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Businesses could benefit from government vehicle scrappage scheme but drivers face uncertainty as consultation starts

PUBLISHED: 15:03 05 May 2017 | UPDATED: 15:04 05 May 2017

The government's consultation on air pollution means drivers and businesses face an uncertain time. Picture: Yui Mok/PA Wire

The government's consultation on air pollution means drivers and businesses face an uncertain time. Picture: Yui Mok/PA Wire

A scheme which could see drivers subsidised for trading in their old diesel vehicles would be welcomed by motor dealers – but campaigners have warned measures do not go far enough.

The Department for Environment, Food and Rural Affairs (Defra) has opened a consultation on a number of plans to tackle air pollution which include a suggestion of a scrappage payment which could take 9,000 diesel and 6,000 petrol vehicles off the road.

The proposals were revealed as part of the government’s air quality measures revealed today after a High Court battle.

Ian Turner, managing director of Suffolk-based Turner Motor Group, which owns Hyundai dealerships in Ipswich and Bury St Edmunds, said he thought the introduction of a diesel scrappage scheme would be well-received as long as it was allowed to run indefinitely.

He said: “The last scrappage scheme introduced by Peter Mandelson under the last Labour government worked well for everyone. It involved owners of all cars over ten years old qualifying for a £2,000 subsidy if they scrapped it and bought a new one. The additional VAT that was raised in effect paid for the scheme.

“The only problem was that it was only for a limited time, so some people weren’t able to take advantage of it because it wasn’t the right time for them. Anything that doesn’t have a time limit on it gives people more time to save up to get their old car off the road.”

Mr Turner added there was rising demand for hybrid and plug-in vehicles, which use alternative fuels, but further incentives could improve the uptake on them.

One form the scrappage could take would see 15,000 of the most polluting vehicles replaced by electric ones at a cost of £60m.

The government has said it would consider a more targeted plan which is likely to focus on the most polluted towns and cities.

Mark Henry, head of law firm Birketts’ motor group, said the government was under pressure off the back of the report and there could be a rise in vehicle excise duty for diesel vehicles in the Autumn Budget.

He said: “There will be a number of business caught simply because there isn’t an overnight solution. Businesses who have a fleet of diesel vehicles are likely to suffer for the duration of their lease and finance agreements before they are in a position to migrate to an alternative. Additionally, it will take time for the car industry to shift the emphasis in production.”

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