Motor industry stunned by government reversal on low carbon car grants

07 June 2006 #SMMT News

SMMT has reacted with shock at the news that the Department for Transport will not be implementing its own low carbon car grants scheme, or similar programmes for buses and commercial vehicles.

The news, revealed in a written statement by transport minister, Dr Stephen Ladyman MP, to the House of Commons flies in the face of government’s own stated aim to drive the market for cleaner cars.

Since the collapse of the Powershift scheme 15 months ago, no grants have been available to help buyers invest in the cleanest low carbon cars. However, the industry had expected the Low Carbon Car Fund to be introduced as soon as the European Commission gave it the green light on state aid rules. That happened four weeks ago.

Christopher Macgowan said, ‘We are stunned by this decision. It sends completely the wrong message to consumers and the industry at a time when government claims to be taking a lead on lowering carbon dioxide emissions.’

In a recent SMMT-commissioned survey of 1,200 motorists, 36 per cent said that a government grant would be the most important factor in encouraging them into a greener car.

The results clearly show that grants, as well as better consumer information and tax incentives, are fundamental to changing driver behaviour.

Note: The written statement by Dr Ladyman can be downloaded here.


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