and state of charging points, so that anyone can find out the state of any charging point and where they might go in the hope of finding it, rather than it being balkanised into little sets of information for people who subscribe to particular networks. I would really like to see people being able to rent out their own home charging spaces to other people. Apart from not having an electric car and the ability to charge it, I cannot see why I should not be able to have someone else’s car on my drive and charge it there. The prices charged for on-street parking are ridiculous. I could make a very nice little turn, as I might do from selling my surplus strawberries, by selling a bit of electricity and thereby keeping everybody’s price down.
Lastly, I would like to see us pay serious attention to resilience—getting ourselves into a position where we can genuinely support a manufacturing industry. The key thing that I would like to see us do is put money into battery research. We cannot continue— it is totally impossible—to rely on the rare materials that find their way into current batteries. We have to do better; there are signs that we can do better. If we find ourselves at the forefront of a really effective sodium battery development, we will have a chance to create that industry or a share of it here, but while we rely on old materials and rare materials, we really must keep here the materials that get here. We must have an effective recycling industry so that what comes here stays here and we can use it to make new batteries.