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Feebate scheme is the way forward for electric vehicles, says transport charity

26 June 2012
A new kind of financial incentive scheme is needed to encourage more people to switch to low carbon vehicles, according to Campaign for Better Transport, which today launched a report into the possibility of a feebate scheme in the UK.

A feebate scheme works by giving buyers of low emission cars a significant rebate – potentially several thousand pounds - while buyers of high emission gas-guzzlers pay an extra fee.

With the UK Government committed to reducing greenhouse gas emissions 80 per cent on 1990 levels by 2050, electric and hybrid vehicles are one of the main planks of the Government’s carbon reduction strategy. However, despite several financial incentives designed to encourage the uptake of low carbon cars, including graduated Vehicle Excise Duty (VED), Plug-In Car Grants and graduated company car taxation rules, there has been little take up so far, with just over a thousand bought through existing incentives.

With the Government currently reviewing VED, Campaign for Better Transport believes the time is right to look at how it could be used to promote greener vehicles and a feebate scheme should be one of the options considered.

Stephen Joseph, Campaign for Better Transport’s chief executive, said: “The UK has the opportunity to become a leader in electric and hybrid vehicles, which could help the Government meet its aim to rebalance and green the economy. Our report suggests that now is the perfect time to consider a more radical approach and a feebate system could work. The Treasury could learn from the operation of a similar scheme in France and develop one that is cost-neutral and encourages the take-up of low emission vehicles.”

The report is being launched at an event hosted by Zac Goldsmith MP at Westminster on Tuesday 26 June. Speakers include Malcolm Fergusson, who wrote the report, Dr Julian Huppert MP and Dr Alan Whitehead MP.

Zac Goldsmith MP said: "Introduced fairly and properly, a feebate scheme would make it cheaper for people to buy cleaner cars that in turn would cost less to run. It could rapidly shift the whole market so that we pollute less and are less dependent on imported fuel. Feebates cannot be described as a stealth tax, and nor are they retrospective. Their introduction should not therefore prove controversial.”

ENDS

Notes to Editors

1. For a copy of the full report contact the Campaign for Better Transport press office.

2. As of 31 March 2012, 1,276 claims have been made through the Plug-in Car Grant scheme.