Written statement to Parliament

Investing in ultra low emission vehicles in the UK 2015 to 2020

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Explaining that the Deputy Prime Minister has announced measures to support the use and development of ultra low emission vehicles.

I am pleased to inform the House that my right honourable friend, the Deputy Prime Minister, has announced today (29 April 2014) the key elements of a comprehensive package of measures to support ultra low emission vehicles (ULEVs) between 2015 and 2020. This follows the announcement by the Chancellor of the Exchequer in the ‘2013 spending round’ that the government will make £500 million available to support ULEVs in this period.

The outline package of measures confirms the UK government’s strong commitment to making the UK a premier location for the design, manufacture and adoption of ULEVs. It aims to provide a long term, stable and comprehensive policy framework backed by a significant funding commitment. The package gives certainty on grant support for consumer incentives, provides funding for vital infrastructure, recognises the importance of other vehicle sectors including buses, taxis and HGVs and provides guaranteed funding for ULEV-specific R&D. It also encourages innovative measures from cities to turn their areas into exemplars for ULEV take-up.

Key elements include:

  • at least £200 million for the continuation of the plug-in car grant, with the grant cap remaining at £5,000 per car until a review in 2017, or the first 50,000 vehicles, whichever is the sooner
  • £100 million for ULEV-specific R&D
  • £35 million for a new city scheme competition, to support flagship cities in introducing innovative local measures
  • £20 million for ULEV taxis
  • £30 million for low emission buses
  • £32 million for infrastructure including rapid chargers
  • £31 million for other ULEV types including vans
  • £4 million for HGV gas refuelling infrastructure

I can confirm that the government is also seeking to adopt a flexible approach. Not all the £500 million funding is allocated here, and minimum allocations are given which could be extended to reflect market conditions. Many elements of the package, including the consumer incentives, are also subject to securing the necessary state aid approvals from Europe.

More information on the package can be found on GOV.UK and further detail will be made available by autumn 2014.