Plug-in vehicles, plugged in policy - Transport Committee Contents

4  Conclusion

33. The Government must make significant efforts to decarbonise road transport in order to meet the carbon reduction plans set out in the Climate Change Act 2008. Government support for the low-carbon vehicle sector will be important to reduce carbon emissions from road transport. The intention is that plug-in cars should be a principal contributor to decarbonising road transport. But if so, they will need to be widely adopted by the public. Whilst the Minister said adoption was progressing according to forecasts, the market for these vehicles remains small (approximately 1%). Financial incentives to encourage vehicle purchases alongside initial infrastructure provision are necessary to kick-start this market and promote private sector expansion.

34. The DfT is committed to supporting the expansion of the plug-in vehicle market. A number of witnesses told us that this support was important to foster the manufacturing industry in the UK. Industry representatives told us that positive messages from Government had created an environment where vehicle manufacturers were encouraged to base production in the UK,[67] which led industry to invest in the UK and supported green growth. This commitment is outlined in the Coalition Agreement. However, changes to the financial incentives to support plug-in vehicle purchases in the March 2012 Budget have caused concern in industry about the consistency of Government support for this market. It appears that different departments are sending out different messages on this subject. The Government must avoid creating instability in the plug-in vehicle market through a lack of consistency between departments in their approaches to financial incentives for plug-in vehicles and adopt a more coordinated approach to these incentives across Whitehall.

35. The Government has spent £11 million on providing infrastructure and financial incentives that at present benefit only a handful of vehicle owners. It anticipates that there will be hundreds of thousands of beneficiaries from these schemes within the next few decades. If these figures are achieved, then this will be welcome progress in helping to reduce carbon emissions from road transport. However, the Government should not sit back and hope that these projections are achieved. It should set milestones in the medium and long-term so as to measure whether this policy is effective and providing value for money. We recommend that as part of the next spending review, the Government set milestones for the numbers of plug-in cars it expects to see on the roads so that the success of its low carbon vehicles strategy can be assessed within that spending review period.

36. We have heard potentially conflicting reasons for the DfT's underspend on low carbon vehicles. The Secretary of State told us that the underspend on low carbon vehicles was due to lower than expected take up, whilst the Minister told us that consumer demand was progressing as forecast and the private sector had provided more funding for infrastructure than expected. We have also found mixed information about the location and number of chargepoints. The DfT told us that over 1,600 had been installed by Plugged-In Places, yet their National Chargepoint Registry has fewer than 500 entries. It is difficult to see how the DfT can be targeting infrastructure and spending to the appropriate areas if it does not have a clear picture of current provision. There needs to be greater strategic oversight of the spending on low carbon vehicles and related infrastructure.

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Prepared 20 September 2012