Green Lobby Calls for Car Scrappage Scheme; SUSTAINABLE INDUSTRIES

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Byline: ANNA BLACKABY Sustainabie Industries Editor

Green groups and business experts have expressed disappointment that the government's car industry package did not include incentives to encourage people to trade polluting vehicles for more efficient models.

The announcement on Tuesday by Lord Mandelson of a pounds 2.3 billion loans package came with a proviso that carmakers must prove they are developing environmentally-friendly technology, a statement welcomed by environmental campaign groups such as West Midlands Friends of the Earth.

But there were calls for the government to go further by introducing a vehicle scrappage scheme - a financial incentive whereby car owners receive tax breaks or grants to swop older, more polluting vehicles for newer, more environmentally-friendly models.

West Midlands Friends of the Earth campaigner Chris Crean said: "We welcome the government's recognition that car manufacturers must be at the cutting edge of delivering a greener future, but ministers must do more to make the industry build smart cars that use less fuel and provide better incentives for motorists to choose them.

"Vehicle scrappage schemes - where motorists are given grants to swop gas guzzlers for fuel-efficient models - could be one way forward, and must be considered."

But he stressed that any scheme must be targeted in order to avoid a situation where more environmental damage is caused by scrapping serviceable vehicles in favour of newer cars.

"We're not advocating that people scrap a two-year old car for a new car. It needs to be targeted," he said.

Car industry experts have also spoken out in favour of vehicle scrappage policies.

David Bailey, professor of international business and economic policy at the Birmingham Business School and chairman of the regional studies association, said more needed to be done to stimulate demand for newer, more efficient cars.

He said: "Governments in France and Italy have introduced tax breaks for people who trade in older cars. …