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UK Motor Industry Urges Government to Cut VAT on Electric Vehicles to Revive Sales

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The Society of Motor Manufacturers and Traders (SMMT) is appealing to the UK government to reduce Value Added Tax (VAT) on new electric vehicles (EVs) and public charging infrastructure. This request comes amid concerns over a slowdown in the electric vehicle market, as manufacturers grapple with stringent government sales targets for zero-emission vehicles.

In an open letter to Chancellor Jeremy Hunt, the SMMT is advocating for a VAT reduction on electric cars and charging points for a three-year period. The urgency of the request is underscored by the government’s requirement that 22% of all new car sales and 10% of van sales must be electric in 2023. Although there was a record of 56,362 battery electric vehicle (BEV) registrations in September, BEVs currently account for only 17.8% of the market, with expectations to reach 18.5% by year-end—still falling short of government targets.

The SMMT highlighted that private demand for electric vehicles has declined by 6.3% year-to-date, even as manufacturers implement significant discounts to stimulate sales. These price reductions are projected to cost the industry over £2 billion by the end of 2023. Despite the ongoing decline in petrol and diesel vehicle sales, these traditional vehicles still represented 56.4% of buyer choices in September.

To boost EV adoption, the SMMT proposes a 50% VAT cut on new electric vehicle purchases, which could potentially cost the Treasury £7.7 billion by the end of 2026. Additionally, they recommend lowering VAT on public charging points to 5%, aligning it with the rate for home charging. The industry body also urges the government to establish mandatory infrastructure targets for charging stations to support the increasing number of electric vehicles on UK roads.

Moreover, the SMMT is advocating for a delay in the implementation of road tax for EVs, currently scheduled to begin next year, and for an extension of subsidies for commercial electric vans beyond the planned end date in March.

This push for VAT reductions and continued subsidies occurs as the global EV market faces significant hurdles. Major manufacturers like Volvo, Ford, and Toyota have scaled back their EV goals, with Toyota recently announcing delays in US EV production and Tesla falling short of its quarterly delivery targets. Additionally, several European governments have reduced support for the sector, with France cutting EV subsidies for high-income buyers and Germany terminating its subsidy program entirely.

While the UK has largely ended grants for electric vehicle purchases, business buyers can still take advantage of tax incentives for EVs used as company cars. However, industry leaders warn that without further government intervention, the market may struggle to meet ambitious targets for zero-emission vehicles.

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Biden Administration Ends Temporary Humanitarian Program for Certain Migrants

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The Biden administration has announced that it will not extend legal permissions for specific migrants from Nicaragua, Cuba, Venezuela, and Haiti under a temporary humanitarian program aimed at reducing illegal border crossings. According to the Department of Homeland Security (DHS), these migrants will now need to pursue alternative legal avenues to remain in the United States.

This decision follows nearly two years after the program was introduced to assist Venezuelans seeking to enter the U.S. It allowed these migrants to temporarily live and work in the country, aiming to alleviate surges at the southern border. Under the program, participants were required to have a sponsor in the U.S., undergo background checks, and complete necessary vaccinations.

The initiative was later expanded to include migrants from Nicaragua, Cuba, and Haiti, with the administration presenting it as a means for migrants to enter the U.S. in an orderly fashion. However, the program has sparked significant political controversy, particularly among Republicans who argue that the administration has misused its parole authority. They have frequently cited this program as a point of criticism against President Joe Biden’s immigration policies.

As of the end of August, nearly 530,000 migrants from these four countries had arrived in the U.S. under the program, according to federal data. While the program remains open to new applicants, it was temporarily suspended earlier this summer due to concerns about fraudulent applications.

DHS officials have emphasized that the program was intended to be temporary, designed to give migrants a chance to apply for other legal statuses while in the U.S. Although the administration did allow re-parole for Ukrainians and Afghans under similar programs, it did not guarantee an extension for the program concerning migrants from Nicaragua, Cuba, Venezuela, and Haiti.

With parole for certain Venezuelans set to expire soon, the issue of immigration is poised to become a central topic in the upcoming election, particularly between former President Donald Trump and Vice President Kamala Harris.

A Homeland Security spokesperson stated, “As initially noted in the Federal Register notices, a grant of parole under these processes was for a temporary period of up to two years.” This timeline was meant to facilitate individuals in seeking humanitarian relief or other immigration benefits while allowing them to work and contribute to the U.S.

As protections gradually lapse, those who haven’t secured other legal permissions will be directed to apply for alternative statuses, leave the country, or potentially face deportation, leaving many in a precarious legal situation.

While Venezuelans and Haitians are eligible for Temporary Protected Status (TPS) — a form of humanitarian relief — Nicaraguans lack similar options. Asylum remains available for all nationalities, but not all applicants qualify. The recent decision has drawn criticism from House Homeland Security Committee Republicans, who contended that various pathways still exist for these migrants to remain in the U.S.

