MP calls for study into car subsidy plan

Jul 17 2010 by Adrian Pearson, The Journal

COALITION ministers considering whether to dump a £5,000 incentive for electric cars have failed to assess the regional impact of such a move, it has emerged.

The previous Labour Government had promised motorists would get a subsidy of up to £5,000 if they bought an electric car from next year. Nissan will build its electric Leaf car in Sunderland. It will cost £28,350, including the battery, but the price tag was set on the assumption that a £5,000 incentive would be available.

Fears have been raised the local car industry will fall behind European countries such as Holland, Portugal and France, which will provide such an initiative.

But despite those fears, the Liberal Democrat Conservative coalition has not conducted an assessment of the regional impact of scrapping the UK incentive scheme. The admission was made in response to a written Parliamentary question from Labour MP Sharon Hodgson.

She asked whether the consumer incentive for electric vehicles would be implemented and the scheme’s likely impact on the region’s manufacturing industry.

Business Minister Mark Prisk said the final decision rested with Transport Secretary Philip Hammond – although it is known that his department could face budget cuts of up to 40% as the Government aims to slash the country’s debts.

Mr Prisk also said: “He is considering this issue and, as has been previously stated, a statement will be made as soon as possible.

“No assessment has been made of the impact of the incentive on manufacturing on a regional basis.”

Mrs Hodgson, who represents Washington and Sunderland West, said: “If the Conservatives took the time to listen to business in the North East they would know that this incentive could bring major benefits to the region.

“Electric vehicles are an emerging technology and people need a bit of help to take that leap of faith and make the switch from their old petrol cars.” The MP added: “I think Labour recognised that, which is why the incentive scheme was introduced. There are thousands of jobs across my constituency which depend on the market for electric vehicles continuing to grow – that’s good for the North East, good for business and good for Britain.

“And it is why I’ll keep pressing the Government to support it.”

Nissan has previously said it was confident that the coalition Government would continue to support manufacturing as a vital sector for the UK.