A proposed GBP5,000 subsidy for UK buyers of EVs like Nissans Leaf may be withdrawn

A proposed GBP5,000 subsidy for UK buyers of EVs like Nissan's Leaf may be withdrawn

Implementation of the UK's proposed GBP5,000 subsidy for electric vehicle purchasers is under review by the new British government.

The widely-heralded subsidy is being scrutinised by Conservative/Liberal Democrat coalition politicians as part of a root-and-branch analysis of financial commitments made by the previous Labour administration.

“We are discussing the GBP5,000 investment at the moment – I am in the middle of a comprehensive spending review,” minister of state for business and enterprise Mark Prisk told just-auto today (12 July).

“The Automotive Assistance Package was introduced for that very difficult period of the recession, but we need to move forward. Specific incentives are something we have not projected yet, but at thi s stage the key is to make sure we have the technical capability in the UK.”

The minister outlined his plans for the UK car market on the sidelines of today's signing ceremony by Ford UK that finalised a GBP450m loan from the European Investment Bank (EIB) as well as British loan guarantees totalling GBP360m.

As well as examining the GBP5,000 grant, the minister indicated direct financial assistance to manufacturers was not likely to feature as part of the new political landscape.

However, Prisk insisted automotive-friendly measures such as reducing corporation tax from 28p to 24p – a measure he claimed would lead to the UK having one of the lowest rates in western countries by 2015 – as well as supporting Ford with loan guarantees and Nissan's Leaf EV project – were evidence the new government was pro industry.

The minister also conceded securing finance was becoming problematic for many companies and pledged to address the issue.

“We will put out a green paper on access to finance and I am aware that small and medium enterprises, as well as tier two and three suppliers are struggling with access,” he said.

Prisk stressed the importance of manufacturing after a previous emphasis on financial services and to that end, highlighted the government's decision to commit GBP150m to apprenticeships in the UK that could see around 50,000 positions created.

“We need to export more and that is why we are looking to move away from a sole reliance on financial services,” he said.

“The automotive sector is crucial – I am building up a rapport with the automotive heads of OEMs because I want them to know we are serious about the sector.”