Chancellor Philip Hammond confirmed today that the government will be bringing forward changes to exempt new electric-capable taxis from Vehicle Excise Duty. The change follows behind-the-scenes lobbying in advance of the Finance Bill after I raised concerns put to me by taxi drivers in our constituency.

The VED exemption was not due to come into force until April 2019, meaning that any cabbies who had purchased the new environmentally-friendly taxi would be taxed under the ‘luxury vehicle’ supplement, costing them an extra £310.

I brought this anomaly to the attention of Treasury Ministers in a private meeting several weeks ago and encouraged a review in the Finance Bill debates. Given the serious concerns about air quality in the capital, I suggested to the government that they bring forward by a year the VED exemption only for the new electric taxis to incentivise uptake of low-emissions vehicles, rather than for all taxis as proposed in an opposition amendment. This would then both help us support cabbies and contribute to the important task of making our city’s air cleaner.

Treasury Minister, Mel Stride, said ‘I am very grateful to Julia Lopez for having met with me and for putting the case for this change so firmly. Her input made a real difference in coming to a positive outcome for taxi drivers.’

Taxis Minister Nusrat Ghani said: “Our black cabs are famous across the world. Through the government’s ambitious Industrial Strategy, we are determined to help this long-established British industry continue to evolve so we are incentivising the transition to this new market in electric taxis. We have shown, yet again, that we can cut emissions and improve air quality by growing the low-carbon economy.”