P&R: Budget will address future falls in fuel duty
CONCERN over how the island would cope with a drop in fuel duty when a ban on the sale of petrol and diesel-engined cars comes into force may be addressed in a future States Budget.
With both the UK and France announcing that they will ban the sale of fuel-engine vehicles in 2040, many deputies have questioned about how this fuel duty could be replaced.
The move, by extension, will affect Guernsey as well because manufacturers would be expected to phase in the production of increasing amounts of electric vehicles.
The Policy & Resources committee said an announcement could be made in an upcoming Budget report.
‘The Treasury team analyses and evaluates the impact of domestic developments and – where appropriate – international developments on an ongoing basis as part of the Budget planning cycle,’ the committee said.
‘As such, it would be premature to speculate on what may, or may not, be included in either the next Budget report or those in the future.’
Andrew Sparks of the Guernsey Motor Trades Association said a ban would be good and bad for Guernsey.
The island was ideal for electric vehicles because of the shorter journeys, he said. However, the move would come at a price.
‘The effect to Guernsey will be both positive and negative as Guernsey is an ideal location to utilise electric vehicles as our journeys are often considerably shorter than virtually any other jurisdiction, although by 2040 technology will have extended the battery life of these vehicles enormously, enabling them to make much longer journeys before recharging is required.
‘The benefits of the vastly reduced emissions which have already been achieved and those still to come will be considerably considerable to both the natural environment and for the people who live in Guernsey.
‘The negatives are that fuel volumes will continue to fall, but more significantly, as electric vehicles become more affordable, this will affect both local fuel wholesalers/retailers in terms of sales and profitability and the States in the form of company taxation and more importantly the fuel duty which currently equates to over £20m. per annum, which will fall proportionately.’
The island has also already begun to make moves to incorporate the infrastructure required for electric vehicles.
Guernsey Post has adopted a fleet of electric vans, Guernsey Electricity has a number of electric vehicles and the potential for electric buses has also been discussed.
‘The local motor traders and petrol retailers will undoubtedly make the transition as the manufacturers move production away from petrol and diesel to electric, but it will not be an overnight sensation – we are talking about a 22-year period of transition so there is ample of time for individuals, dealers and groups to amend their business models accordingly,’ Mr Sparks continued.
‘The States, and particularly Environment, will have to look at the infrastructure costs in the form of charging points and builders and architects will need to consider incorporating charging points in the new or development properties they design and build in the years to come.’
