Sean O'Grady: Where are the green incentives?

I wasn't shocked when the Government announced that it was scrapping any further grants to help people purchase green cars. It's now 15 months since the last Powershift grants were handed out and the scheme suspended. Few people will notice the passing of this small incentive (about £1,000) to lower carbon emissions, if only because so few people were aware of it in the first place.

Still, the news did come as a bit of a surprise, because the agency that dealt with it, the Energy Savings Trust, had always assured me that the Powershift grant was not so much dead as resting. I was assured that the only reason that grants were not being handed out was because of a wrangle between the British authorities and the European Union. Once a new, satisfactory and Euro-harmonious system of grants based on carbon dioxide emissions was devised, then all would be well again. It wouldn't be long, so I was told.

In fact, Brussels gave the go-ahead to the grant scheme only a month ago under its state-aid regime. So the European objections to the scheme have indeed been resolved. As they say on A Question of Sport: what happens next? The Government scraps the whole scheme.

I wonder, just wonder, whether HMG's leisurely talks with Brussels weren't just a window dressing, and that ministers had decided long ago to get rid of the grants altogether, even though they only cost £40m per annum. This impression of sneakiness is heightened because the minister concerned, Stephen Ladyman, released the news as a parliamentary written answer, a sure sign that a politician is ashamed of what they're doing and a traditional way of burying bad news.

As it happens, it seems that the Energy Savings Trust, which is partly funded by the Government, was also rather put out. It said in a statement: "We are disappointed... Whilst government has already taken some steps to address growing emissions, including recent changes to the vehicle excise duty system, less than one-tenth of 1 per cent of the cars sold in the UK are currently 'A' rated [as low-emission cars].

"Without an enhanced range of incentives, we will continue to see carbon dioxide emissions from road transport increase."

Quite brave, really, considering that it relies on the Treasury for some of its money. I couldn't have put it better myself. The abolition of the old Powershift scheme has already killed the market for LPG/dual-fuel conversions, just when it was beginning to look like a viable real-world option for many motorists. There now seems little financial encouragement for drivers to turn to other cleaner fuels, such as compressed natural gas or bioethanol. Much the same goes for people looking to buy hybrids such as the Toyota Prius and Honda Civic Hybrid, small diesels, electric cars or anything else that might help save the planet. Nor does the fuel-duty regime favour greener power sufficiently.

There are plenty of penalties to make us go green, but few incentives. Sometimes a little encouragement can help.

motoring@independent.co.uk