Environmental sales boost?

Time 9:27 am, August 5, 2008

53527peu.jpgINTRODUCE a scrappage scheme, to get old cars off the road and encourage people into brand-new eco-friendly models.

That’s the call from the influential Environmental Audit Committee, which has just reported to the Government on the controversial new road tax rules.

The Committee is generally in favour of the new tax rules – indeed, it says the Government should go even further with the eye-opening first-year road tax scheme, due to be introduced next year. £950 for the highest emitters still isn’t enough of a disincentive, it reckons.

It says a more ambitious reform of road tax is needed to encourage people into lower-polluting cars. For this reason, the committee has no problem with altering road tax rates for older cars, either. It’s fine with the retrospective element, which will see drivers of large-engined 2001 Vauxhall Zafiras paying £400-plus a year for road tax.

‘This could influence buyers of second-hand cars to choose models with lower emissions, ‘said the Committee. ‘This is especially important given that three-quarters of all car sales are second-hand.’

But it’s the Committee’s call for a scrappage scheme that gets the biggest headline. This would incentivise drivers of higher-CO2 cars to send them to the crusher, in return for a Government-funded rebate off a new car.

Such schemes have run in Europe in the past: France, for example, offered money off green new cars, encouraging floods of people to rush to dealers.

Over here, the scheme could potentially see the lowest CO2 cars – possibly those emitting 120g/km or less – have £1000 knocked off their price for those scrapping older models.

A response from the Government to the VED rules is expected in the autumn.

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