Fund EV scrappage grants: note

Central fiscal result

+£4.0bn - Net fiscal impact in 2028-29

Low case: +£2.0bn. High case: +£8.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Models fund ev scrappage grants by 2028-29.
• Baseline is current policy or published departmental plans.
• Central case uses published party or official anchors where available.
• Wider manifesto interactions are excluded unless stated.

Affected population

• Affected units are people, firms, households or providers depending on policy.
• Direct exposure follows the manifesto or government target group.
• Indirect exposure includes suppliers, workers, consumers and taxpayers.
• Weakest counts are widened in the low and high cases.

Gross impact

• Published anchor or scenario central is +£4.0bn in 2028-29.
• Gross costs or receipts are adjusted for behaviour and delivery risk.
• Tax, benefit or procurement offsets are separated in the fiscal build-up.
• The range is deliberately wider where implementation detail is thin.

Fiscal build-up, central case

• Gross programme or delivery cost: +£4.6bn
• Tax and receipt offsets: -£0.3bn
• Administration and evaluation: +£0.1bn
• Behavioural and pass-through effects: -£0.4bn

Central net impact: +£4.0bn in 2028-29.

Behaviour and pass-through

• Low case assumes stronger delivery or receipts than central.
• Central case applies moderate behavioural leakage and pass-through.
• High case allows weaker delivery, larger take-up or higher costs.
• Output effects follow incidence, capacity and investment channels.
• Distributional gains do not automatically imply GDP gains.

Phasing

• 2026-27: +£0.4bn. Phased implementation and take-up.
• 2027-28: +£2.2bn. Phased implementation and take-up.
• 2028-29: +£4.0bn. Phased implementation and take-up.
• 2029-30: +£4.0bn. Phased implementation and take-up.

Main source groups

• Davis and Kilian, "Estimating the Effect of a Gasoline Tax on Carbon Emissions" (American Economic Journal: Economic Policy, 2011): Fuel taxes can reduce gasoline consumption and emissions, with distributional and behavioural effects; relevant to motoring and aviation tax measures.
• Institute for Fiscal Studies, "Green Party manifesto: a reaction" (2024): Used to define the pledge wording, policy scope and implementation scenario being modelled.
• Local Government Association, "Green Party manifesto summary" (2024): Used to define the pledge wording, policy scope and implementation scenario being modelled.
• Parry and Small, "Does Britain or the United States Have the Right Gasoline Tax?" (Journal of Urban Economics, 2005): Efficient motoring taxes should reflect congestion, accidents, pollution and revenue needs; relevant to EV mileage and fuel duties.
• Climate Change Committee, "Progress in reducing emissions" (2025): CCC reports persistent delivery gaps across buildings, transport, power and land-use decarbonisation; supports the need for investment while cautioning on deliverability.
• HM Treasury, "Spending Review 2025" (2025): Spending Review settlements set the counterfactual for departmental capital and resource budgets; used to separate new spending from existing baselines.
• Green Party of England and Wales, "Manifesto for a Fairer, Greener Country" (2024): The manifesto defines the tax, spending, climate, housing and public-service proposals modelled here; used to define the scenario, not as an official costing.