Question to the Department for Transport:

To ask the Secretary of State for Transport, what proportion of the identified in the Government’s October 2023 cost-benefit analysis of the Zero Emission Vehicle Mandate represents costs to the public purse; and if she will publish a breakdown of those Government costs.

The Zero Emission Vehicle (ZEV) Mandate is the largest single carbon saving measure across Government and fundamental to the UK’s commitment to reach net zero by 2050. The cost-benefit analysis for the ZEV Mandate and CO2 regulations estimated the net value to society of the regulations. This was estimated at a benefit of £39 billion (2022 prices) over the full appraisal period, between 2021 and 2071.

There are three main sources of Government costs:

1. Taxation impacts, which are a transfer from vehicle owners to government, were also assessed (Vehicle Excise Duty, fuel duty and VAT), but these reflected policy at the time. At the time, fuel duty and VAT losses from reduced fuel consumption were estimated at £20 billion (2022 prices) over the period from 2024–2035. This does not reflect subsequent taxation decisions since publication.
2. The administrative costs of the regulation were estimated at £24 million (2022 prices). Wider indirect effects on public expenditure such as any costs from changes in traffic volumes and the weight of vehicles, and savings to the NHS from improved air quality were not quantified.
3. Some of the costs attributed to business (notably vehicle/infrastructure, and electricity network reinforcement capital costs) could fall to government, particularly where purchases or installations are subsidised, and through public-sector procurement (e.g., the Government fleet). The proportion of costs falling to government were not separately quantified and, for Government vehicles, should be considered alongside the operating cost savings from switching to electric vehicles. The proportion of expenditure that purchase grants cover implies that the vast majority of these costs will be borne by the private sector.