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Olive Oil Production Set to Surge, Promising Lower Prices for UK Consumers

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The long-awaited end of prolonged drought conditions is expected to significantly increase olive oil production, with estimates suggesting a remarkable 77% boost this season, resulting in around 1 million metric tonnes of olive oil. This surge offers relief to UK shoppers who have faced soaring prices for the staple cooking oil over the past two years.

Gary Lewis, a representative of KTC Edibles, a leading UK oil supplier, anticipates a substantial decrease in olive oil prices, projecting a drop of 40-50%. “Prices could return to late 2022 levels, falling from €10,000 (£8,365) per tonne to €4,000-€5,000 per tonne,” Lewis stated, indicating a hopeful outlook for consumers.

Shoppers in the UK can expect to see the effects of this increased production reflected in their grocery bills soon, with the full impact likely to be felt by the first quarter of 2024. However, the market remains cautious until the olives are harvested and processed, ensuring that the projected figures come to fruition.

This summer, the price of olive oil in British supermarkets reached alarming heights, with a 500ml bottle averaging £7.89 in August and September, as reported by market analyst Assosia. Recently, there has been a slight reduction, with average prices now at £7.52, as brands such as Napolina and Filippo Berio begin to lower their prices in response to the anticipated increase in supply.

Kyle Holland, an analyst at Expana, noted that other significant olive oil-producing countries, including Greece, Turkey, and Tunisia, are also expected to see improved harvests this season. Greece, for instance, is projected to produce 230,000 metric tonnes of olive oil, a significant increase from 130,000 last year. Meanwhile, Turkey and Tunisia are forecasting substantial production gains as well.

As the olive harvest progresses from late October to February, experts agree that the anticipated increase in supply will likely continue to drive prices down, providing much-needed respite for consumers. This decrease comes after years of high costs exacerbated by extreme heatwaves and droughts that have plagued olive-growing regions.

With these promising developments, UK consumers can look forward to more affordable olive oil prices in the near future, offering a welcome relief to those who have felt the strain of rising costs.

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New Duty to Prevent Sexual Harassment Imminent for UK Employers

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From October 26, 2024, UK employers will be subject to a new legal duty to take reasonable steps to prevent sexual harassment in the workplace. This obligation is established under the Worker Protection (Amendment of Equality Act 2010) Act 2023 and aims to enhance workplace safety and culture.

The new duty focuses specifically on sexual harassment, separate from other forms of discrimination outlined in the Equality Act 2010. It adds to existing protections against discrimination, harassment, and victimisation, reinforcing the legal framework for employee safety.

On September 26, 2024, the Equality and Human Rights Commission (EHRC) released updated Technical Guidance for employers, alongside an eight-step guide aimed at preventing sexual harassment at work. Employers are encouraged to familiarize themselves with these resources as they prepare for the new requirements.

Understanding Sexual Harassment

According to the Equality Act 2010, sexual harassment is defined as unwanted conduct of a sexual nature that violates a person’s dignity or creates an intimidating, hostile, degrading, humiliating, or offensive environment. Examples include unwelcome physical contact, sexual jokes, advances, and the sharing of sexually explicit content.

The Preventative Duty Explained

The new preventative duty is described as “a positive and proactive duty designed to transform workplace cultures.” Employers are required to anticipate situations where sexual harassment may occur and take preemptive action. Notably, this duty extends to harassment by third parties, such as clients or customers, which was not covered under previous regulations.

While individuals cannot make standalone claims solely for a breach of this duty, a violation can influence compensation amounts awarded by Employment Tribunals in cases of sexual harassment.

Determining Reasonable Steps

The EHRC’s guidance clarifies that there is no set minimum for what constitutes “reasonable steps,” as it varies by employer based on factors such as:

Size, resources, and sector of the employer
Risks associated with the workplace
Contact with third parties
The potential impact of specific actions
Employers must conduct regular risk assessments to identify factors that may heighten the risk of sexual harassment, such as a male-dominated workforce, a culture that tolerates crude banter, and lack of clear policies against harassment.

Consequences for Non-compliance

Failure to meet the new preventative duty may lead to significant repercussions. If a worker successfully claims sexual harassment, the Tribunal will assess whether the employer breached this duty, potentially increasing compensation by up to 25%. Given that compensation for sexual harassment claims is unlimited, this uplift could result in substantial financial liability for employers.

Preparation Steps for Employers

To effectively prepare for the implementation of this new duty, employers should:

Conduct a Risk Assessment: Identify and mitigate risks of sexual harassment in the workplace.

Educate Employees: Provide information on what constitutes sexual harassment, referencing the Equality Act 2010.

Foster an Inclusive Culture: Establish a zero-tolerance policy towards sexual harassment to promote respect and inclusivity.

Implement Clear Anti-harassment Policies: Encourage reporting of harassment incidents and outline an effective complaints procedure.

Provide Training: Tailor training for employees and managers, ensuring it addresses risks of third-party harassment and is regularly updated.

Monitor for Signs of Harassment: Stay vigilant for indicators such as absenteeism or changes in employee behavior.

With the deadline approaching, taking proactive measures will not only ensure compliance but also contribute to a safer and more inclusive workplace environment.

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