HM Treasury confirms to TfL that vital Plug-in Taxi Grant is ‘being kept under review’

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HM Treasury responds to Transport for London (TfL) notifying them that the Plug-in Taxi Grant (PiTG) is ‘being kept under review’ as the deadline fast approaches.

The development comes as the deadline for the grant's current iteration rapidly approaches, with the scheme set to expire at the end in April 2024.

The PiTG, a cornerstone in the Government's strategy to promote environmentally friendly transport, has been instrumental in aiding the shift from traditional combustion engine taxis to zero-emission capable (ZEC) vehicles. Initially launched to bridge the cost disparity between standard and ultra-low emission taxis, the grant's extension is now a subject of intense debate.

London's Mayor, Sadiq Khan, disclosed that HM Treasury's response was in reply to a communication from the Commissioner of Transport for London (TfL).

Khan said: “HM Treasury recently responded to a letter from Transport for London’s (TfL’s) Commissioner stating that the Plug-in Taxi Grant (PiTG) is being kept under review to ensure the best value for taxpayer’s money. 

“My Deputy Mayors for Transport and Environment and Energy have jointly written to the Department for Transport (DfT) to ask them to extend the PiTG beyond the end of March 2024 to support the taxi trade and its move to zero emission capable vehicles.

“TfL continues to engage with HM Treasury, DfT and the Office for Zero Emission Vehicles (OZEV), who administer the grant, with the aim of ensuring taxi drivers and fleet owners can continue to receive the financial support they need to purchase a zero-emission capable taxi vehicle, in line with TfL’s current vehicle licensing requirements.”

As the situation stands, if the PiTG is not prolonged past April 2024, taxi drivers in London could face an additional financial burden estimated at £7,500 for electric taxis. This potential expense looms large over the industry, already grappling with the economic impacts of recent years.

The PiTG scheme, which has been a pivotal part of the Government's environmental initiative, was extended previously in 2022 to last until at least the financial year 2023/24. Its primary objective was to incentivise the acquisition of purpose-built ZEC taxis, a key step in the UK's broader strategy to combat climate change and reduce urban pollution.

As the deadline inches closer, the fate of the PiTG hangs in the balance, with potential significant implications for London's iconic taxi industry and the city's environmental goals.