Plans to reform the van VED regime could hurt small businesses and should be postponed until there is a greater supply of affordable low emission LCVs on the market, according to concerns raised by the British Vehicle Rental & Leasing Association and Federation of Small Businesses.
Responding to a consultation on reforming van VED, the BVRLA welcomed the Government’s aim of increasing low-emission vehicle take-up, but highlighted the lack of options currently on the market.
It also pointed out that those vehicles which are available are usually far more expensive than their Euro VI diesel equivalents. As vans are almost entirely an essential business tool, it would penalise van users for carrying out their necessary everyday work. This would hit small businesses the hardest, as many operate on tight margins and cannot easily absorb such additional costs.
The BVRLA has suggested incentivising manufacturers to produce a more affordable range of greener vans across all vehicle weight ranges instead. Practical measures the Government could implement include:
· Increasing the value of plug-in van grants to deliver price parity with diesel vans.
· Providing more R&D grants to encourage manufacturers to develop new technologies and bring these products to market.
Commenting on the consultation, BVRLA Chief Executive Gerry Keaney said: “The Government’s approach will have the unintended consequence of penalising hard-working businesses. By heavily focusing on leveraging taxation, it is missing a trick to incentivise the much-needed production of a greater number of affordable, low-emission vans.
“Van users currently don’t have much choice across all weight ranges. By allowing older, more polluting vans to continue to be taxed at a lower rate than newer, more efficient diesel vans, the Government is sending the wrong signal and is failing to reward those making cleaner choices.”
Martin McTague, Policy Chairman, Federation of Small Businesses, added: “Around two thirds of FSB’s small business members rely on vans for transport and deliveries. Small businesses are keen to play their part in improving air quality, but they continue to face barriers to adopting new, cleaner forms of transport, including the high cost of replacement vehicles and lack of charging infrastructure.
“Until these barriers are addressed, small businesses cannot avoid the additional costs associated with policies designed to incentivise road users to adopt greener forms of transport. Government must help the transition to produce green vans by providing incentives to manufacturers and offering more R&D tax credits to those creating this innovative technology. Without this investment, switching to greener transportation will remain out of reach for many small firms.”